This week: Credit Card Hell

We all know that it is wisest to use credit cards only as a convenience and to pay the entire balance off each month. It is all too easy, however, to see those little pieces of plastic as extensions to our income, a way of living beyond our means. What about you? Do you pay your bill in full each month, or are you stranded in interest hell?

Read what others said.

See what Tripod members had to say about frugal finesse in the last survey. For other past survey results, check our survey archive.

A new Work & Money survey is published each Wednesday.

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ralphb: Credit cards can be useful, in that they can provide you with a 2-to-6 week "float" between the time you buy something and the time you pay for it. It's also a lot more convenient than paying cash. You only have to remember not to buy something you don't have the cash to pay for -- think of plastic as a portable ATM. I have always paid off evey month, and I only use no-fee cards. In fact, the Discover card I carry paid me back over $300 last year.

Etain: No ATM card. I had one once and I used it. No cash, either; I had that once and I spent it, too. In fact, the first led to the second and I found that after I got rid of the ATM card (not to mention all those evil little charges they put on your account for having used it at one of the Competitor's Machines), the amount of money I was spending had dipped unbelievably. As for credit cards -- I tend not to take any of them with me, and when I actually find something I want, I'll have to want it badly enough to make a second trip and get it. If the desire outweighs the inconvenience, why not?

MStory: My biggest deterrant from purchasing anything that I don't need is the fact that I have to go home and enter the information on my Quicken system. I know exactly how much in debt I am at any time, which I hate, and there is no way of escaping the truth that stares at me from my monitor screen.

jtb: Don't use credit cards. That was personally very hard for me to get used to -- but I find it much more gratifying to have control over where my money goes each month, as opposed to wasting it on credit card bills and finance charges. If I had all the money that I paid out in finanace charges over the years, I could have made a down payment on a house.

SATISHKRIS: I was a person whose urge to aquire things was so strong that I used to sometimes take loans to aquire them (in India, people really only started using credit cards a year back or so). My first victory over this urge was in curbing my temptation to have credit cards. Slowly I have learned to control myself and curb this urge a great deal and save a substantial amount in my account. What I really found out was that it doesn't make much of a difference in your life to acquire things all the time when you can as well do without them.

hcm: Not using credit cards is simply impractical for some folks; you can't entertain clients without them (unless you want to carry huge wads of cash with you).

I use my American Express card: I use the card benefits (so no whining about the annual fee, folks; it's not everyday you can find people who will cash a personal check for you outside the U.S.), so the annual fee is definitely worth it.

I know that my amex balance is due in full every month, so I know not to spend more than I will have in hand in the next thirty days. I also eat at home (what a novel idea ... I love to eat out, but eating at home means spending less, once you have sufficient cooking implements).

With all the money I save I can travel abroad several times a year. Nice, eh?

Ravurzrool: Many people warned me about credit cards prior to my 18th birthday, and when I received my first credit card I was careful not to spend it on luxuries. But...there WERE times when I just HAD to get this or that, and before you know it the number of purchases that I made was escalating. Then I would get the sudden urge to get more cards when I got near the credit limit, which perpetuated the cycle. I am glad I looked at the situation I was getting into after maxing 3 credit cards, because I finally realized that I had to eventually pay these back someday. I had a total debt of $2500, and as a freshman student, I realized that I was getting out of control.

StephenP: I'm paying my credit card debt down instead of saving. Also, I have a card that gives me cash back on my phone bill (through Bell Atlantic). So I make responsible purchases... groceries, gas, etc., and then pay the bill of in full.

RMM2323: I'm 25 years old and deep in debt! About $20,000 in debt. It sucks!

Nicole_S: I applied for a credit card just to see if they would give one to an unemployed student. I got it and I am always careful not to go over the limit. My credit card has helped me though. I got a personal loan because of my good credit rating, and at the age of 19 I own a $13,000 car which I paid for all by myself -- even though I am still at school.

marybeth: Credit cards offer the best exchange rate when traveling, so I use them and vow to pay off the balance within 3 months upon returning. Hey, if you can't splurge a little while traveling, what's the point? And, will that must-have item really be there when and if you get back some day??

