Do You Really Need a Credit Card?

Today is a guest post from personal finance writer, Alban.  He offers tips on how to use credit cards effectively and helps people to compare the best credit cards online.

Having a credit card is something that many people simply take for granted as a necessity.  However, a credit card can in reality cost you more than the convenience could ever be worth when you consider the interest charges, annual fees and transactions costs associated with owning and using a credit card. If you’re still not convinced, consider the benefits and drawbacks of owning a credit card, and consider the alternatives to this most expensive of all ‘must-haves’.  Refer to this site for rate comparisons and terms among popular credit card providers.

The Good Things

There is little doubt amongst credit card users that their cards are a useful item to keep in their wallets. A credit card can get you out of an expensive dinner or allow you snap up that online bargain. Are you benefiting from using your credit card:

  • For an emergency purchase. A credit card can be a lifesaver if you receive an unexpectedly high bill, or your car breaks down and needs expensive repairs. You can even use your credit card in an emergency situation in a restaurant with friends if it comes time to split the bill and you’ve only budgeted for the one glass of wine, not a share of the three bottles for the table.
  • Online or over the phone. You can use a credit card to make online purchases in internet auctions, online stores or with businesses which have real life shop fronts but offer discounts for online purchases. Similarly you can use your credit card over the phone if you are having a purchase shipped from out of town. Plus, you can also make phone and internet bill payments which save you time waiting in line at the post office to pay your bill in person – instead you can deal with an automated system over lunch and pay just about any bill with credit.
  • For secure purchases and purchase insurance. Many credit card issuers will offer you an extended warranty or purchase insurance if you use your credit card to make the sale. This often allows you to recoup the cost of a purchase if your item is stolen, lost or damaged, and if you are making purchases online or overseas, you can often benefit from purchase insurance if the product is not what you expected or what was promised when it arrives.

The Bad Things

Accruing interest is not the only thing you have to worry about when you use a credit card. A credit card requires constant vigilance whenever you make a purchase to ensure you remain in control of your debt. Disadvantages of having a credit card include:

  • High fees and exception fees. Credit cards can charge you an annual fee from as little as $50 a year to as much as $400 a year simply to allow you to have the card as that doesn’t include any usage fees. Exception fees are the ones which you can avoid if you stay within your credit limit and pay your monthly bills on time, but which skyrocket when you are the exception to the credit card rules.
  • High interest rates. Most credit cards will offer interest free days and low interest introductory periods, however at the end of a promotional period, and if you don’t pay your balance back to zero you will forfeit those interest free days and all your purchases will be charged interest. As a result you will be paying for the same purchases again and again in interest charges which can be as much as 20% and even higher if you make a cash advance from your credit card.
  • You must always remain in control and informed. As soon as your credit card purchases get out of control or you approach your credit limit you are at risk of high fees and high interest. If you have a credit card you continually have to remain aware of your balance and count your purchases to make sure you are not getting into debt you can’t afford.

So, Do You Really Need A Credit Card?

Remembering the drawbacks of using a credit card, do you need to use credit for:

  • Emergencies? No. To cover your emergency expenses, a much more financially sound option is to have a dedicated emergency fund. It is easy to start an emergency fund by opening an online savings account and starting an automatic payment from your wages each week. This payment can be as little as $10 a week and this can quickly add up to a healthy emergency fund. Then, if the car breaks down or you get a large power bill after a hot summer you can access your own funds to pay for the emergency, rather than getting into credit card debt, which can create an emergency all of its own.
  • Online or phone purchases? No. A debit card looks and acts like a credit card in that you can make purchases online or over the phone by entering your card numbers. However, a debit card access your own funds, from a linked transaction account so rather than accruing a balance which will be charged interest, you are spending your own money and when your account is empty, you have to stop spending.
  • Secure purchases and purchase insurance? No. You can get these same benefits from a debit card too as debit cards are issued by both Visa and MasterCard, through your existing financial institution. Therefore, you have the same security features you would with a credit card to protect your card details when buying online or over the phone, plus you also often have purchase protection included as issued by Visa or MasterCard on their regular credit cards.

