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Disney Credit Card

Question: Aren't there uses for credit cards that are considered positive uses? Like rebates and airline miles? No, this is a common myth. A truth would be that a responsible credit card use simply does not exist. Currently Americans are in serious Credit card debt, it has become a major problem in the United States.

There is NO positive side to credit card use. You will spend more if you use credit cards. Even by paying the bills on time, you are not beating the system! But most families don't pay on time. The average family today carries $8,000 in credit card debt according to the American Bankers' Association.

Now let's talk about the rebates. If you were using a credit card at 5%, you would have had to have spent $80,000 to get $4,000 rebates on new cars that lost $6,000 of value when you drove them off the lot. That is not a good deal!

Cash vs. Credit Cards

When you pay cash, you can "feel" the money leaving you. This is not true with credit cards. Flipping a credit card up on a counter registers nothing emotionally. If you use credit cards instead of cash you will spend 12-18% more. This is money you could have saved.

If you "have to" use plastic, I suggest a debit card. I use them for travel and the occasional convenience of ordering something over the Internet or phone. Other than that, I use cash.

Personal finance is 80% behavior. You need to cut out habits that make you spend more. You do not build wealth with credit cards. Use common sense. When you play with a multi-billion dollar industry and you think you're going to win at their game, you are naive. You cannot beat the credit card companies.

If the bank won't budge, your options aren't great. You can cancel the card and refuse to pay the fee; if it shows up on your credit report, you'll want to add a notation that you dispute the entry. It might be easier to cough up the fee and let it go. But that can make matters worse, says Robert McKinley, president of Ram Research Group, because some banks are switching customers who pay late more than once to interest rates as high as 21% to 26%.

One way to avoid the problem altogether is to use an electronic bill-paying service. Most guarantee that your payment will arrive on time if you send instructions four or five business days before the due date.