# My credit cards, a second income. **URL:** \ **Category:** Miscellaneous and Personal Stuff I Must Share\ **Created:** [November 26, 2008, 6:08pm UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579 "2008-11-26T18:08:00Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![CAT\_1](https://avatars.discourse-cdn.com/v4/letter/c/9dc877/32.png) [@CAT\_1](https://boards.straightdope.com/u/CAT_1)\ **Post date:** [November 26, 2008, 11:41pm UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/21 "2008-11-26T23:41:29Z")
I was one of those sucker college kids who got a credit card for no good reason, and then charged it up to about 4K. It was all just stupid stuff too, like gold jewelery I never wear. I paid the minimum, or just a little more for years. The best thing that ever happened to me was when I took a waitressing job, and saw how hard it was to earn, 10 or 20 dollars in a shift. I worked in a pretty sucky place, with bad tippers. But it taught me the value of a dollar, and how to use cash again. I saved every penny of my tips and paid off those cards and haven’t used a credit card since. It has been about 12 years for me. My hubby came to the marriage with about 6K of credit card debt. We also paid his off after we got married. We do have a card we keep for emergencies, and have only used it once for our sick dog, about 5 years ago. Other than that, we haven’t used one in about 8 years. I feel FREE!!! It is so easy to actually save up for something, for a few months, or a year and pay for it at once, rather than get it and pay for the rest of your life! ---
**Author:** ![CAT\_1](https://avatars.discourse-cdn.com/v4/letter/c/9dc877/32.png) [@CAT\_1](https://boards.straightdope.com/u/CAT_1)\ **Post date:** [November 26, 2008, 11:49pm UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/22 "2008-11-26T23:49:29Z")
> [@eleanorigby](#): > > I now use only cash to pay for stuff like Christmas presents etc, but I have to ask: what do you all do for high end repairs? My mechanic no longer takes personal checks and I just had to pay $512 for some major brake work. It went on credit, of course. I hope to pay it all off at the end of the month, but seriously, what do you all do for stuff like that? Furnace repair, plumbing etc? Sometimes you have to use credit. > > We’re paying off 20K–very stringent budget, very limited Xmas this year. And once that card is down, I’m going to “say” that it has a 5K limit, tops. I am not the only on who uses this card and that is a problem (at times). It cost my husband $75/tank of gas for a while there–and he used at least 2 tanks/week just getting to work (an hour drive one way). That adds up, very quickly, no matter how you pay for it. We just spent about $700 on car repairs and used our debit card. They take it the same as the credit card, but there is cash in the bank to back it. Once we paid off our credit cards, we built up a little stash of just a few thousand dollars for emergencies. It wasn’t that hard to do, once we didn’t have to be paying on all those cards. Hubby had about 6 of them. And we were paying about $500 a month toward them all, until I transfered them all to one balance, and paid it off in a couple of years. We even paid cash for one of our cars(used, 11K) by saving for it for a year. It felt so good not to have to take out a loan. BTW, when we did this our yearly income was about 40K (30K for hubby and 10K for me). So we are far from wealthy. It takes a lot of work, but you can make the turn around and actually put that money that you would be paying for high interest cards in a savings account. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [November 27, 2008, 12:18am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/23 "2008-11-27T00:18:13Z")
You can get a car loan for no interest, or so they claim. If that’s a fact, then you’d be better off putting the purchase price in a safe investment, like t-bills, or just leave it in savings and let the dealer carry your loan. There are several instances where it makes more sense to not pay cash. Buying a house can be another, where it’s not a wise move to pay cash or make a huge down payment. All a large down gets you is a better finance deal (points, etc?), and that has upper limits. Even a shorter mortgage term isn’t always a good deal. You can benefit by using credit, but you need to know what you’re doing or hire someone who does. But don’t listen to me. I happily live my life like there’s no tomorrow 😃 ---
