Why do we (people) use Credit Cards as there is no such thing as a free lunch?

BackOnTrack

Credit cards can be very handy for unexpected expenses. They also help with car rental and booking hotel rooms, especially as the cost can take up available balance if you use a debit card.

BugsyBrowne

StephenM wrote: »

Thanks for paying for my lunch then.

No worries mate, I still think you should get a free watch for your ability not to pay a penny in interest for 30 years or even a cake, I bet you read all the while as well, just to get off paying for a t.v license:p

seafarers_wife

I get point/cash back when I use it

for me its so much easier to put everything on the credit card and pay it in full at the end of the month than move the money between various accounts. we play the card company game so have never paid interest on oh's credit card, whereas mine is in the process of being paid off from when i was younger and reckless and saw it as free money. mine doesnt get used anymore and i use oh's instead

dzug1

It helps me manage my money/cash flow better

StephenM wrote: »

Yes, shops factor credit card handling fees into their prices. But in the vast majority of cases, everyone pays the same regardless of whether they pay by credit card or not.

True - but there's an argument that says if there were no credit cards shop prices would be lower as retailer's costs would be lower. If you accept that argument (and it is rather a theoretical one and impossible to prove/disprove) then everyone IS paying more than they need.

Soubrette

dzug1 wrote: »

True - but there's an argument that says if there were no credit cards shop prices would be lower as retailer's costs would be lower. If you accept that argument (and it is rather a theoretical one and impossible to prove/disprove) then everyone IS paying more than they need.

I think it's more likely that the law of supply and demand prevails. We no longer pay a cost + set profit margin price on any good - we pay a cost plus as much profit as possible.

There is a price that the market will bear and the seller tries to reach that price.

If something becomes cheaper and the seller can get away with it, the price will remain the same and profit will increase.

I think the best you can say is that there is more manoevrablility if the seller wishes to reduce the price for some reason, rather than the argument that prices will automatically reduce.

welshbookworm

It helps me manage my money/cash flow better

In 9 years of having a credit card I have only had 1 late payment (my own fault) and I find it easier than carrying money around with me which I would be more likely to fritter away on silly things like coffee and newspapers. Also my children can't borrow money off me as I haven't any cash

StephenM_2

star-fire wrote: »

No worries mate, I still think you should get a free watch for your ability not to pay a penny in interest for 30 years or even a cake, I bet you read all the while as well, just to get off paying for a t.v license:p

I've got the full Sky package. Better to spend my money on something I want rather than credit card interest.

izools

It helps me manage my money/cash flow better

How about don't pay interest and while your at it be paid (cashback) for giving yourself extra purchase protection?

Evilm

I can play the Credit Card Co at the money game [use their money whilst I get % on my money]

How about the fact that when I get hit by an unscrupulous person who takes my details I don't get my money wiped out? A friend who has to used debit just had this happen to her and its far more difficult to deal with than when we had one of our credit cards got hit.

Also I can have a short bank statement as all my spending goes through in one hit once a month rather than individually.

Edited to add: because said friend didn't have credit cards they were stuck completely until the bank sorted it out - which can take up to 21 days.

MrsManda

It helps me manage my money/cash flow better

Better protection than using cash/debit cards
Easier to monitor spending than using cash
Cashback on spending
Greater protection/cashback when buying things online
Improved credit history

Almost everything I buy, I pay for on a credit card for precisely the reasons above. I don't spend what I don't have available in the bank and pay the full balance at the end of each month.