MalcolmH: I've spent the last 6 years paying off my credit cards. I've got about $1500 to go and then the only debt I'll have is my Mortage. Being free of that credit card debt has been a goal for a long time. But my advice is to avoid going through the credit hell I've been through. Just Don't Use It!

jbauernfeind: I depend on credit cards for world travel. Unfortunatly, not paying them off due to one family crisis or another has left me far behind the eight ball. I've managed to be credit card debt free twice in my life and I am now working on a third!

ttrimble: Four years ago I was $5000 in debt, mostly from credit cards. I paid off the last of this debt this spring and now, on the rare occasions when I do use a credit card (mostly for major purchases I want buyer protection on), I pay it off in full by the due date. My only debt now is my student loans, and I'm working on saving half my income over the next two years.

davidredman: I try to keep my balance paid off, but it seems to creep up during summer vacation and at Christmas time (I'm a teacher). I am a credit card company switcher, meaning about once every six months I change credit card companies so that I can get the lowest interest rate. There is a great web site for credit shopping -- I highly recommend it.

AnnMarieClark: I started down the road of charging every little thing. I got myself pretty deep into debt. Getting out of debt is my number-one financial priority now. I got rid of all the cards, and got a consolidated arrangement to pay the cards off. I have an ATM card that I can use like a credit card (it actually has a VISA account number), so I don't have to carry cash and I don't have an outstanding balance. I miss not being able to just buy whatever I want, but I know I'll be glad later that my debt is shrinking, not piling up!

Colfax: I managed to get my kids raised and through college without credit cards. I managed to travel around most of the US and some of Europe without them. But in this day and age, credit is almost our certificate of citizenship -- one cannot pay by check or borrow a book from the library without a card as identification. My wife and I have a Visa that only comes out of the house on trips, and then we have a Debit card Visa that we use as a check and for identification. We have managed to pay the credit card in full each time we have used it. I agree with the people who say if you want it bad enough to go home and get your card, then the control is worth it.

mife: There are two kinds of people in the world -- those who pay interest and those who earn interest. As far as credit cards are concerned, I pay off my balance each month. I just use my credit card instead of writing checks and then only have to use one check to pay the credit card bill.

InTempo: This depends on how good you are at managing money and responsibility to pay before your due date. In my case, I have been trying to be credit card free since I got married. But my husband thinks cards are a great help, and credit helps us cover most of our expenses. But I see it as a big monster eating up our last penny and leaving us with nothing, since half of what we make pay in credit cards. I don't think it's a wise thing to use all the time, but maybe for an emergency or travel and only using what you can confortably pay later. I personally broke my credit card in four and don't use one any more. I think that people should only buy what they can afford and pay it in cash, this applies to everyday use and spending. The thing is that banks and other places ask for a credit card reference in order to give you credit.

jandrey: About a year after I had dropped out of college, I got a pre-approved student credit card application from the school I used to attend. For some reason, they still assumed I was attending school. Anyways, I was short on cash so I sent it in. I really didnt think I would get the card, but two weeks later there was a card sitting in my mailbox. Not only did I get a student credit card for a school I am not enrolled in, but at that time, I was also unemployed!! I think the credit card companies need to stop sending so many unsolicited credit cards without doing the proper screening.

mokummer: The only reason I have a credit card is to save money. I pay mine of every month, get a 2% rebate from the card company, and my money in the bank returns interest at 3.5% per annum.

stvndit: Credit cards... why not? Don't blame it on them, it is the user's discipline that makes them work or not work. What would you say to the future trend of "electronic cash" or "Web purchases" ? Do your calculations right and you will stay out of trouble.

Rpoole: Ahhhh, yes...the credit card hell. Two years back, the kids and I went to sunny Florida.....and...well, 1200 bucks later I was broke with nothing but the plastic. To keep it simple, I'm still paying the thing off!!

mcfeisty: No credit cards, due to excessive college debt... Bad credit, in other words. Cards would be handy, but my boyfriend is carrying several balances totalling around $5000, at 22, and I don't think I'd like that situation any better.

donnae: I pay off my credit card balance every month. If they start charging me for that, they can keep their credit cards!

radioed: Although we currently are "in deep" on our plastic, credit cards have come in handy for emergencies. Last year when my daughter was dying in Florida, my wife and I couldn't have been able to go there from here in Vermont to be by her side if it hadn't been for our Visa! I am glad that I am deep in debt rather than being sorry that I couldn't be by my daughter's side at that time.