**Author:** ![ivylass](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@ivylass](https://boards.straightdope.com/u/ivylass)\ **Post date:** [November 27, 2008, 12:20am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/24 "2008-11-27T00:20:16Z")
> [@eleanorigby](#): > > I now use only cash to pay for stuff like Christmas presents etc, but I have to ask: what do you all do for high end repairs? My mechanic no longer takes personal checks and I just had to pay $512 for some major brake work. It went on credit, of course. I hope to pay it all off at the end of the month, but seriously, what do you all do for stuff like that? Furnace repair, plumbing etc? Sometimes you have to use credit. Emergency fund. We had to replace our freezer recently, and we wrote a check for it. Debit card will work too. It’s funny how much extra money you have when you’re not sending it to Chase or Capital One or American Express. We’re currently building up our emergency fund to 3-6 months’ worth of expenses, then when things crop up, we’ll be ready. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [November 27, 2008, 12:29am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/25 "2008-11-27T00:29:00Z")
Don’t many hotels require a credit card for booking? ---
**Author:** ![Mangetout](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mangetout/32/19_2.png) [@Mangetout](https://boards.straightdope.com/u/Mangetout)\ **Post date:** [November 27, 2008, 12:35am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/26 "2008-11-27T00:35:50Z")
> [@glee](#): > > Think of a credit card as like a hole-in-the-wall cashpoint. It’s just there so you don’t have to carry cash. > **But you don’t spend it if you haven’t got it.** This is why I only have a debit card. It gives me the convenience of not having to carry cash, without any illusion about where the money is coming from. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [November 27, 2008, 12:46am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/27 "2008-11-27T00:46:34Z")
> [@Mangetout](#): > > This is why I only have a debit card. It gives me the convenience of not having to carry cash, without any illusion about where the money is coming from. But I read, and hear, about debit cards having no protection in case of fraud. Credit cards do. By the way, I don’t like the way most card readers have no means to shield your PIN when you enter it. I use my other, but that’s a little awkward, and may be kinda insulting to the clerk. ---
**Author:** ![ming\_the\_merciless](https://avatars.discourse-cdn.com/v4/letter/m/58956e/32.png) [@ming\_the\_merciless](https://boards.straightdope.com/u/ming_the_merciless)\ **Post date:** [November 27, 2008, 12:47am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/28 "2008-11-27T00:47:41Z")
> [@glee](#): > > When I was a kid, I saved my pocket money for 4 months to buy a toy I wanted. > > Now I have a £10,000 ($20,000) limit on my credit card. 🆒 > Since I pay it off each month, I have never got into any financial trouble. > Nor have I paid the credit company any interest. Ever. > > Think of a credit card as like a hole-in-the-wall cashpoint. It’s just there so you don’t have to carry cash. > **But you don’t spend it if you haven’t got it.** i was exactly the same as you glee £10000 limit always paid off each month only ever dealt with “reputable companys”, then one day a letter arrived from the bank asking to urgently get in touch as they belived there had been a fraudulent transaction, …oh yes over £8500 of fraud its taken the best part of five months to sort out (hopefully) now i have set a £1000 limit on my new card and if i require anymore i go to the bank. cards are an handy thing but in my opinion anyone who uses them as a source of additional income is going to get burned at some point. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [November 27, 2008, 12:55am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/29 "2008-11-27T00:55:47Z")
I think I may have accidently “whooshed” some of you. I never expected, or even thought about, anyone taking that “second income” thing literally. :dubious: ---
**Author:** ![Quasimodal](https://avatars.discourse-cdn.com/v4/letter/q/57b2e6/32.png) [@Quasimodal](https://boards.straightdope.com/u/Quasimodal)\ **Post date:** [November 27, 2008, 12:57am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/30 "2008-11-27T00:57:29Z")
Does anyone here use their credit card exclusively (but responsibly) just to build a better rating or to accumulate reward points? I always pay my card at the end of the month, but I like to use it alot so I get travel points. ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [November 27, 2008, 1:04am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/31 "2008-11-27T01:04:55Z")
> [@Quasimodal](#): > > Does anyone here use their credit card exclusively (but responsibly) just to build a better rating or to accumulate reward points? I always pay my card at the end of the month, but I like to use it alot so I get travel points. My post addresses this, sort of. I use it for the cash back (but not exclusively–the accounting aspect of it is helpful when I’m going over receipts at the end of the year figuring out if I’m missing any business expense receipts). I literally put everything I can on the credit card. Like I said, free money as long as you pay it off. Plus it builds your credit rating. ---