If you think there are no alternatives to using credit, think again. it is easier than you think to be financially responsible, spend your own money on day to day and emergency purchases, and break free from the hold of credit card debt.

25 Responses to Do You Really Need a Credit Card?
  1. Keith @ LifeTuner
    April 7, 2010 | 1:59 pm

    Thanks, Alban! This is a great post. We’re running an educational campaign about credit cards over at LifeTuner. I’ve added this post in our relevant links section. http://www.lifetuner.org/dont-get-swiped/links

  2. paranoidasteroid
    April 8, 2010 | 6:55 pm

    There’s one more feature of credit cards that I think makes them better than debit cards: if you dispute those charges, you don’t have to pay them. Therefore, credit card companies are much more willing to work with you.

    That said, no, no one needs a credit card. But it’s not a horrible tool for people who can use them responsibly.

  3. clayton
    April 12, 2010 | 6:19 am

    Learning to use your credit responsibly really is important. Thanks for a great article.

  4. Brandon Schmid
    April 17, 2010 | 2:21 pm

    My first credit card was obtained for one purpose….to build credit. That’s it!

    I was in college and all I did was buy gas once a week on the credit card. It was great to start to build up credit this way.

    Now all I use a credit card for is conveience…I put like $2, 000 a month on it and pay off all of it. In fact, in 10 years I have never paid out interest :) The best part is that the CC company has a reward program so last year I got like $280 back. Talk about sweet! Thanks Visa!

    Cheers!

  5. Ohio Bankruptcy
    July 30, 2010 | 2:53 am

    There may be many people who suggest that you get a credit card, but before you do you should carefully decide whether or not you really need a credit card.

  6. Call Free
    October 8, 2010 | 10:57 am

    In my opinion beside credit cards the prepaid credit cards which are easily available through banks are most reliable.

  7. martin slattery
    February 6, 2011 | 7:27 pm

    the most important thing is to read the small print when signing up, there are always things in there that will trip you up as they are expecting you not to read it. One example is on balance transfers, they offer you a great 0% rate but dont warn you about the fact is you make a purchase on the card then you will have to pay off the lowest interest first,, ie,, the balance transfer!! so you have the hight interest of the purchase stuck there until u clear the balance tranfer!! sneaky hey!!! well thats what you are dealing with , the banks are at the end of the day a business trying to make money, beat them at there own game!!! check out some more credit card tips at
    My Blogg

  8. Foiqxptc
    May 6, 2012 | 2:01 am

    I work with computers http://menosisoohu.de.tl russian preteen stripping Is there anyone hotter than this chic? i mean come on now! She’d be a perfect ten if she took it in the dumper!

  9. Ffbbxqun
    May 6, 2012 | 4:42 am

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  10. xdddCBillyjoeTopanga
    May 21, 2012 | 5:22 am

    Truly helpful thought for me . Will you publish some far more ? coz i would like to stick to ur twitter or facebook
    véhicule récréatif à vendre

  11. Bruce
    December 5, 2012 | 11:40 am

    Good article! However, having been given the advice to get a card right out of school, I found it very easy to build up debt and a long process to become debt free once more. The author lists paying for an expensive dinner as one reason to keep a card but I think a better way to go about this one is to ask yourself why you would go out to an expensive dinner if you couldn’t afford to pay cash. If you apply that same logic to other purchases then perhaps you are ready for a credit card. We all want to live beyond those means we can accumulate but in the end, having debt will be far worse than doing without. My main advice is to get far enough in life and career so that you know the rhythm of your financial obligations before you consider getting a credit card.

  12. Penni
    June 11, 2013 | 9:32 pm

    Hi, I do believe this is an excellent web site. I stumbledupon
    it 😉 I will revisit once again since i have bookmarked it.
    Money and freedom is the greatest way to change, may you be
    rich and continue to guide other people.

  13. e-cigaret væske
    June 27, 2013 | 12:44 am

    magnificent issues altogether, you just gained a brand new reader.
    What could you recommend about your submit that you just made
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  14. Поиск любовницы
    August 7, 2013 | 6:21 pm

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  15. Знакомства Нижнекамск
    August 13, 2013 | 2:47 am

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  16. Знакомства Батайск
    August 23, 2013 | 12:07 am

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  17. scoprire anonimo su ask
    June 4, 2014 | 9:07 pm

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  18. Hello, I want to subscribe foor this blog tto obtain most recent updates, therefore where
    can i do it please help.