rmbrowne: Having a credit card is like turning 21 years old. Everyone has to get drunk and sick once -- and they all learn the hard way. Of course with some people, it takes more than once. Credit cards are needed, everyone needs a credit history to buy a new home or get a new car at the going interest rate. If you have made the mistake of burning up too much money, grab yourself by both cheeks of your a-- and get yourself back to normal. A lesson learned the hard way is never forgotten. I know I was there a long time ago -- I am still a young 53.

dichiara: Credit cards are a way to gain instant gratification for things you THINK you deserve. We feel like we owe ourselves something so we go out and purchase STUFF with money we do NOT have just so we can feel like we have gained some social status in life. Actually what we have done is to lie to ourselves and our friends by getting STUFF we really can't afford, then we end up owing everything we earn just to pay the interest on the credit card debt. Ever look at the finance charges on your bill? Take a look next time -- I am willing to wager that the amount you pay monthly is barely enough to cover the finance charge. PAY CASH, and if you can't pay cash, WAIT till you can. I KNOW, I HAVE BEEN THERE...... If you ever get the chance to listen to Dave Ramsey on the radio, he has a program called " The Money Game " which originates from Nashville Tennessee. He will tell you all the woes of extending yourself with Credit Cards........

Smileyface: Credit cards are instruments of evil to a student like myself... each student grant allowance I receive goes to paying the thing off!

M.S.: Only rarely do we "let our cards ride." My daddy didn't raise no fool! Anyone who succumbs to this insidious, evil plot (i.e. card companies sucking $$$ at exorbitant interests rates) has something horribly wrong with him/her. Pay your balance or cut up your card!!!

KMorrison: I use credit cards, but I like to think I use them wisely, as I do pay off the balance every month. I admit to popping a $50 fee for the Citibank AAdvantage card for the frequent flyer miles, but I am flying to Hawaii next year for free with the miles. That's worth $50 to me....

RCalvert: I think credit cards are great if you use them correctly -- which I didn't do! After obtaining $9000+ in debts, I find myself constantly depressed when I receive those "Your interest paid for 1995 was $$$$". Oh well, I guess I'm a good solid American -- solidly in debt that is!

Style: When I was in school in Arizona, I didn't need a credit card for convenience. My ATM card could be used as a credit card (meaning I could use it in restauraunts, catalog orders, etc.), but the money came right out of my checking account. I live in California now and my bank doesn't offer that service. I've gotten pretty good at not using my Visa for splurges, so when I do use it, my balances are small enough to pay off quickly.

SusanJones: I like ralphb's idea the best. I, too, use my Discover card almost exclusively and pay it off in full each month. I also get the year-end cash return. However, I avoid use of my credit card so much, that I get a minimal amount back at year end. I think I'll probably change my ways now, and start using the card much more often, continuing to pay in full each month, and maybe getting a lot more back on that year-end cash return!!! Imagine getting paid $300 or more a year from a credit card company just to use their card!!.... I'm in!!!!

Jennabug: I have a debit card and it has gotten me in more trouble than any credit card. I can never remember to deduct the money out of my check book, so I bounce checks left and right!! My only problem with credit cards is when they are maxed and I skip a payment, I have an overdue payment added on which gives me a fee for over-charging. So it comes out to $36 a month ($18 fees) that do not effect my real debt at all!

MDARNTON: I only have two credit cards: one with a $500 limit and one with a $1000 limit. Since I am still a student, my mom has agreed to pay my $500 card only if all of my purchases are directy related to school (mostly books). The other one I have to pay off, and I only charge gas for my gigantic car.

alicat: Credit cards are not all bad; they can be used judiciously to improve your credit rating. My recommendation? Get an Amex and *pay it off at the end of every month*. Since there is no grace period, you cannot justify letting any debt ride or spending beyond your means. I know that when I pull out that green plastic I am committing money in my bank account, not in my future.

If you cannot see a card as anything but an indefinite loan, then stay as far away from credit cards as possible. If you have the self-control (and control over your circumstances) to use it as you would your checkbook, then it may be worthwhile to have a credit card.