Crazy Things People Have Done With Credit Cards
Don’t Use Your Credit Cards for This
In my line of work, I come across more than a few interesting stories. Many of those stories involve crazy things people have done with their credit cards – things they regretted doing later on. Want to avoid some outrageous mistakes? Don’t use your credit cards for the following.
Using a Cash Advance For a Down Payment
Yes, people actually do this. If they want to make a large purchase, such as a home or a car, and they don’t have enough of a down payment, they sometimes take out a cash advance against their credit card so they can get the funds. Big mistake. You’d be better off borrowing your down payment from a loan shark.
Purchasing a Car
Yes, you read right. While some have used credit cards to take out a cash advance for a down payment on a car, others have gone and used their credit card to buy the car outright. I once talked with a person who had purchased a car using their credit card. Do you think it was because the credit card had a great interest rate? No. It was because she didn’t want to “wait” for a loan approval to go through. So while she could have gotten a decent interest rate had she used half her mind, she is now paying almost twenty-percent interest to pay off that credit card debt.
Going On a Spending Spree
You had a bad day and you want to pamper yourself. Do it in a way you can afford to. Some people have been known to take their cards and max them out on “pity gifts” putting themselves into debt and causing even more strife in their already complicated lives.
Eating Fast Food
Yes, it’s convenient. No, it’s not always smart. If you carry a balance on your credit card, do NOT use it to buy a meal at your local fast food joint. I can’t think of anything worse than paying ten-percent interest on a burger and fries.
Comments
Seems like good advice. But what if I have the cash in hand to pay off the credit card bill as soon as it comes. If my card gives a 1-2% cash back bonus, on a $20,000 car, I can get back $200 after my best deal on the car.
Posted by: Stu Raben | August 9, 2006 10:23 AM
For people who consistantly have the cash to pay their credit card balance each month, then buying a car or anything with plastic makes good sense, especially if you have some kind of reward or cashback card. Cash advances are never a good idea since you are paying interest from the date of advance. I carry very little cash and use a credit card whenever possible.
Posted by: haldane turriff | August 9, 2006 12:42 PM
Just wondering... Is it really such a bad thing, on the contrary to the above, to purchase a car on your credit card if you are able (and intend) to pay it off in full at the end of the month? If you have a cash-back card or frequent flier miles card, you could accrue a large number of miles/points/dollars.
Posted by: www.Auction-Misspellings.com | August 9, 2006 5:36 PM
Nice website.
Perhaps you could create a clearing list where people could post the names of the scams they have been taken by to hopefully save others from the same faight.
Posted by: Robert Eric Anderson | August 14, 2006 7:50 AM