  19. Blues and Twos
    September 4, 2014 | 12:25 pm

    Hello sir,
    Thank you for your nice posting. it is very interesting and informative posting.A debit card looks and acts like a credit card in that you can make purchases online or over the phone by entering your card numbers.
    thanks……..

  20. Edison
    October 10, 2014 | 9:45 am

    Hi colleagues, its fantastic piece of writing regarding
    cultureand entirely defined, keep it up all the time.

  21. Megan
    February 11, 2016 | 2:55 pm

    Looking for a job buy mojohard pills Keith Skeoch, CEO of Standard Life Investments, says: “A worldwide partnership with The Ryder Cup complements our reputation as a leading global asset manager with strong performance and a distinctive team culture.

  22. hey
    February 21, 2016 | 12:16 pm

    May I simply say what a relief to find someone who genuinely understands what they’re talking about online. You certainly realize how to bring an issue to light and make it important. A lot more people really need to check this out and understand this side of your story. I can’t believe you aren’t more popular given that you definitely possess the gift.|

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  1. 9 Things to Know about Credit Cards | Fill Your Money Box
  2. Delwell.com
  3. deathly hallows necklaces
Leave a Reply


Wanting to leave an <em>phasis on your comment?

Trackback URL http://mynextbuck.com/do-you-really-need-a-credit-card/trackback/

Do You Really Need a Credit Card?

Today is a guest post from personal finance writer, Alban.  He offers tips on how to use credit cards effectively and helps people to compare the best credit cards online.

Having a credit card is something that many people simply take for granted as a necessity.  However, a credit card can in reality cost you more than the convenience could ever be worth when you consider the interest charges, annual fees and transactions costs associated with owning and using a credit card. If you’re still not convinced, consider the benefits and drawbacks of owning a credit card, and consider the alternatives to this most expensive of all ‘must-haves’.  Refer to this site for rate comparisons and terms among popular credit card providers.

The Good Things

There is little doubt amongst credit card users that their cards are a useful item to keep in their wallets. A credit card can get you out of an expensive dinner or allow you snap up that online bargain. Are you benefiting from using your credit card:

  • For an emergency purchase. A credit card can be a lifesaver if you receive an unexpectedly high bill, or your car breaks down and needs expensive repairs. You can even use your credit card in an emergency situation in a restaurant with friends if it comes time to split the bill and you’ve only budgeted for the one glass of wine, not a share of the three bottles for the table.
  • Online or over the phone. You can use a credit card to make online purchases in internet auctions, online stores or with businesses which have real life shop fronts but offer discounts for online purchases. Similarly you can use your credit card over the phone if you are having a purchase shipped from out of town. Plus, you can also make phone and internet bill payments which save you time waiting in line at the post office to pay your bill in person – instead you can deal with an automated system over lunch and pay just about any bill with credit.
  • For secure purchases and purchase insurance. Many credit card issuers will offer you an extended warranty or purchase insurance if you use your credit card to make the sale. This often allows you to recoup the cost of a purchase if your item is stolen, lost or damaged, and if you are making purchases online or overseas, you can often benefit from purchase insurance if the product is not what you expected or what was promised when it arrives.

The Bad Things

Accruing interest is not the only thing you have to worry about when you use a credit card. A credit card requires constant vigilance whenever you make a purchase to ensure you remain in control of your debt. Disadvantages of having a credit card include:

  • High fees and exception fees. Credit cards can charge you an annual fee from as little as $50 a year to as much as $400 a year simply to allow you to have the card as that doesn’t include any usage fees. Exception fees are the ones which you can avoid if you stay within your credit limit and pay your monthly bills on time, but which skyrocket when you are the exception to the credit card rules.
  • High interest rates. Most credit cards will offer interest free days and low interest introductory periods, however at the end of a promotional period, and if you don’t pay your balance back to zero you will forfeit those interest free days and all your purchases will be charged interest. As a result you will be paying for the same purchases again and again in interest charges which can be as much as 20% and even higher if you make a cash advance from your credit card.
  • You must always remain in control and informed. As soon as your credit card purchases get out of control or you approach your credit limit you are at risk of high fees and high interest. If you have a credit card you continually have to remain aware of your balance and count your purchases to make sure you are not getting into debt you can’t afford.

