Monday, May 30, 2011
Credit Card Deadbeat
In the parlance of the credit card industry anyone who pays off the balance on a credit card at the end of the month is a deadbeat. That's right! In their view, you are not paying for their service unless you carry a balance and pay interest. I was shocked once when a store credit card banged me with a $5 charge when I owed only a couple of dollars. I immediately paid them off and closed down the card. Now some people think that having a bunch of credit cards is a good thing because it can raise your credit score. Tell you what, if you pay cash for everything including houses, you don't need to have a credit score. You can do all your buying with a debit card or cash. You can buy airline tickets or rent a car with a debit card. I recommend never having a balance that can't be paid off at the end of the month. I recommend this for two reasons. First no one knows the future. You can lose you job or have a medical emergency, etc. Secondly credit card companies are fond of changing the game at the drop of a hat. They can lower your limit or raise your rate and you are locked in and at their (no) mercy. Better to pay them off completely and tell them to go fly a kite. Pay off all your cards and deal in cash only.