**Author:** ![Manduck](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/manduck/32/256_2.png) [@Manduck](https://boards.straightdope.com/u/Manduck)\ **Post date:** [November 27, 2008, 1:46am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/32 "2008-11-27T01:46:18Z")
> [@eleanorigby](#): > > I now use only cash to pay for stuff like Christmas presents etc, but I have to ask: what do you all do for high end repairs? My mechanic no longer takes personal checks and I just had to pay $512 for some major brake work. It went on credit, of course. I hope to pay it all off at the end of the month, but seriously, what do you all do for stuff like that? Furnace repair, plumbing etc? Sometimes you have to use credit. You should keep a savings account that contains money for emergencies like this. Don’t touch that money for anything but an emergency, and top of the fund again as quickly as possible when you do dip into it. You usually see 3 months living expenses as the recommended size for this fund, but I like to keep it a bit larger than that. Those repair expenses are unpredictable in the sense that you can’t know what will need to be repaired and when, but they are predictable in the sense that you know you will need to repair something sometime, so you can plan for it the same way as you plan for christmas. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [November 27, 2008, 2:01am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/33 "2008-11-27T02:01:48Z")
> [@Manduck](#): > > You should keep a savings account that contains money for emergencies like this. Don’t touch that money for anything but an emergency, and top of the fund again as quickly as possible when you do dip into it. You usually see 3 months living expenses as the recommended size for this fund, but I like to keep it a bit larger than that. > > Those repair expenses are unpredictable in the sense that you can’t know what will need to be repaired and when, but they are predictable in the sense that you know you will need to repair something sometime, so you can plan for it the same way as you plan for christmas. How is this different than having a credit card with a limit close to those three months living expenses, and not using it except for emercencies? A savings account does draw interest, but that interest is always poor. Savings accounts are safe, but about as lousy an investment as you can get. ---
**Author:** ![control-z](https://avatars.discourse-cdn.com/v4/letter/c/eada6e/32.png) [@control-z](https://boards.straightdope.com/u/control-z)\ **Post date:** [November 27, 2008, 3:36am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/34 "2008-11-27T03:36:52Z")
> [@mangeorge](#): > > How is this different than having a credit card with a limit close to those three months living expenses, and not using it except for emercencies? A savings account does draw interest, but that interest is always poor. Savings accounts are safe, but about as lousy an investment as you can get. Well it’s different because a savings account does make a little money, especially if you really do have 3 months living expenses in there (maybe $7500 or more for many households.) And a savings account will never cost you money just for taking money out of it (unless you go below whatever the minimum balance is.) ---
**Author:** ![Manduck](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/manduck/32/256_2.png) [@Manduck](https://boards.straightdope.com/u/Manduck)\ **Post date:** [November 27, 2008, 3:39am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/35 "2008-11-27T03:39:58Z")
> [@mangeorge](#): > > How is this different than having a credit card with a limit close to those three months living expenses, and not using it except for emercencies? A savings account does draw interest, but that interest is always poor. Savings accounts are safe, but about as lousy an investment as you can get. What if you have a BIG emergency that costs you most or all of that fund? Now you have a whopping credit card bill to pay off and no reserves at all. And if you can’t pay it all off within the month you will be paying interest at crippling credit card rates. ETA: Forgot to add that safety is the prime consideration for an emergency fund. This is not an investment, this is your safety net. ---
**Author:** ![rocking\_chair](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rocking_chair/32/2918_2.png) [@rocking\_chair](https://boards.straightdope.com/u/rocking_chair)\ **Post date:** [November 27, 2008, 4:17am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/36 "2008-11-27T04:17:33Z")
> [@mangeorge](#): > > Don’t many hotels require a credit card for booking? debit card works for that. or you can get a prepaid visa or amex. i have a separate checking account in a bank for debit card purchases only. a checking account i can only write checks on in a credit union. i’m not good at basic math and this works to keep me from bouncing. it also stops me from using vital funds for books, or other more fun things than utilities. i just put xx amount into the debit account and that is all i can spend. if i go on vacation, or out on the town, i have a specific amount to use and it someone gets hold of my card they won’t go very far or mess up my household accounts. ---
