Not all of us who do this use credit cards in that way- some of us pay them off every month. Credit cards are like alcohol- some people can use them responsibly, some really mess up their lives with them, and it’s your responsibility to know which category you are in and act accordingly.
I prefer credit cards to cash, ever since my purse got stolen in 1999. Replacing my credit cards was fairly easy, but the cash I had was just gone. I was a grad student at the time and had about $100 in my purse (I had recently gone to the ATM), so I definitely felt the loss. No more carrying significant amounts of cash for me, unless I know I’m going to need it in the very near future.
I rarely use a credit card, but I use my check card for virtually every purchase. I hate carrying cash - and I get well and truly nervous carrying more than about 60 bucks in cash. There are a few things I do regularly that require cash (cab fare from the train station to my house when my husband’s work schedule doesn’t permit him to pick me up, for example) so I carry a small amount with me, but for everything that’s not strictly cash-only, I use a debit card. If my purse gets stolen (or someone sneaks into it on the very crowded subway and I don’t catch them at it), then cash is gone for good - but my credit card and debit card have theft protection for free automatically. If I have $60 in my purse, I’ll never see it again, but I won’t pay a penny of any charges racked up on my cards after the time of theft (or, more accurately, after the last activity on my card that I verify when I call to report the theft).
I wonder if the friends who are paying for everything with a “credit card” are really doing so with a visually-indistinguishable debit or check card. My debit card looks precisely like a credit card - but has no interest because all charges are deducted directly from my checking account. It also has no fees, but that’s a result of my deal with my bank.
As it happens, my husband and I have a car loan (7 year same-as-cash) and around-about $5k in credit card debt (a combination of my pre-marriage credit card debt dating from my law school days when my budget was stripped to the wire so anything needful and extra went on the card and a legacy of the year of unemployment my husband got socked with immediately after we got married). There’s a better-than-average chance (depending on holiday bonus) we’ll be debt-free by year’s end - and certainly within 3 years. Or so the current plan dictates.
I went into debt when I decided to quit my high-paying but boring and dead-end job to start my own business as a freelancer. I was young when I did this and didn’t know much about the world at large, and quickly found myself without any work at all.
I took out loans and used my credit cards on promotions, advertising, and of course things like postage and printing costs to send out my illustration portfolios to anyone who would look at them. I got desperate in looking for work, and eventually found myself really, really in debt. I started using my credit card to do things like pay the electric bill and to keep my cell phone (which I couldn’t cut off because that phone number was on the thousands of business cards, portfolio pieces, websites, etc. for my business).
I took a part-time job to help me offset some of these costs, but all that job did was keep me from drumming up more business for my full-time job. I maintained my debt in this way for a 2 or 3 years before admitting defeat, and starting my quest for a full-time, high-paying job like the one I’d had years before but threw away.
I’ve been here 3.5 years now and have eliminated all the debt I built up, although I admit I eliminated it by selling my old house, buying a new one, and using some of the difference to pay it off in one chunk… similar to taking out a 2nd mortgage, but without the 2nd mortgage, if that makes sense. Now my only debt is my house ($84,000) and my car (about $16,000).
Stupid spending, stupid credit card management, and one hell of a lot of student debt. Oh, how it adds up.
A gift fell into our laps this year when my employer laid me off from a job I was planning to quit. It was like winning a small lottery; they gave me half a year’s severance and I was interviewing for my next job within days. That helped a lot - but until next September I’m still paying off a goddamned consolidation loan. The day that’s paid off I swear to Christ I am never going into debt again except for house and car. And I’ll run every car I ever own into the ground.
We learned our lesson. Most people have to learn this lesson the hard way. In our case, fortunately, we always had substantial revenue streams. Those who do not… I have a lot of sympathy. You can be bright and still act stupidly with your money.
The idea of medical visits bankrupting you makes me sick to my stomach.
I never had a credit card in college, so I couldn’t be tempted to do dumb stuff with one. After I graduated from college, one of my first jobs was working for a mortgage brokerage, and one of my tasks was pulling credit reports on potential borrowers. Boy, was that a good lesson. I have excellent credit - but I did carry a small debt on my credit card for years, largely because I kept moving, which isn’t good for your finances. The good credit is from the fact that I always paid my bill responsibly, even if it took me several years to pay off entirely.
Currently my only debt is my student loan. And I’m in the process of applying to grad school right now, so I expect that to go up exponentially in the future.
For me, beyond student loans (2 more years!) and mortgage, it’s unexpected (and unsaved for) large expenses: car repair or vet expenses. And I have a bad tendency to put travel expenses on a card but then procrastinate on paying it off. But I’m getting better about it and carry any balance on 0% interest cards.