Do I NEED a credit card?

[thatthing]

I read online about how the common mistakes young people are making with their finances these days, and most of the articles talk about the "evil" of credit cards usage. It encourages over-spending of money they don't have, thus starting a gradually-increasing snowball of debt. Especially at such a young age.

This led me to think, do I really need a credit card? Reason being I am entering the workforce soon and will have a fixed income from now on. I want to save and make as little mistakes with my money as possible. Are there anyone of you out there, or people you know, that do not possess/apply for a credit card until they reach, say 25 or even 30 years old? Some discussion would be appreciated, thank you!

 

[newjersey]

a credit card gives u alot of freebies, like discounts or air miles.

just make sure u monitor your expenses and pay the bills in time, & you would be fine.

credit card companies don't earn alot from people who pay on time, they bank on people who are late and eventually, defaulters. I don't blame them as an instrument of evil, as the credit card rarely becomes alive to swap itself for a sale.

I personally know a couple of friends who use it for their KTV ( with hostess type ) stints and were close to bankruptcy from it.

Unless you are a business operator, don't go near one, cause you would be compelled to do a couple of heroic acts, like opening "bottles" than beers, tipping more than the usual rates, etc, which you would go home, hug your pillow and cry, why the f did u do that? ( mostly for the momentary euphoria of being the big spender and the glitter on the "mommy's eyes + hostesses' eyes" and the "I can't believe u did that" look from your friends'.

 

[saysuzu]

it all boils down to discipline in the end

i got credit card, and i pay my bills on time, never overspent at all. Somemore got savings

some people no credit card, still can overdraft

 

[jamomatt]

If you need to think then no, you do not need one. I cannot be bothered with freebies and all that crap. Credit cards make life easier... That is all. I don't like to carry thousands of dollars in my wallet.

 

[Darkzi0n]

Does a knife encourage u to kill a person?
Does a car encourage u to ram down a pedestrian?

Both knife and car are extremely useful, but dangerous under the wrong hand. This is the same for credit cards. It has nothing to do with the tool, it is the person who uses it.

 

[wts2013]

ya lor, it is how u use it, moi make it my asset, not liability lor, hahaha

we are now living in a different paradigm leh, with cc giving rebates/freebies, we can make it an asset leh, hahaha

 

[chuanz]

You don't NEED one, but it's practical and convenient to HAVE (at least) one.

I have credit cards, and get rebates and cash back off it. Why not?

The key is you need to budget your spending. I don't spend money that I do not have. Everything that I paid for with my CCs are already budgeted for before I even made the transaction, so that when it comes to the bill due date, there's no problem of paying it off.

As for personal budgeting software, I'm a YNAB fan (and I just started a couple of months back). It's really awesome and I feel really great knowing that I would not burst my bank, because everything is already budgeted for! But hey, specifics aside, a simple Googlesheet works just as fine!

 

[liburan_natal]

I had the same thought when I started working. In the end, I signed up during $80 credit promotion and I did not regret. My spending also does not increase unnecessarily after I own credit card.

It ultimately depends on your intention and your self control. As long as you keep the discipline as if you are owning a debit card (i.e only buy things which are within your means), credit card over few advantages:
1) Points/rebates/discounts/promotions
2) If you often buy things online, credit card is a "safer" option than debit card in case you encounter problems with your purchase
3) Convenience when making big purchase

My credit card actually helped me a lot for the deposit during my hospitalisation and my dad's hospitalisation as I can swipe up to my credit limit (I even asked for temporary credit limit raise) and "buy" me additional 1 month to "pay" the full hospitalisation bill. I put very low withdrawal limit for my debit card and it is definitely not enough to pay for hospital deposit. In emergency situations, you won't have the time to increase your withdrawal limit of your debit card.

On the negative side, you have to be very careful with the payment dates. If you miss out the payment date (even by 1 day), you will get $50 late payment fee. It almost happened to me 1 time and since then I pay my credit card bills 1 week before due date instead of a few days before.

 

[hogrider88]

I didnt apply a cc until 7 yrs into the workforce.

On one hand, i regretted didnt make use of the freebies n rebates etc, i could hv saved alot even on my wedding bands etc.

On the other hand, i am thankful that i hv gotten used to a using-only-what-i-have lifestyle. Even after hving multiple cc now, i still do nt overspend wat i shd.

