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Mastercard Shocker!

Discussion in 'Money Management' started by Johny_come_lately, 2nd Jun, 2010.

  1. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    Hi,

    Five years ago I swapped to the cheapest card available, then slowly payed my whole debt off. I have rarely used it since.

    May's statement has come in......and the cash advance= 21.49%!!!!!!:eek:
    If this is for a cheap card, what is the 'premium' cards rates?

    Credit cards are a path to self destruction, mass extinction and fire pits of hell. They put off expenses that you can't afford now, to later when you still can't afford them. Once you are caught in the credit trap it hard to break free. :mad:

    nuff said



    Johny.
     
  2. Vagon

    Vagon Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    56
    Location:
    Sydney
    I don't believe thats a universal phenomena, its only if as you say you "put off expenses you cant afford". If you stick to your current lifestyle they will work in your favour.

    I have a credit card, I haven't paid interest once, but I do pay a comparitively substantial annual fee.

    I get the fairly average 55 days interest free and use it to pay for as many things as possible without using it in situations where it incurs a 3% charge or some such nonsense. The money I would have paid off stays in the offset account.

    The benefits are:
    - A small offset of interest from my PPOR
    - Travel insurance (which is why I'm happy to pay the fee)
    - Rewards points
    - My expenses are easily tabulated for me so I can stay on budget.
     
  3. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    Hi Vagon

    I have a lot of friends that are low income/welfare dependant. I know one person who had a limit of over $6000 maxed out. I know of another person who had 15 store/credit cards. I have a friend who lost his job and needed cash to survive. If seems to me, if you can afford a credit card you don't need one, and if you need a credit card you can't afford one.

    If you borrow to your limit, payments towards high interest and not reducing debt, create a lingering, revolving loan.

    Most cardholders have a couple of thosand owing. Its when emergencies happen that the cards are abused. Car maintenance/ dental work/ faulty toilet/ sick kid ect... all strike when you least expect.

    If you have a low income, saving is better than credit. Having a budget and living below your means, is better than credit.





    Johny.
     
  4. Vagon

    Vagon Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    56
    Location:
    Sydney

    With you 100% there. If you have your buffer for emergencies in place and you can stick to a budget, then credit cards will work for you - otherwise its some of the worst debt possible.
     
  5. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    If you had cashed out $7000 on your card, you would need to pay $1500 in interest every year. In 4.7 years the interest would equal the borrowed $7000.

    The banks have got it good!




    Johny.
     
  6. realestate_basket

    realestate_basket Member

    Joined:
    11th May, 2010
    Posts:
    12
    Location:
    Sydney, Australia
    Same here, I never need to cash advance my credit card. I'm with American Express which offers free annual fee for APESMA members. I use it for convenience, and make sure I repay the money before the interest free period ends.
     
  7. Vagon

    Vagon Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    56
    Location:
    Sydney
    They're not non-for-profits so the bank bashing is a bit silly.

    Its hard to have sympathy for a person if they spend $7000 on consumer goods (which would probably be retail financed if the banks didn't offer CCs anyhow). Sure medical costs are a little different, but how many people are actually putting medical costs of that amount on a credit card?

    No one forces anybody to have a credit card and banks provide a number of loans that are more suitable to a loan term of 5 years (or I suppose 4 if you compound).