**Author:** ![Chez\_Guevara](https://avatars.discourse-cdn.com/v4/letter/c/aeb1de/32.png) [@Chez\_Guevara](https://boards.straightdope.com/u/Chez_Guevara)\ **Post date:** [November 27, 2008, 4:20am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/37 "2008-11-27T04:20:44Z")
> [@mangeorge](#): > > But I read, and hear, about debit cards having no protection in case of fraud. Credit cards do. It depends who issues the card. If **Mangetout** , a UK citizen, has a Maestro debit card then what you have heard is correct. However, about 70% of UK debit cards are issued by Visa. These cards afford much greater protection, although not quite as much as that offered by credit cards. A credit card purchase is protected in law, whereas a Visa debit card transaction is protected by the the Visa Debit Chargeback system. The latter is a compliance scheme which, as such, is not legally binding. ---
**Author:** ![Desert\_Nomad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/desert_nomad/32/177_2.png) [@Desert\_Nomad](https://boards.straightdope.com/u/Desert_Nomad)\ **Post date:** [November 27, 2008, 4:57am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/38 "2008-11-27T04:57:15Z")
> [@eleanorigby](#): > > I just had to pay $512 for some major brake work. It went on credit, of course. I hope to pay it all off at the end of the month, but seriously, what do you all do for stuff like that? I use credit for almost everything and pay it off every month (except once when Providian Bank notified me a few days before an extended overseas trip that if I did not have $1000 carried over to the next month, they were going to cancel the card). I paid one month’s interest on the refundable airline ticket I bought to keep the card active and I canceled the card as soon as I returned. I now keep a strong savings equal to or greater than a year’s living expenses. It took a long time to build, but I live cheaply… no TV, no car (though I will need to buy a car soon as I am spending more time in the land of no public transport… USA). I’ll finance if they give me 0 to 3% as I can earn more elsewhere. ---
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [November 27, 2008, 5:20am UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/39 "2008-11-27T05:20:29Z")
> [@Quasimodal](#): > > Does anyone here use their credit card exclusively (but responsibly) just to build a better rating or to accumulate reward points? I always pay my card at the end of the month, but I like to use it alot so I get travel points. More or less. I use my credit card as a 30 day same as cash. If I do not pay off my cards each month I quit using them. With each statement I check the charges, and see where they fit in budget. And I keep a running total for the month on what I have spent. I have different catigories, gas, food, gifts, budget, etc. Each year I set up a spread sheet with my expences and income. And through out the year I make sure I am not spending over budget. ---
**Author:** ![Mangetout](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mangetout/32/19_2.png) [@Mangetout](https://boards.straightdope.com/u/Mangetout)\ **Post date:** [November 27, 2008, 9:00pm UTC](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579/40 "2008-11-27T21:00:58Z")
> [@mangeorge](#): > > But I read, and hear, about debit cards having no protection in case of fraud. Credit cards do. Mine’s a Visa (Delta) debit card and does incorporate a certain level of fraud protection as standard (we had an incident a few years back where someone cloned my wife’s card and spent £600 on it - we got it back without much fuss). but I also have an upgrade on the account to which it is attached - I pay a monthly fee and get a whole list of benefits - including: -Card protection (covers loss or misuse of cards issued by the bank, and any others, also replacement cost of lost passports, driver’s licences) -Automatic multi-trip travel insurance -Mobile phone insurance -Extended warranty on electrical goods -Interest-free overdraft -Comprehensive identity theft support -Full roadside breakdown cover -A legal advice helpline and free will-writing service (the cost is about the same as just the roadside breakdown cover, if I bought that direct from the provider) > [@](#): > > By the way, I don’t like the way most card readers have no means to shield your PIN when you enter it. I use my other, but that’s a little awkward, and may be kinda insulting to the clerk. I flip open my wallet and use that to shield the keypad - I’ve never noticed anyone being offended by my doing so - if anyone _was_ offended by this privacy measure that is recommended by all the banks, they deserve to be. [Previous page](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579.md?page=1) [Next page](https://boards.straightdope.com/t/my-credit-cards-a-second-income/474579.md?page=3)