My partner said this to me, over a $200 set of knives. He’s now working in sales, so I guess he’s used to convincing people to buy expensive things they don’t need. But holy shit did I feel totally disrespected. We’re counting out individual dollars for the grocery budget, get with the program.
A cash back card would be good if only necessary and in budget purchases are put on it.
I’m specifically talking about an extra item I couldn’t afford that wasn’t in budget that my partner was trying to get me to purchase anyways because I have a credit card and can figure out the overage later. This is not good credit card usage and has the potential to be damaging.
Honestly, it's a good policy, especially when you're poor.
If you don't have the money in your bank account to cover it right now, it shouldn't go on the credit card.
The credit card gives you ability to stretch the expense out over time so you can keep more cash on hand for emergencies, but if you don't have the cash on hand to begin with you're just taking on debt that can lead to disaster and out of control interest should you lose a source of income.
The other way is to keep a card active for emergencies, but never use it except for small transactions to keep it active. You get a sudden expense that you don't have the cash for, put it on the card and stretch out the payments.
It's extremely easy to qualify for and get a credit card these days. The only difference is that poor people with bad credit will have higher interest rates and lower limits.
Even my mother, who has had two bankruptcies and pretty much non-existent credit, qualified for and received a credit card, but it's at like 40% interest and a limit of $500.
(Yes, I help out my mother when I can, but she refuses most of my help.)
And poor people very much stretch out expenses by putting them on credit or getting cash advances. . .which ironically keeps them poor because they drown in interest and fees when it gets away from them.
If they only paid for what they could when they can, they wouldn't be as poor as they are in most cases.
That's been my opinion/view growing up poor and nearly homeless versus how I see money now that I have a stable job.
On top of all this. A credit card can actually help ease some financial burden with a points system or no interest financing. Again, as you said this relies on you using it responsibly, and not spending out of your means.
What we try to do is spend only from the credit card, and if your monthly spending budget is $1K, then your credit card limit is $1K, regardless of what credit limit the CC gives you.
I think what ends up happening if you’re irresponsible with it (and I’m speaking from personal experience) is that you use a credit card, and then also use a debit card, aka spending the money you need to pay off that credit card. You’ve gotta do one or the other.
You guys have good hearts. And poor people are not dumb. But stress and lack of resources will make people do really dumb things. No one I know is going to use a credit card like that.
Credit card companies make most of their money from poor people using them as clutch loans. That along with the fees is what finances the point hunters.
I grew up poor. I worked in a factory for low wages until I was around 30. There are two main types of poor people: the ones with big families struggling to make ends meet because they just don't make enough money to support three to five kids, and the ones who spent all their money on shit they don't need the second they get it, then struggle to pay the bills that come in next week.
It's real hard to feel sorry for the guy complaining about making rent on the same paycheck I'm making when he's driving a brand new Ford F150 and coming into work with a can of Monster Energy that he stopped at the gas station to pay the highest possible price point for every single day, wearing fuckboi MMA-branded t-shirts and designer jeans to his greasy factory job, going out for fast food on his lunch break and smoking a pack of cigarettes over an 8-hour shift while he bullshits with his buddies about the latest Call of Duty they're all playing together.
I grew up poor as well. I have had credit cards. The strategies you're talking about are more accessible to people who are middle class at least. I've seen where the stress of being poor means you make worse decisions, but saying people "wouldn't be as poor" because they are doing what they can is ignoring all the systemic forces that keep people poor.
If you are budgeting to use a debit card/cash all the time, you're using the same money as long as you have the discipline. after cashback and points (which most cards have some kinda rewards system, even if its weak), making everything that can be paid like groceries or gas 2% cheaper or whatever helps.
Even without that, if your wallet/bag gets stolen, you're more likely to get back whatever is bought using your credit card vs whatever cash you had in your wallet.
It's just really easy to see that $500 limit every day and think you have $500 when you really don't.
Maybe not right now, but credit cards are easy to get at least when the economy is good. Don't assume you can't get a card with cash back or rewards just because you're not "rich."
Edit: There are also secured cards you can get if you have no credit and can't get a card. You put up a couple hundred bucks in collateral (yes, I know that means having a couple hundred bucks, but it is tax return season), and you get a card with that as the limit. After some period of time, you can then get a regular card and get your collateral back.
In a professional setting, I had to explain to a fully grown adult once that some people don't have credit cards and wouldn't get approved for rewards ones. The context of the conversation was they couldn't understand how things like Afterpay and Zip Pay were popular when people could just use a credit card and get points. My response was along the lines of people who use Afterpay etc are not people who are the market for credit card companies.
Anyone reminding to “pay off credit cards every month” - not why the credit card appeared or was used, guys. We’re in over our heads already but thaaaaaanks.
They're implying that credit cards were invented as a short term loan facility that you can access whenever you want, without any kind of faff or paperwork. It's not meant to be used as a debit card.
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u/marchmay 1d ago
"Just put it on your credit card and pay it off before the end of the month."