Capital One took money out of my bank account without authorization...

[KSpan]

Only a good suggestion if you don't have the dedication and intelligence to pay it off every month.

Given the cash back options...frequent flyer point options...etc on credit cards, you are better off putting everything you can on your card and then paying it off at the end of every month.

This only gets in trouble if you can't budget and ensure that you don't charge items AND spend the money needed to pay it off.

This is just like people who think it is a good idea to be getting a tax refund. Dumbest thing you can do with yoru taxes. you just gave the gov't your money interest free.

Best way to do it is to have as little as possible witheld (right up to the point of payign a penalty for under witholding)....put the extra money in an account each month....then use the money to pay your tax bill at the end of the year. You get the time value benefit of the money.

Agree 100% about the tax refunds, but I doubt most people see and/or redeem enough points or miles to make the hassle and additional risk, as described in the OP, worthwhile. Also, studies have shown that people in general spend more money when using credit than when using cash, and I'd be willing to bet that the related increase in spending negates any gains in miles or "rewards". I'd be willing to bet that on an annual basis the discounts I get on things when I use cash coupled with less spending is at least equal to these programs, and my finances are simpler and easier to manage.

I made close to $1k in rewards in 2012 just for using credit cards.

My above point applies here as well, and while I'm not sure of your situation this amount seems unusual. Assuming a 2% reward rate (I'm sure there are higher out there), you'd have to spend $50,000 to get that. I bet most people don't have enough qualifying expenses to "earn" nearly that much.

Not only are there monetary perks, using a credit card (and paying it off) is also good for your credit score.

Of course, the reason credit card companies can offer such good deals is that 90% of the people using them are idiots and get behind on their payments and end up paying out the ass for interest

I haven't used a credit card since 2006 and have been completely debt-free other than my mortgage (opened mid-2009) since 2008, and when I checked my credit 2 months ago my credit score was 835. Too many people get caught up in the FICO game.

[thatlookseasy]

I haven't used a credit card since 2006 and have been completely debt-free other than my mortgage (opened mid-2009) since 2008, and when I checked my credit 2 months ago my credit score was 835. Too many people get caught up in the FICO game.

Thats solid. But as a 21 year old, I can tell you its much more difficult to build credit in the first place than it is to maintain. Got to play the game at some point or you wont be qualified to get a car/ home loan when you need it

Also, I'm pretty sure your credit score takes a penalty if you have no credit cards (or too many)

[KSpan]

Thats solid. But as a 21 year old, I can tell you its much more difficult to build credit in the first place than it is to maintain. Got to play the game at some point or you wont be qualified to get a car/ home loan when you need it

Also, I'm pretty sure your credit score takes a penalty if you have no credit cards (or too many)

Appreciate the compliment but I'm only 29, meaning I stopped using it when I was 23, and only had 1 card with a $1000 limit and paid it off monthly when I did use it. There are fairly easy ways to get things like cell phone bills and the like reported to build "credit" without playing the credit card game, they're just not profitable for the credit industry and thus not very well known.

[Jase]

Call Peggy.

[Ja Rhule]

I got 4 different credit cards and some offer 5% on flights and hotels, gas and grocery shopping. So I have to spend $20,000 and not $50,000 like u stated.

[KSpan]

I got 4 different credit cards and some offer 5% on flights and hotels, gas and grocery shopping. So I have to spend $20,000 and not $50,000 like u stated.

Again I don't know the full situation, but the thought of having 4 dfifferent cards/banks in my life makes me cringe. I still bet that my general spending and cash savings gets me to your $1000 mark, and even if not my the value of my time and not spending it dealing with card companies and thier associated risks and headaches more than makes up the difference.

[Ja Rhule]

$1k in rewards not including general savings. I do not deal with credit card companies. Its simple. I got email from Chase "gas and groceries 5% back for next 3 months". I use chase card for next 3 months. Gotta pay my utility bills, taxes and etc I used Capital one because u get 1.5% on everything. Take 3 seconds to schedule a payment online. Why say no to free money?

[MadHatter]

Hatter, you're very sheltered.

Please enlighten me on how I am "very sheltered" ole socialist one.

You have not met me....know nothing about me....know nothing about my family.

This should be entertaining.

[MadHatter]

Again I don't know the full situation, but the thought of having 4 dfifferent cards/banks in my life makes me cringe. I still bet that my general spending and cash savings gets me to your $1000 mark, and even if not my the value of my time and not spending it dealing with card companies and thier associated risks and headaches more than makes up the difference.

Really not much to deal with if you are disciplined. The risks and headaches that you refer to are user created. Use the card and pay the bill at the end of the month....and there are no headaches.

If you combined the cash back from the cards ALONG WITH your general spending and cash savings, you would be at a $2,000 mark.

Using the cards correctly can be financially beneficial. But, as some have said, doing it without the discipline of paying everything off every month could be a huge mistake and tragedy.

[Ja Rhule]

I'm an accountant. Managing 4-5 credit card accounts is nothing to me.

[Ja Rhule]

MH sheltered?lol U should see him on tailgates... Totally opposite from sheltered...

[Happy Panther]

This is just like people who think it is a good idea to be getting a tax refund. Dumbest thing you can do with you taxes. you just gave the gov't your money interest free.

Forced savings for some people may outweigh the interest lost (which is tiny these days.)

[Cary Kollins]

I'm an accountant. Managing 4-5 credit card accounts is nothing to me.

Yeah a good friend of mine who is a CPA tried to explain to me how I need to sign up for all these credit cards to reap the air miles. It flew right over my head and I just signed up for a Venture card lol.

[Delhommey]

Please enlighten me on how I am "very sheltered" ole socialist one.

You have not met me....know nothing about me....know nothing about my family.

This should be entertaining.

Fair enough.

You're either posting in character or you're sheltered.