What are the advantages/disadvantages of not owning a credit card?

LivingAlmostLarge · #2 (**permalink**) 12-08-2006, 11:39 AM

advantage - owe no one nothing possible if you never overdraw the account

disadvantage - no rebates, no float period, no insurance online, hard to rent a car/hotel

sweeps · #3 (**permalink**) 12-08-2006, 11:42 AM

Advantages of Credit Cards
1. Safer than cash or debit cards
2. 30-day float
3. Rewards
4. Builds credit history
5. Source of emergency funds
6. Additional features: pricematch, rental insurance, etc.

Disadvantages of Credit Cards
1. Easily abused/Can incur fees and interest charges if not disciplined
2. Makes budgeting harder because you don't see the money leaving
3. Some cards come with annual fees

PRICEPLUS · #4 (**permalink**) 12-08-2006, 01:18 PM

Advantages- You can rent a hotel room or rent a car and you cannot without them in most instances!

Disadvantages- The moment you slip up the CC folks will nail you with fines and fees! They will try to get you to spend more than you should and then attempt to keep you an indentured servant of sorts until you pay them back!

markio26 · #5 (**permalink**) 12-08-2006, 01:45 PM

well said members... we need at least one....i like the discovered guys so far.....

creditcardfree · #6 (**permalink**) 12-08-2006, 02:34 PM

From past experience, one can rent a car with a debit card. My husband just did it last month. We have also paid for a hotel with our debit card. There has never been a problem.

Advantage of NOT owning a card...you won't spend more than you have and no bills to keep track of.

vishenda · #7 (**permalink**) 12-09-2006, 09:20 AM

Advantage? No debt!
Disadvantage? It's only your best friend until you cut it up.

PrincessPerky · #8 (**permalink**) 12-09-2006, 09:47 AM

I would think not having a card it would be hard for anyone to steal the numbers/card....

genmed · #9 (**permalink**) 12-09-2006, 03:34 PM

Advantages:
no debt from credit cards
Disadvantages:
Not having as much recourse if the merchant/contractor does not deliver on goods/services
Not having as much limited liability (if a credit card is stolen and you call it in, your liability if limited to $50 or $0 -- a debit card is $500 and a bit more of a hassler)

creditcardfree · #10 (**permalink**) 12-11-2006, 08:06 AM

Quote:

Originally Posted by genmed

a debit card is $500 and a bit more of a hassler)

My debit card with VISA has a zero liability. Don't know of an hassles as I've never had a problem using a debit card vs a credit card.

Ima saver · #11 (**permalink**) 12-11-2006, 08:08 AM

Clark Howard advises against debit cards. I use my credit card to earn cash back. I just pay it off each month, plus I usually do not carry it with me!

creditcardfree · #12 (**permalink**) 12-11-2006, 09:03 AM

Quote:

Originally Posted by Ima saver

Clark Howard advises against debit cards. I use my credit card to earn cash back. I just pay it off each month, plus I usually do not carry it with me!

Dave Ramsey advises against credit cards. It is really up to the individual. I have only been credit card free for about 10 months. I haven't racked up any debt in that time.

vsjhoc · #13 (**permalink**) 12-11-2006, 11:46 AM

You don't "own" a credit card. It owns you.

Elgin526 · #14 (**permalink**) 12-11-2006, 12:18 PM

While it isn't impossible to rent a car or hotel room without a credit card, it can be more difficult. Take my brother as an example, he hasn't had a CC for years, just a debit card with a Visa logo.

A few years ago he went to Vegas and rented a room. Not only did they put a hold on his debit card for the amount of his stay (room rate x number of nights + tax) but they also put on an additional $500 hold on his funds (in case he charged stuff to his room or damaged the room, I guess). This tied up all his funds he wanted to withdrawl for gambleing, shows, bar hoping, etc. I forgot how he resolved it, but he was not a happy camper.

Fast forward to just last week. I'm a travel agent, and booked my brother a car rental for when he comes to visit me next week for Christmas. He told me he doesn't have a CC (I'd forgoten that) so I called Hertz to find out if they take a debit card since not all car rental companies do. They said that they do, but the put a hold on funds in the account for the estimated amount of the rental plus $100 (not bad, really). The kicker is that they run a credit report on you, and if your score is too low they won't rent you the car, period. The guys at the car rental counter don't actually see your score, the computer runs the check and just says "yes" or "no" so they couldn't even tell me the minimum score required. My brother still has a crapy score from past mistakes so is unsure if they'll approve him or not. He now has a real credit card on the way, hopefully he'll get it in the mail before he leaves for the trip. He decided to just get one with a low limit, just for use when he travels since he's had so much trouble traveling with his debit card.

Anyway, my take is that CC's are great, IF used wisely and carefully. Always be aware, they will take advantage of you at every turn if you let them, and they can often be misleading and give confusing or conflicting information. I also feel that debit cards are a wonderful tool, but they do have their limitations. I think the average consumer should have both a credit card and a debit card, and use the one that makes the most sense for whatever purchase you are making.

LivingAlmostLarge · #15 (**permalink**) 12-11-2006, 12:23 PM

Quote:

Originally Posted by creditcardfree

Dave Ramsey advises against credit cards. It is really up to the individual. I have only been credit card free for about 10 months. I haven't racked up any debt in that time.

I've had CC for 10 months and haven't racked up debt either. And I've saved a nice penny in rewards and I've a nice amount in retirement (the max)...so moral of the story is...CC don't cause debt. People CAUSE DEBT!

smith · #16 (**permalink**) 12-11-2006, 07:01 PM

Hi to all,
thank you for all,a lot of information posted about credit.many thanks.

Budgeteer · #17 (**permalink**) 12-12-2006, 08:44 PM

The most important thing about a credit card is that it is NOT a vehicle to allow extra spending. A credit card is a tool that should be used:

- to pay for things that you have the cash for,
- to temporarily cover an emergency situation (again, you should have the money),
- to protect yourself (ie, instead of using a bank card
- to reap rewards (points, cash back, etc)
- to take advantage of insurance, etc
- to secure rentals, etc

If you never make the mistake of allowing your credit card to become a loan, you'll never have a problem with it.

PRICEPLUS · #18 (**permalink**) 12-12-2006, 08:51 PM

Well I guess you have ot have one in todays world or you'll have a few issues with car rental and hotel rooms. The bottom line is while they are bad they are a necessity at times it seems. I guess hte answer is to use it only when you have no choice!

vishenda · #19 (**permalink**) 12-13-2006, 12:46 PM

Advantages; No bills, no debts, YOU own what you have, no temptation to buy more then you can afford. If you can't afford it now what makes you think you can when the bill comes in.

Disadvantages: You have to save up to get what you want, takes time and patience.

disneysteve · #20 (**permalink**) 12-13-2006, 01:22 PM

Quote:

Originally Posted by vishenda

Advantages; No bills, no debts, YOU own what you have, no temptation to buy more then you can afford. If you can't afford it now what makes you think you can when the bill comes in.

Disadvantages: You have to save up to get what you want, takes time and patience.

I respectfully disagree. Just having a credit card doesn't automatically mean you are in debt, buying things you don't need and can't afford.

We save up for what we want and then buy it, using the credit card to pay for it and earn reward points, plus float the payment for an additional month, increasing interest earned on our money.

I think the disadvantage, if you want to call it that, to having a credit card is you need to have self-control and responsibility, and the reality is that not everyone does.