Just need to vent...

I have been called a card on occasion

 

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For some odd reason, which I never knew or could understand, I was given an AMEX Gold Card. One given beautiful Friday nite my GF-at the time went out for ribs at a really good place. We past a brand new YUGO dealer. After dinner, where I probably had too much to drink, we stopped in. For another one of those reasons that I couldn't figure out, I bought a YUGO, using that new Gold Card.
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As it turned out, that following Monday late morning I picked up a coupla pizzas (Pizza Hut) and took that car back. We worked out another deal, the pizzas for the car, and they did take it back.

 

Any time you buy something with somebody else's money and then pay them back, you're using credit. So a loan on a car, a mortgage on a house, and so on.

Cards are one form of credit, different from others in a couple significant ways. One, they have interest rates that are pretty exorbitant compared to many other kinds of credit (but not to payday loans, which are even worse). On the other hand, credit cards also give you a grace period where if you pay each statement balance in full, you can keep on using other people's money while paying no interest at all.

So that means that working out the answer to the "will it benefit me to use credit for such-and-such" can depend a bit on whether it's credit cards or some other form of credit. (And also, if it's cards, whether you'll be paying each balance in full, or making smaller payments.)

 

Also, loans for cars and homes are secured by collateral. Cards are unsecured personal credit, with no collateral.

 

And that's why you'll be paying anywhere between 20%-40% APR on the balance, if you don't pay in full by the EOM. They gotta eat too and eat all the defaults. This is how people become volunteer slaves to financial institutions.

 

my favorite ... (margin trading) stocks on margin & short sellers. Might as well be blackjack
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Overall, I suspect that the card companies harvest enough interest and fees from the defaulters, before the defaults, to more than cover those default losses.

They have an excellent idea who the bad credit risks are. They wouldn't keep extending credit if it wasn't profitable. Those 'volunteer slaves' are cash cows for typically a long time before just some of them go bust.

 

I hope that's still a bit of an exaggeration. The highest rate among mine seems to be 18%-ish right now, and that may just mean it's been too long since the last time I called them and had a conversation about it.

They do threaten a 29.99% penalty rate if I default, but that would be an exceptional situation.

What my credit union is currently advertising is 15.5% to 17.5%. For whatever reason, I've never signed up for a credit card from them, despite being a member for decades.

 

The 40% bit appears to be an exaggeration, top end now is about that 29.99% penalty rate you see.

But new rates below 20% are somewhat scarce now. Here are rates from one company's survey, though as a major sub-prime lender, it does have a vested interest in not cluing in potential customers to the competition's best-lowest rates:
https://www.lendingtree.com/credit-cards/study/average-credit-card-interest-rate-in-america/

 

Can't really say I know what my credit card companies charge for interest, because they haven't charged me yet.

My goals are pretty simple:
Don't outlive your money or be a burden to your children.
Have a little fun on the back 9.

DON'T worry about money.

 

I'd like my better ½ hear you say that. Never mind - she doesn't believe it from the cpa .....
"at the funeral, no one says (s)he could really earn a buck"

 

Easier said than done. Frankly, it is not as simple as you said for many (or most?) folks living day to day with far less saving than they should have for the age. The median retirement saving for all families in the US reported by Federal Reserve is only $87K in 2022. Yeah, that is not going to last long... especially after paying for a car cash...lol

 

That's the best way to do it. Still, the rate is printed on every statement, and I do now and then glance at it, just so's I know what they would be charging me if a situation arose where I'd want to let them for a month or three.

And it has generally been the case that if every several years I give them a ring on the phone and ask if the rate I'm seeing on my statement is the best one I could see there, it manages to improve a little.

 

Credit Unions are the best places to get most loans and credit cards since they're a nonprofit and usually don't bombard poor credit people with a new credit card offers, so lower risk of defaults.
I know some people that's paying mid 30's% - they were shocked when I had them drill down to find their APR. It was a no-brainer since I knew they always lived beyond their means, max'ed out any new credit card offer they would get, and make the minimum payment every month.
I pick my credit cards by the amount of cash-back or rewards they pay-out. Don't care what the interest rate is since I pay in full, every statement.

 

A single card doesn't offer sufficient fault tolerance when traveling, especially internationally.

We have experienced a lost card intended to pay hotel bill (knew what restaurant it was left at, but they didn't re-open until after our flight out), a declined card from failed travel notification, a declined card from fraud from major retailer data breach (a week before it was reported in the news), then its replacement card not arriving before next travel despite repeated promises that it would, a possibly compromised card that I could freeze only because I had other cards available to use, etc. Travel companions experienced bag theft, losing their only card and putting a pinch on entire trip. Experienced tour guides have mentioned that even they have suffered pick-pocketing, though not on our trips.

Our tour guides recommend having money and payment methods and copies of critical documents separated into 3 different places, so that loss of any one does not create a travel emergency. For us, that means a different valid credit card in each stash.

 

I remember when people would travel they'd use Travelers checks. Now I see the serious downside of checks;

What Is Check Washing? How Can You Protect Yourself?.

My poor sister, after taking care of our grandmother & dad (as they experienced their last few months on hospice) is now taking care of Mom, who's now in her 90s. Selling her own house, & Mom's & packing everything up to move out of SoCal, sis discovered not only was her bank account getting cleaned out, but mom's as well as someone was stealing the mail & washing the checks.
Wish i could catch that person and have a few moments with them alone ....
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Often wonder what sort of moral vacuum people who would commit a crime like that to another human live in.
How could you look others in the eye or even stand to look at yourself in a mirror!

Faced some very hard times growing up coming from a large family with a single breadwinner - but never would begin to even contemplate taking something that belong to another individual for myself.

 

I did a lot of overseas travel before COVID, slowed down a lot since. I kept an overseas-, work-, and personnel- card; simplifies the record-keeping which makes unauthorized charges stand out.

PS; you'll need a secondary card if you missed or forget to make a monthly payment. You'll need to zero out your balance for 15-30 days to stop the interest charges from accruing. The card company will usually wave late fees and interest payment if your a good customer and your usually allowed one every 18-24 months. That's happened to me on occasions, on a long overseas deployment.

Hope this helps

 

^ This. Currently awaiting my replacement card following an effort to help out an unscrupulous neighbor with a U-Haul rental. Even right here at home, it is nice having another card to use while I wait.

I kinda knew enough about this neighbor already to be cautious and not often surprised, but it turns out I can still be surprised.