Becoming Debt Free in 2009

April 28, 2009

Perception of Credit Card Users

Filed under: Credit Cards — ambercouric @ 8:33 am

I spent the weekend shopping.  I’m not one that likes to shop but in order to get the best deal sometimes I just have to bite the bullet and shop.   Many times the first place I check has the best price but that is a whole other story.

So, this weekend my son and I had to shop.  He had no desire to be there any more than I did but we suffered through.   The entire day ended up being a conversation about credit cards.  As we would go through each checkout, Kennedy would listen to see if shoppers were paying with debit or credit – I think we were the only ones with cash at the few stores we went to.

I have never paid any attention to who pays with credit and who pays with debit.  But, Kennedy was quick to note how many people used a credit card even in the grocery store.  In his limited understanding of shopping, he came to the conclusion that these people probably didn’t have much money.  I on the other hand immediately thought maybe they just wanted airline miles.

Then I was talking to my neighbor and she was complaining about her husband using credit cards.  He does pay off the cards each month but she is embarrassed when they go out to dinner and he uses his LL Bean card to get the points.  She said she actually feels poor when they use the credit card.

I have never been one to use a credit card for minor purchases but I often used it for big purchases $500+.  I also have never given much thought to the people who use cards as to if they can afford or not whatever the purchase.

So, I want you thoughts.  Do you have a perception of people who use credit cards?  Do you use your card for minor everyday purchases? Or are you in the  Dave Ramsey credit cards are evil camp?

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February 17, 2009

Credit Cards – Cardholders (#1)

Filed under: Credit Cards,Dave Ramsey,Debt — ambercouric @ 10:19 am

I have thought about this post for some time.  I have come to the conclusion that I will need to have several posts to say all I want to say.  Today, I will discuss the cardholder.  Tomorrow, the card issuer.  Thursday, I will combine the two. 

 The cardholder.  The person who uses the plastic.  We come in various sizes and shapes and our attitudes vary widely on the use of the credit card.  I have only chosen a few types here and many people will see themselves somewhere between these categories.  This in no way represents all cardholders.  These are groups that I see most often written about in the PF blogs.

Cardholder 1 – THE REWARDS ARE MY FRIEND -is the person who can use the card, pay it off each month and collect the rewards.  There are many people in the PF blog world that are able to do this successfully.  These people probably have their financial house in order and understand that credit can be used as a tool.  By the way, these are the people that the credit card companies don’t like.  The companies aren’t making money from them.  These are also the people who are shocked when their card limit is decreased and the interest rates go up.  These are the perfect customers IF you are giving them a mortgage, car loan, or personal loan not  a credit card.

Cardholder 2 – THE MAJOR PURCHASER -is the person uses the card for big purchases and pays off relatively quickly.  Usually a few months maybe up to a year.  This person probably weighs the cost of the interest to be paid over having the item sooner.  This person doesn’t charge the daily expenses or buy just because they have available credit.  My guess is that this person carries only a couple of cards.  The cards aren’t maxed out and more than the minimum payment is usually paid.  This person understands using credit but isn’t as disciplined as cardholder 1.

Cardholder 3 – THE SPENDER – is the person with numerous cards.  Lots are maxed out and have high interest rates.  The spender may at times feel like the banks are out to get him.  The spender likes stuff or uses the credit cards to live.  The spender may use his card for groceries, gas, the day to day expenses. In the early days of the spender’s credit card  use it was probably cool to be able to get whatever he wanted immediately.  Initially, the spender planned to pay early and more than the minimum but month after month as the charges went higher and more cards were added this became a vicious cycle.  This is actually the person the credit card companies like the most.  The person is paying the minimums at a high interest rate.  Once in a while there may even be a late charge or over the limit fee added.

Cardholder 4 – CREDIT CARDS ARE EVIL and is no longer a cardholder- is the person who swears by Dave Ramsey and truly feels that credit cards are the worst thing in the world.  Their card went in the shredder, blender or it was blow torched.  This person can’t imagine why anyone would even consider carrying a credit card.  Most of these people were at one point  a cardholder 3 person but has been disciplined and gotten rid of all of their debt and vow never to be there again.

I am more like cardholder 2 – the major purchaser.  I can tell you pretty close to every transaction ever made on my credit card.  The $8000 I have been paying off since I started this blog was a new refrigerator, washer, dryer and sofa.   Now that I have it paid off I will plan a little better for major purchases.  But I will still use it for online orders and travel. 

What type of cardholder are you?  Can you think of another category that I left out?

February 12, 2009

Credit Card Debt FREE

Filed under: Credit Cards,Debt,Journey to Debt Freedom — ambercouric @ 10:01 am
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Anyone who reads my blog knows that I HATE my car payment.  I had all intentions of working to pay off the car first.  My husband on the other hand HATES the credit card payment.  So we compromised and decided to pay one debt in full.

We took our tax refund, tutoring money, regular debt reduction payment and a bit from savings and PAID off our credit card.  The reasoning is that with the car the payment is fixed and we can continue to aggressively pay it down.  Who knows what would happen with the credit card the way the companies continually change the rules.

I have no plans to cut it up and throw it away.  I like to use it for online ordering and air line tickets, etc. but I will not use it unless I can pay it in full.  I have never been one to charge day to day expenses so I am sure that this will work for us.  I will also remember how hard we worked to pay it off.

Wow!  What a feeling.

January 12, 2009

Home Alone

Filed under: Credit Cards,Random — ambercouric @ 10:24 am

Today is the first day since the beginning of December that I am home alone.  DH is at work, Ashby is back at college, Kennedy is in school and the dogs are loving the backyard (unsupervised).

I am going to spend the day catching up on all the cleaning, menu planning and of course reading all the blogs that I have neglected the last few days.

Hope everyone has a great Monday and I’ll be back tomorrow with some personal finance stuff.

November 9, 2008

First Credit Card

Filed under: Credit Cards — ambercouric @ 6:28 pm
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I have often read that credit card companies like to get college students because a person is more likely to be loyal to the bank that first gave them a card.

While reading Moving on up!s blog about paying off 44% of her debt she stated her next challenge is “the evil that calls themselves Citibank”, I actually laughed because I have such a negative feeling about Citibank. They were the ones who gave me a credit card while I was in college. Never had any problems with them and let go of that card years ago.

Do you still have the first card you got? How do you feel about the bank that gave you that first card?

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