Putting exactly the same spend on a credit card rather than a debit one does not conflict with living within your means. Making use of credit facilities does not mean being in debt or doing anything wrong.
It's the same in the UK - there's a world of benefit in showing that you're able to use credit products responsibly and there is no risk or any cost if you just treat a credit card like it's a debit card.
There is a risk that you can't pay the bill. Losing your job may still mean you can at least pay the minimum but it can sometimes be the start of a slippery slope.
Anyone who says 'it can't happen to me' either has very rich parents or is a fool.
Responsibly using CC isn't about "relying on future income to pay off present debt". If you have 5k in the bank, don't spend more than that, and pay it off at the end of the month (or if you're paranoid like I was right out of school, pay it off every week)
If you can't trust yourself, sure. But most people do have the ability to simply not spend more than they have in their bank account and then pay off in full even before they receive a statement. Even if you lost your job, you'd still be fine.
Most people don't use credit cards to borrow. The point of the credit is just to hold until the end of the next month and then pay off in one go. The point of doing that is to allow a period of time to resolve any disputes for example.
Credit cards give you extra consumer power - actual extra laws backing you up (at least where I am).
I can't understand people who don't like credit cards if they say it's not living within your means.
With a credit card, you've introduced a new failure mode where you can end up in debt. If you do it right, you won't, but the cc companies know that a lot of people will mess it up--that's their business model.
It's a bit like with alcohol. If you never drink, you can be 100% confident you'll never become an alcoholic. If you do drink, even a little bit, that chance goes up. Plenty of people are able to drink responsibly, sure, but I can understand wanting to avoid the possibility entirely.
Say you're self-employed and your best client suddenly stops paying. They have a good track record and assure you it's just a technical blip or something. You have bills to pay so request an increase in credit limit. Then your client's blip turns into something much worse, and on it goes...
That's how people become unstuck. Very few people start off with bad intentions.
Because a lot of people don't seem to follow that. You get paid X on the 1st, as long as you spend X-1 within the month you have no need for a credit card.
Other than showing some opaque credit agency that your ok for more credit.
What about the consumer protection aspects? You don't get that with a debit card. I suppose you don't need it in the same way you don't need lots of things, but it's ignoring legal protection you could have for free? Plus every single time you buy on credit you are subsidising my credit card rewards.
In the UK it's Section 75 of the Consumer Credit Act, 1974.
> Under Section 75 of the Consumer Credit Act 1974, the credit card company is jointly and severally liable for any breach of contract or misrepresentation by the retailer or trader.
> You don't have to reach a stalemate with the retailer or trader before you can contact your credit card provider - you can make a claim to both the retailer and credit card provider simultaneously, although you can't recover your losses from both.
> This right is particularly useful if the retailer or trader has gone bust, or it doesn't respond to your letters or phone calls.
> Section 75 of the Consumer Credit Act also applies to foreign transactions as well as goods bought online, by telephone or mail order for delivery to the UK from overseas.
>Which ones specifically? If they are truly for free then I don't need to pay for them by virtue of having a credit card.
Chargebacks, protection against a stolen card, no real money being tied up during a dispute, etc.
>If they are truly for free then I don't need to pay for them by virtue of having a credit card.
Every consumer is already paying for them because business price in the credit card fees into their retail prices. If you don't get a discount for using cash/debit, you are already paying for this protection.
In the US, by not using a card, you are still paying for the benefits without getting them.
all merchants who accept credit cards incur fees for doing so and pass that cost on to consumers. Not using credits cards is giving up the opportunity to recapture some of that cost in the form of rewards. There is not a good reason to not use a credit card as a debit card.
Live within your means.