The Worst Kind of Debt - good article

[disneysteve]

Very good article talking about how more and more people are racking up "survival debt" by charging necessities like groceries and rent to their credit cards.

http://articles.moneycentral.msn.com...Groceries.aspx

[Broken Arrow]

Wow, that is a frightening prospect.

It certainly punctuates the value of having an emergency fund.

Although I charge any and all of my living expenses on my credit card, that balance is always checked against the earmarked funds I have available in my checking. The software that I use can be set up to calculate that automatically for me. I never charge more than what I have in the bank, and I always pay the balance off in full at the end of every pay period.

[Aleta]

I do the same. I pay my balance off at the end of the month also. I have an account sheet for each of my categories, so I know how much I can spend. I wonder if they are really accurate in what they are reporting?

[smartatmoney]

This is troubling. This needs to stop! People need to have a better game plan. An emergency fund is more important than ever. The credit card companies don't care either. They should note this sort of behavior (it should be easy to spot) and provide some help. Maybe send the customer a dvd with some financial info like budgeting etc.

I know this will never happen, but one can dream that they would be more responsible.

[PRICEPLUS]

Live below your means even if it hurts a bit. Cash and Carry should be your Modus Operandi!

While many are responsible it is a very simple thing to find yourself in debt. Paying groceries on a card is something I refuse to do. Amex at McDonalds" The world is losing it.

Fight back! Use cash as much as you can! :

[disneysteve]

Originally Posted by PRICEPLUS

Paying groceries on a card is something I refuse to do. Amex at McDonalds" The world is losing it.

Fight back! Use cash as much as you can! :

I'm all in favor of using a good rewards card as long as you pay the bill in full each month. Yes, we charge our groceries, and most of our other bills too. And we racked up close to $600 in rewards last year. Nothing wrong with that. And yes, I've even charged fast food. I get double Marriott points in restaurants.

[PRICEPLUS]

Steve, you are one of the many who has no trouble handling cards and uses them to his advantage. There is absolutely nothing wrong with that. There are folks less responsible than yourself who end up in precarious situations. There are folks who through financial disasters like losing a job or a medical problem end up using a CC because there was no EF or savings to fall back on.

This site is replete with horror stories concerning CCs. It is my personal opinion that it is best for most folks to pay cash instead of using credit. My opinion in no way reflects on your choice and that of many others here to use CCs to their advantage.

In the end it all boils down to personal choice!

[Budgeteer]

We also charge everything we buy. Groceries, McDonalds, going to movies, etc. In fact, I get mad if I can't charge something. But we pay it every month. We get great rewards, plus all of my expenses are on my card and can be downloaded directly into my budgeting software. It takes so much of the hassle out.

I can't imagine charging these things with the intent of letting them float and accrue interest.

[LivingAlmostLarge]

I sometimes feel weird when DH pulls out the CC to charge something like a $1. I also think he should just pay cash. Since moving back east, it's weird where we live is so cash based. I hate it, it always slips out of my hands.

[puck36]

I don't use credit cards I just use my check card for everything.

[poundwise]

I find that most people who turn to credit cards as a emergency source of funds; saying "I had to..." actually did 'have to' but only because they had not managed their money properly beforehand.

Yes, if you do not save any money and etc. you will very likely end up in a situation where you need something (even genuinely) and have no good way to get it other than borrowing money one way or another; often, a poor choice ensues.

[dvcgirl]

Nice article Steve. I can see this becoming an increasing problem, especially with new college grads just starting out. I personally use my CC for everything, and then pay the balance in full each month. I see an awful lot of people out there doing the very same thing, and I always wonder how many of those people are carrying balances.

[vishenda]

good resource--thanks-

[boefixepa]

Loved the article. It's points to a real problem and I can say before I turned things around I was one of them. Now I am doing the disneysteve and others way and it's so nice. It makes no difference if I use my bank card or my CC it all has to do with the $$ in the envelope! AKA a BUDGET! I will gladly take the rewards for my efforts thankyou....Why not it will takes YEARS for me to break even on what I paid out in interest before I woke UP!!

[frugalmomof1]

Good article. I wonder how many people charge their living expenses for the rewards and pay off their balance each month, like many people on this site do.

[ren]

I've done it -- the best job I could get was 30 hours a week at minimum wage and Dad was out of work. He raided his IRA to cover the mortgage and we both ran up a lot of debt to keep the lights on and food on the table. It's not an easy life.