<p>To start, I’ve done some traveling this summer and really enjoyed my experiences. Naturally, this experience has led me to want to do more traveling in the future, and I’ve thought further about how to finance these travels. One such idea has been to start financing my day to day purchases with a credit card in order to reap the ‘rewards’. However, the credit card rewards/miles seem more like a gimmick to entice people to go into debt than actual rewards. Without doing further research, it seems like it would almost be better to start a mutual or fund or something with the sole intention of financing travel (primarily plane tickets).</p>
<p>My parents are big disciples of Dave Ramsey, who is extremely anti-credit cards. That’s all well and good, but I don’t understand how you can finance something such as a house with no credit history. Can someone enlighten me?</p>
<p>I will graduate college in a year with no debt of any kind thanks in large part to my parents foresight to invest money for me when they were younger. Through a long history of internships and jobs, I have also invested a little of my own and have developed a large amount of savings as well (large in comparison to other people my age). I’ve lived pretty independently for the last three years, so I know I would be responsible with a credit card, but I don’t want to do it just for the sake of doing it. I’m going to be a senior this year; is this the right time to get my first credit card or would you all advise against it? I know my parents would object if they knew I had plans to get a credit card, but I think they trust me to make my own decisions as well.</p>
<p>As you can tell, I’m quite confused and would appreciate any help or personal anecdotes.</p>
<p>If you plan to travel you pretty much need a credit card in order to book and pay for hotels, rental cars, flights, emergency situations. Given that, you’ll have a CC anyway.</p>
<p>There’s nothing evil about CCs. They can provide a lot of utility and are fine for the person self-disciplined enough not to abuse them.</p>
<p>The ‘rewards’ type of cars are good and not a gimmick. Check into a Costco CC that pffers cash back that you can then use for whatever you want - not just airline miles.</p>
<p>However, a CC isn’t a way to ‘finance’ anything unless you mean simply through the use of the ‘rewards’. If that’s what you mean then it can be done but you usually have to spend quite a bit of money on them to get much out of them and flying/travelling is expensive so you need to have another way to realistically finance your travel. </p>
<p>When you get the CC just make sure that you always pay off the full balance every month or you’ll get hit with the ridiculously high interest rates.</p>
<p>Completely agree with #2. It will make some things in life much easier if you have a major credit card, such as travel.</p>
<p>Remember, too, when you have a credit card, you can use it as a guarantee on some purchases, meaning if you buy a faulty product and the store refuses to refund your money, you can complain to the credit card company and they can refuse payment to the store.</p>
<p>Also, if you don’t own an automobile and need to rent a car, you can decline the rental car insurance that they pressure you to purchase because you have coverage through your credit card company (I think there’s an exception in about three or four countries throughout the world).</p>
<p>I think the idea of using credit cards to get the rewards is ok as long as you have the discipline to spend no more than you would if you were paying cash. I know if I go into the grocery store with $20 cash, I watch what I am spending and count up every penny to make sure I have enough to pay. When I go in with a credit card, I just pick up stuff randomly. I know I spend more because I don’t watch closely.</p>
<p>I have a credit card that gets airline miles. They vary enormously as to how many points you need to buy a ticket. We did benefit enormously from the card for a while. But it was when my in-laws were alive and in a nursing home and they would let us charge the nursing home fees every now and then and give us the money to pay it. We earned enough points to buy 3 free tickets to go home over a 3 year period to see my own Mum in England. But those were huge charges, much higher than our own normal expenses. And then the nursing home stopped taking credit cards (or charged a high enough fee that it outweighed the benefit of using it). I have the same card still, but it will take me years to get to enough points to buy another ticket.</p>
<p>If someone charges a fee to use the credit card (a lot of colleges do), then that cost is usually more expensive than the points you will earn.</p>
<p>If you don’t pay it off religiously every month, it will cost more in interest than the points you earn.</p>
<p>I saw something recently to the effect that it costs every consumer about $500 per year for credit cards – and that’s whether you use them or not. As a merchant, I have to build in the credit card fees, but as the consumer you don’t see that. Debit cards have been very expensive up until now – they are absolutely NOT free to the merchant.</p>
<p>I do very well in the rewards on my own credit cards – I use the card to pay for merchandise for my shop, then pay off the card every month, so no interest. Then – all those rewards points go to pay for my business travel to trade shows every fall, where I will spend even <em>more</em> money!</p>
<p>I’ve traveled before and had no problems using my debit card just as you would use a credit card. In fact, I use my debit card extensively and have never had any problems.</p>
<p>Using the term ‘finance’ my travel was a bad choice of words. I basically just want to know if I can get a plane ticket or ~$500 credit every year or so. I know it depends on how much you spend, but what are the general rules?</p>
<p>Is the credit card bill like any other where I can just set it up to automatically deduct from my bank account every month? That seems like a logical thing to do, but I can also see the credit card companies not allowing this to screw over their customers even more. I’ve got the money in my bank account to pay for whatever I would charge every month, so that wouldn’t be a problem.</p>
<p>So specifically what card would you all recommend? Seems like there are a lot of options.</p>
<p>I hear you on the travel thing. Every time I pay my son’s tuition bill with a CC I am getting him a free ticket home. As long as there is no financial incentive (ie, a cash discount) for using cash or writing a check, or a fee for using a cc, the cash payers and the businesses are subsidizing our use of credit cards. </p>
<p>The key, as mentioned above is DISCIPLINE, both to pay off your balance in full every month and to not use it for unnecessary purchases. </p>
<p>The other extreme are the mileage junkies who find creative ways to use their credit cards to accrue airline miles. An interesting piece on public radio about people who bought $gazillion of dollar coins from the mint, paid for the coins at face value by credit card, then took the coins to the bank and turned them in!! All to accrue airline miles. The mint made it easy to buy the coins because they were trying to get the public to use them, and were very encouraged by the volume of sales, but most were just coming right back to the bank!</p>
<p>Credit cards have more consumer protection than debit cards. Your liability with credit cards is $50 ( I think) if stolen. I don’t think there is a limit with debit cards. And yes, you can set up an automatic payment with your bank. I would look for a card with a low yearly fee. We don’t pay anything for our cards but we also don’t accrue miles on them.</p>
<p>We use the Costco AmEx business card that gives us 4% cash back on gas, 3% back on restaurants, 2% on travel and 1% on everything else. It also gives a few other discounts and 90 day loss/theft/breakage protection, extended 1 year warranty, collision damage waiver for rental cars and other protections.</p>
<p>We also use a Charles Schwab Visa that gives us 2% back on all our purchases, which has added up nicely for us. They no longer offer the 2% but Fidelity does have a credit card that does (don’t have it & have no funds there).</p>
<p>I have been charging tuition bills (no cash discount) and nearly everything else. I get significant refund checks or cash credits regularly that I spend on plane tickets and whatever else I choose. It’s a lot easier than keeping track of miles, for me.</p>
<p>It does make it easier to travel if you have a credit card–better accepted by hotels & car rental companies. S got a Gold AmEx because it gives him $$ back & was free for the 1st 2 years, he says.</p>
<p>My credit card companies have been excellent at supporting me if & when I have any disputes with merchants about any charges. I just call the toll-free # & if needed, follow up with a letter challenging whatever charge is in dispute.</p>