• @Passerby6497@lemmy.world
    link
    fedilink
    English
    123 months ago

    These are loans. And making them attractive with cashbacks and rewards is done to trap unresponsible spenders

    I am aware, which is why I specifically said

    This is bad advice for anyone with good credit and spending habits.

    For people who aren’t irresponsible spenders, it’s a bad financial decision not to take the short term bank loan. Sure, I don’t need to spend the banks money because I have enough in my checking account to cover it. But by not doing so, I lose money on any transactions that don’t charge me a fee to run my card.

    If you’re not responsible enough to use a credit card and not destroy your finances, absolutely do not use them. But for those of us who are, it’s a dumb idea to eschew it just because you have the money on hand. Like I said, I haven’t paid interest in a decade and have made thousands from my normal spending habits.

    If I followed your advice, I would be objectively worse off, because I’d be losing money from my rewards for no benefit whatsoever. And I can guarantee I’d be materially worse off, since my credit card is the reason my credit is as good as it is, and that bullshit has a pervasive and perverse effect on your life. It’s not only loans that are impacted, but insurance, housing and employment can be as well. So maybe I should have left good credit off, since responsible spending will build your credit up even if it is bad currently.

    TL;DR - responsible credit card use is a good thing, and foregoing it just because you have money on hand is a bad financial decision. Pay that shit off immediately and there’s no material downside and you still get all the benefits.

    • @zbyte64
      link
      English
      53 months ago

      Irresponsible vs responsible is how the credit card companies frame it, but I think most of the time it’s about luck. The kind of luck where the primary income gets hit by a car or someone in the family gets cancer.