Cash or credit? For maxed-out custome...

Cash or credit? For maxed-out customers, answer is more often n...

There are 14 comments on the Chicago Tribune story from Nov 23, 2008, titled Cash or credit? For maxed-out customers, answer is more often n.... In it, Chicago Tribune reports that:

Retailers like Wal-Mart Stores Inc. , Target Corp. and J.C. Penney Co. are noticing a marked shift away from credit cards in favor of cash and debit cards.

Join the discussion below, or Read more at Chicago Tribune.

Tom In St Louis

Saint Louis, MO

#1 Nov 23, 2008
This is great news...I hope I can continue to live a credit-free life as the people in this story do.
Stark

Chicago, IL

#2 Nov 23, 2008
The best way is to use a credit card, and pay it off in full each month. Then you get the protection and rewards of a credit account, without the fees.
Moot Point

Park Ridge, IL

#3 Nov 23, 2008
Stark wrote:
The best way is to use a credit card, and pay it off in full each month. Then you get the protection and rewards of a credit account, without the fees.
Yeah but most people are not disciplined. That is what the credit companies count on; Not Paying On Time.
IMHO

Chicago, IL

#4 Nov 23, 2008
Moot Point wrote:
<<Stark wrote: The best way is to use a credit card, and pay it off in full each month. Then you get the protection and rewards of a credit account, without the fees.>>

Yeah but most people are not disciplined. That is what the credit companies count on; Not Paying On Time.
true. they should be able to make do on the fees from merchants and the annual member fees, but of course they are completely drunk on late fees, sky high interest rates and universal default.

also, for people trying to improve their credit score, which should be everyone, don't get suckered into applying for a store credit card. they give them out like candy and the rating agencies look down on them. in the short term, a store credit card will probably lower your score. also, it adds one more payment due date to your schedule, increasing the odds that you will miss a payment.

get one credit card that pays miles or cash back. get a second card for emergencies only.

if your credit is completely busted, get a secured credit card that forces you to deposit money into an account. you can only charge up to the amount you have saved. add money to the account with each paycheck.

don't use a debit card. once the money is taken from the account, you have none of the protection that you get with a credit card.

stop spending.
pay down your debt.
pay your bills on time.
lower your debt to credit ration...whatever your credit limit is, get your debt below 30 percent of that limit. ideally, get it to zero and keep it there.
The BEST System

Korea

#5 Nov 23, 2008
I have a great system too. I borrow against the equity of my home, and use the money to buy expensive electronic equipment, a summer cabin in Wisconsin, and vacations to Hawaii with my wife. To further my income, I have six credit cards which allows me to buy stuff when I see it and like it. Once in a while, I make a small payment or two but usually my paycheck goes to pay for my Platinum Premium Cable and of course, the bar.

Eventually the card guys and bank get all mad about it, but no biggie. I just file for bankruptcy and get the debt wiped clean. I love American financial rules! Plus, Obama says it is not my fault and wants to help people "down on their luck" like me. It does make things a little tighter though. Now I can only get five new credit cards.
Cynical Kinda Guy

Gurnee, IL

#6 Nov 23, 2008
Maxed-out!

And with Obama, soon we will all be taxed-out
catlover911

Stroud, OK

#7 Nov 23, 2008
Stay at home mom. One income family. Volunteer my time for free. Help out the kids whom parents are to young(don't give damn) to know responsibility and rely on their parents(grandparents) to help put food and clothes on the kids backs. And the irresponsible parents get to put their kids on free health care and get all help for nothing. My family have tried to get out of debt but the banks are maxing us out with unfair disgraceful fees. Wouldn't be overlimit but they have helped get us there. Also helping kid go to college and don't glatify for a free tuition scholorship.
UYT

Villa Park, IL

#8 Nov 23, 2008
I hope through all of this people have learned something. Credit card companies/all financial institutions do not have your best interests at heart. They live and die by fooling you into taking out more credit cards and more debt than you can afford. They WANT you to pay fees. That is they way executives get their big bonuses. Fees and interest are their revenue stream. So, the business owner works with the risk department to try to convince the risk managers to loosen criteria to "buy deeper" which means allowing the business owner to market credit products to less credit worthy people.

The offers are made - the folks in desperate need of cash take the offers of credit cards or loan products - but then can't pay the loans back. You start getting charged fees and interest until you are sunk. And the business owner who make half million a year buys another BMW as you struggle to pay your minimum payment.

They know exactly what they are doing when they target less credit worthy people or people who are already in financial doo-doo. They do it on purpose. Only now it's reached a crisis point where too many executives representing too many lending vehicles have lured too many high risk clients in ... now none of the loans can be paid back. The house of cards is crumbling.

All of this is legal. So, if you've noticed - there hasn't been a single arrest in this crisis.

Regulation is desperately needed or these executives will continue to get creative and target people who should not be allowed a loan to begin with.

“WHAT HUMP? ”

Since: Mar 08

Chicago

#9 Nov 23, 2008
No, the old fashioned answer is "no thanks, just lookin".

If your cards are maxed out you shouldn't be spending anything!

Won't kill ya to do without for awhile.
Anonymous

Chicago, IL

#10 Nov 24, 2008
Stark wrote:
The best way is to use a credit card, and pay it off in full each month. Then you get the protection and rewards of a credit account, without the fees.
Exactly. And you get the satisfaction of screwing the credit card companies and earning a little interest for yourself.:)

I can't believe this article's tone seems to treat buying only things you can actually afford as some kind of quaint relic of times past.
American Made

Allentown, PA

#11 Nov 24, 2008
The American economy is based on having maxed out American citizens buying and buying and buying. This whole thing of Americans going back to cash will certainly slow down our entire economic system for sure. If it weren't the case, the government wouldn't be giving americans these little "stimulus" checks to go out and spend. it's going to be a tough ride for retailers and businesses who rely on people having descretionary cash or credit. Many of those businesses will simply go out of business - small businesses first.

Since: Dec 07

DuPage County

#12 Nov 24, 2008
If you have spending problems, just watch some reruns of "Big Spender" on A&E...hilarity will ensue.
Pondering

United States

#13 Nov 24, 2008
Use a debit card for everyday purchases.
Have a credit card for emergencies.
Buying new clothes is not an emergency.
Going on vacation is not an emergency.

Fixing your ride is an emergency.
Fixing your house(ie heater/plumbing) is an emergency.
Pete

Chicago, IL

#14 Nov 25, 2008
Debit cards are a scam on the public. If the number is stolen, your money is gone right away and you might get it back after a long delay. Not to mention, use a debit card at a hotel, car rental, gas station or even some restaurants and you'll realize a hold has been put on the card for as much as $500 to handle "incidental" expenses. No big deal on a credit card, but that kind of hold on a debit card will cause many people to overdraw their checking account. Just say no to debit cards. Just say yes to responsible credit card use.

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