So, Do You Really Need A Credit Card?

Remembering the drawbacks of using a credit card, do you need to use credit for:

  • Emergencies? No. To cover your emergency expenses, a much more financially sound option is to have a dedicated emergency fund. It is easy to start an emergency fund by opening an online savings account and starting an automatic payment from your wages each week. This payment can be as little as $10 a week and this can quickly add up to a healthy emergency fund. Then, if the car breaks down or you get a large power bill after a hot summer you can access your own funds to pay for the emergency, rather than getting into credit card debt, which can create an emergency all of its own.
  • Online or phone purchases? No. A debit card looks and acts like a credit card in that you can make purchases online or over the phone by entering your card numbers. However, a debit card access your own funds, from a linked transaction account so rather than accruing a balance which will be charged interest, you are spending your own money and when your account is empty, you have to stop spending.
  • Secure purchases and purchase insurance? No. You can get these same benefits from a debit card too as debit cards are issued by both Visa and MasterCard, through your existing financial institution. Therefore, you have the same security features you would with a credit card to protect your card details when buying online or over the phone, plus you also often have purchase protection included as issued by Visa or MasterCard on their regular credit cards.

If you think there are no alternatives to using credit, think again. it is easier than you think to be financially responsible, spend your own money on day to day and emergency purchases, and break free from the hold of credit card debt.

25 Responses to Do You Really Need a Credit Card?
  1. Keith @ LifeTuner
    April 7, 2010 | 1:59 pm

    Thanks, Alban! This is a great post. We’re running an educational campaign about credit cards over at LifeTuner. I’ve added this post in our relevant links section. http://www.lifetuner.org/dont-get-swiped/links

  2. paranoidasteroid
    April 8, 2010 | 6:55 pm

    There’s one more feature of credit cards that I think makes them better than debit cards: if you dispute those charges, you don’t have to pay them. Therefore, credit card companies are much more willing to work with you.

    That said, no, no one needs a credit card. But it’s not a horrible tool for people who can use them responsibly.

  3. clayton
    April 12, 2010 | 6:19 am

    Learning to use your credit responsibly really is important. Thanks for a great article.

  4. Brandon Schmid
    April 17, 2010 | 2:21 pm

    My first credit card was obtained for one purpose….to build credit. That’s it!

    I was in college and all I did was buy gas once a week on the credit card. It was great to start to build up credit this way.

    Now all I use a credit card for is conveience…I put like $2, 000 a month on it and pay off all of it. In fact, in 10 years I have never paid out interest :) The best part is that the CC company has a reward program so last year I got like $280 back. Talk about sweet! Thanks Visa!

    Cheers!

  5. Ohio Bankruptcy
    July 30, 2010 | 2:53 am

    There may be many people who suggest that you get a credit card, but before you do you should carefully decide whether or not you really need a credit card.

  6. Call Free
    October 8, 2010 | 10:57 am

    In my opinion beside credit cards the prepaid credit cards which are easily available through banks are most reliable.

  7. martin slattery
    February 6, 2011 | 7:27 pm

    the most important thing is to read the small print when signing up, there are always things in there that will trip you up as they are expecting you not to read it. One example is on balance transfers, they offer you a great 0% rate but dont warn you about the fact is you make a purchase on the card then you will have to pay off the lowest interest first,, ie,, the balance transfer!! so you have the hight interest of the purchase stuck there until u clear the balance tranfer!! sneaky hey!!! well thats what you are dealing with , the banks are at the end of the day a business trying to make money, beat them at there own game!!! check out some more credit card tips at
    My Blogg

  8. Foiqxptc
    May 6, 2012 | 2:01 am

    I work with computers http://menosisoohu.de.tl russian preteen stripping Is there anyone hotter than this chic? i mean come on now! She’d be a perfect ten if she took it in the dumper!