Biggest mistakes commonly seen r people spending with their cc nw and wait their salary to pay the bills, or even paying the minimum amount.. This way u r nt going to save any money, let alone investing.

hving cc is nt abt u will hv fix income soon, but rather nextime u shd observe wad r ur fix expenses instead, then workout which card is best suits u.

 

[dork32]

as long as you do not feel that things bought by credit cards are free, it is ok to use credit cards.

 

[dowzkeh]

Actually i need my credit card...

1. i need it to get cash back from my purchases (extra income from necessary groceries)
2. i need it to get bonus interest from UOB 1 account
3. i need it to bump up my average daily balance to get interest income on those.

 

[zoossh]

My advice is start off with simple and very few cards then get to know how to use them. Some overseas stuff only accept cc.

 

[mummy1234]

I read online about how the common mistakes young people are making with their finances these days, and most of the articles talk about the "evil" of credit cards usage. It encourages over-spending of money they don't have, thus starting a gradually-increasing snowball of debt. Especially at such a young age.

This led me to think, do I really need a credit card? Reason being I am entering the workforce soon and will have a fixed income from now on. I want to save and make as little mistakes with my money as possible. Are there anyone of you out there, or people you know, that do not possess/apply for a credit card until they reach, say 25 or even 30 years old? Some discussion would be appreciated, thank you!

My older sister who is very prudent about her money, did not apply for one until her late 30s I think, and even then, she seldom use it. CC does make one spend more easily so you need to have good discipline if you own one.

 

[SCG8866T]

All the cliche sayings about only using cash is a lie. I try to completely avoid using cash and debit card and only use three cash back credit cards all full payment giroed on due date.

I get on average 13% rebate on everything i spend. You can read a post i wrote about this few months back: http://scg8866tstockinvesting.blogs...t-cards-spending-and-saving.html#.VdmfnGIaySM

 

[henrylbh]

I need credit card to save on expenses, not spend. I have 2 cc of which 1 is almost never used.

 

[zoossh]

All the cliche sayings about only using cash is a lie. I try to completely avoid using cash and debit card and only use three cash back credit cards all full payment giroed on due date.

I get on average 13% rebate on everything i spend. You can read a post i wrote about this few months back: http://scg8866tstockinvesting.blogs...t-cards-spending-and-saving.html#.VdmfnGIaySM

There's one part that may be misleading.

Did u count the uob one interest all into your 13% rebate? The money deposited in other banks can earn variable percentages, say for example up to 1.40% for scb esaver. So the cc spending allows u to earn 2.43-1.40 on 50k, not 2.43.

 

[Genesisz]

I agree with most who commented on the prudent use of credit cards.

For me, I only have one ATM card (to withdraw my money or cash dollar note), one credit card of a local bank and one credit card of an international bank.

I seldom use my credit cards other than for specific and limited purposes like pumping petrol for my car or business trips (unless I am issued with corporate credit card).

I made it a point to pay all my credit card bills on time on a regular basis.

I got my first credit card after being in the workforce for more than 10 years and that was a supplementary card from my parents.

 

[Zaalaa]

i do realised i spend more easily when i have my cc, and then i look at my spending, sometimes will shock.

then again, money earn is to spend one lo. keep in bank and in account got simi use?

but i started using only after i have almost all the essentials fully paid. car, house, no loans, no liability left.

 

[bigpelican]

as long as you pay your full outstanding amount every month, it should be okay.
credit card statement is also good for keeping track of your expenses and maybe as a "diary".

many times i forgot where i went to a month ago on specific weekend, i check my credit card statement for any purchase or dining on that day, then i remember where/what i do on that day

 

[wts2013]

All the cliche sayings about only using cash is a lie. I try to completely avoid using cash and debit card and only use three cash back credit cards all full payment giroed on due date.

I get on average 13% rebate on everything i spend. You can read a post i wrote about this few months back: http://scg8866tstockinvesting.blogs...t-cards-spending-and-saving.html#.VdmfnGIaySM

hahaha, chiu have problem understanding financial accounting or managing your finances, how can u count interest earned on your savings account as rebates for your cc spend? U mean your 50k uob1 account is given to the bank for free, u dun earn 2.43% on the money, u mean the 2.43% is rebate for your $500 cc spend, mai pian kaki mai pian lang lah, hahaha