The pros and cons of cutting up the credit cards...

[myoung]

Whether to have a credit or debit card or both is for many people a matter of convenience. The fees charged are the costs of having that convenience available and are no different in concept to any other cost for service that would be implicit or explicit in the purchase price of any good or service.

As is often the case, it pays to shop around to get the deal that best suits your needs. For example, neither our bank nor our credit card company charge annual fees for the debit or credit cards. The debit card purchases are deducted immediately from our checking account, so there are no interest charges applicable. We generally pay off the credit card bill in full, so there are no interest charges there either.

Having and using credit or debit cards prudently can and does contribute to your credit score that can reap benefits that far outweigh the cost of owning one of these pieces of plastic. Banks and other lenders will adjust terms and conditions of loans based on your credit score and this can add up to hundreds or even thousands of dollars over the term of loans for high-ticket purchases.

That's my two cents, in credit not cash.

[planovet]

Whether to have a credit or debit card or both is for many people a matter of convenience. The fees charged are the costs of having that convenience available and are no different in concept to any other cost for service that would be implicit or explicit in the purchase price of any good or service.

As is often the case, it pays to shop around to get the deal that best suits your needs. For example, neither our bank nor our credit card company charge annual fees for the debit or credit cards. The debit card purchases are deducted immediately from our checking account, so there are no interest charges applicable. We generally pay off the credit card bill in full, so there are no interest charges there either.

Having and using credit or debit cards prudently can and does contribute to your credit score that can reap benefits that far outweigh the cost of owning one of these pieces of plastic. Banks and other lenders will adjust terms and conditions of loans based on your credit score and this can add up to hundreds or even thousands of dollars over the term of loans for high-ticket purchases.

That's my two cents, in credit not cash.

I could not have said it better myself.

Cindi and I each have several credit cards, personal and business. We pay them off each month and avoid any interest fees. I've racked up over 100,000 frequent flier miles on my AMX Corporate card alone this year. Both our crdit scores are in the 800s and we just refinanced our house for a really low rate with no fees because of our credit scores.

While Dave Ramsey's cash only way is a good way to go, it leaves you with no credit score and that can hurt you down the line. If you are responsible and prudent with your credit purchases and pay them off each month, I really don't see the problem with credit. But I can see the temptation to abuse them if you were unemployed or low on cash. In that case cash only would be a better option.

That MY $.02.

[caseydog]

Paying your bills on time is not enough to keep your credit good.

Here is a story I have told a hundred times, and it still blows my mind.

About three months into my cancer treatments, I got a phone call from MBNA, which is now Bank of America. The woman on the phone said that they noticed that I suddenly had a lot of what appeared to be medically related charges on my account. "Is everything okay?"

Well, I told her the truth, that I was going through cancer treatment, but it was caught early, and treatment is going very well. She then asked if she could put me on hold.

When she cam back, she informed me that my credit limit had been reduced to $500 over my current balance -- a reduction of about $15,000. My interest rate was also increased from 8.9 percent to 19.99 percent.

WTF?

Within a month, Chase raised my interest rate to the same 19.99 percent, even though I had NEVER been late on a payment -- ever.

WTF again?

Over the next few years, I watched my credit score drop, even though I was paying my bills on time.

I later moved all of my medical debt to a Chase account offer of 4.99 percent for the life of the loan. Cool, 4.99 percent fixed.

After we taxpayers bailed them out, Chase decided they weren't making enough money at 4.99 percent, so they accelerated the payoff schedule. Suddenly, I was looking at about a thousand a month going to that loan -- about double my mortgage payment.

I called Chase, and we negotiated a deal at 6.9 percent with payments I could handle. Chase then proceeded to trash my credit rating. I can still feel the cold steel blade in my back from that one.

So, for almost four years, I did "the right thing." I paid my bills on time, even when money was tight. And, in return, the banks just kept coming up with new ways to screw me.

As much as I miss the convenience of a credit card, I do not miss doing business with the banks that issue them.

[planovet]

That sucks Dog.

I've been screwed by Chase before too and refuse to do business with them again. We moved our checking and savings to Wells Fargo and stopped using any Chase credit cards. They suck!

[hotrod]

We gave up credit cards well over 5 years ago. If I cannot get it without credit, I either repair the one I have, build one myself, or do without. It gets easier every day to live without most of what many people use as justification that we all need to have credit cards. I never want another credit card, cell phone or heart attack, all three are evil.

I havent had a heart attack yet but no cards, no cell phone... no need, if its that important they can call on the landline or email me..or better yet, come over and visit!

[hotrod]

That sucks Dog.

I've been screwed by Chase before too and refuse to do business with them again. We moved our checking and savings to Wells Fargo and stopped using any Chase credit cards. They suck!

wells fargo are predators flat out... I wont bank there (wifeys a teller in another institution) but I have watched them screw over other people in my life... like "automatic transfers to checking" where they put $300 into your checking account without asking then charge you %25... F that......

[Sonetpro]

I don't deal with the Brand name banks. I bank with a regional bank . CC's and car loans are with a credit union. Much better rates and customer service.
The only Brand name card I have is AMEX. But I pay all of them off every month so no charges.