  9. Ffbbxqun
    May 6, 2012 | 4:42 am

    Wonderfull great site http://udyfopurykuf.de.tl preteen nude magazines well i think we all agree if i say, he is hot asswel, to bad he left his shirt on

  10. xdddCBillyjoeTopanga
    May 21, 2012 | 5:22 am

    Truly helpful thought for me . Will you publish some far more ? coz i would like to stick to ur twitter or facebook
    véhicule récréatif à vendre

  11. Bruce
    December 5, 2012 | 11:40 am

    Good article! However, having been given the advice to get a card right out of school, I found it very easy to build up debt and a long process to become debt free once more. The author lists paying for an expensive dinner as one reason to keep a card but I think a better way to go about this one is to ask yourself why you would go out to an expensive dinner if you couldn’t afford to pay cash. If you apply that same logic to other purchases then perhaps you are ready for a credit card. We all want to live beyond those means we can accumulate but in the end, having debt will be far worse than doing without. My main advice is to get far enough in life and career so that you know the rhythm of your financial obligations before you consider getting a credit card.

  12. Penni
    June 11, 2013 | 9:32 pm

    Hi, I do believe this is an excellent web site. I stumbledupon
    it 😉 I will revisit once again since i have bookmarked it.
    Money and freedom is the greatest way to change, may you be
    rich and continue to guide other people.

  13. e-cigaret væske
    June 27, 2013 | 12:44 am

    magnificent issues altogether, you just gained a brand new reader.
    What could you recommend about your submit that you just made
    some days ago? Any positive?

  14. Поиск любовницы
    August 7, 2013 | 6:21 pm

    Excellent post however I was wondering if you could write a litte
    more on this topic? I’d be very grateful if you could elaborate a little bit more. Cheers!

  15. Знакомства Нижнекамск
    August 13, 2013 | 2:47 am

    Hello! This is my first visit to your blog! We are
    a group of volunteers and starting a new initiative in
    a community in the same niche. Your blog provided us useful information to
    work on. You have done a extraordinary job!

  16. Знакомства Батайск
    August 23, 2013 | 12:07 am

    Howdy are using WordPress for your blog platform?
    I’m new to the blog world but I’m trying to
    get started and set up my own. Do you need any coding knowledge to make your own blog?
    Any help would be greatly appreciated!

  17. scoprire anonimo su ask
    June 4, 2014 | 9:07 pm

    Spot on with this write-up, I honestly believe that this amazing site needs far more attention. I’ll probably be returning to see more, thanks for the information!

  18. Hello, I want to subscribe foor this blog tto obtain most recent updates, therefore where
    can i do it please help.

  19. Blues and Twos
    September 4, 2014 | 12:25 pm

    Hello sir,
    Thank you for your nice posting. it is very interesting and informative posting.A debit card looks and acts like a credit card in that you can make purchases online or over the phone by entering your card numbers.
    thanks……..

  20. Edison
    October 10, 2014 | 9:45 am

    Hi colleagues, its fantastic piece of writing regarding
    cultureand entirely defined, keep it up all the time.

  21. Megan
    February 11, 2016 | 2:55 pm

    Looking for a job buy mojohard pills Keith Skeoch, CEO of Standard Life Investments, says: “A worldwide partnership with The Ryder Cup complements our reputation as a leading global asset manager with strong performance and a distinctive team culture.

  22. hey
    February 21, 2016 | 12:16 pm

    May I simply say what a relief to find someone who genuinely understands what they’re talking about online. You certainly realize how to bring an issue to light and make it important. A lot more people really need to check this out and understand this side of your story. I can’t believe you aren’t more popular given that you definitely possess the gift.|

Trackbacks/Pingbacks
  1. 9 Things to Know about Credit Cards | Fill Your Money Box
  2. Delwell.com
  3. deathly hallows necklaces
Leave a Reply


Wanting to leave an <em>phasis on your comment?

Trackback URL http://mynextbuck.com/do-you-really-need-a-credit-card/trackback/