As I'm reading this chapter on credit scores, I realized I have, um, nevercheckedmycreditscore....
I know! So, after some chastising from a coworker I bit the $7.95 bullet and did my report and received positive results. I always pay my bills on time and I pay off my credit card in full each month (my dad taught me that), but I had no idea what to expect and really (still) don't know what all goes into a credit score. Mr. Bissonnette is helping me to figure it out though, as is reading through my report.
Another thing Bissonnette drives home over and over again is how we should use cash and not credit cards. Period. Did you know that most of us think of a spending a dollar on a credit card as only fifty cents? And, did you know that there is a correlation between unhealthiness and impulsiveness in food items and credit card using? I know. Crazy, right? I'm not backing up my claims so that you will go and read up on all this for yourself. I carry a credit card and use it on most of my purchases, but now I'm rethinking that. Bissonnette gets into how much of a scam airline miles and points and all those "rewards" for using your credit card are as well. Carrying a big wad of cash all the time seems impractical and dangerous, though, especially living in a city. Maybe the point is to only bring a little money with you for the every day kind of things?
The book is a bit different than I expected, and a bit outside my usual reading taste (read: has to do with finance), but I am enjoying how it is making me think.
So, tell me, do you know and understand your credit score? Are you a credit card user or a cash carrying kind of person? Have you read Bissonnette's book already?
2 comments:
I grew up thinking credit cards were bad and paying cash-only was good, so if you'd have asked me 5 years ago what I thought about his philosophy, I'd have supported him.
Fast forward to what I consider my adult life.
I was 23, never had a credit card, never spent outside of my means, paid debit (essentially cash) for everything. Banked with a larger, regional bank, but not an mega-bank.
Oh how I wish I had been less afraid of credit and making the big bank work for you.
I had no credit and therefore, ironically, couldn't get a credit card. In order start building credit, I had to get a "secured" credit card that was backed by a cash balance (read: more money I had to lend the bank up front and that I couldn't touch while the credit card was open) and that had a horrible credit limit (read: tiny) and horrible perks (read: low mileage/points earning power).
When I got married, blessed, I inherited my husband's credit and his accrued history with both a small credit union and a large, national bank.
The idea of cash is ok. The reality of cash if flawed.
Consumers! - Know thyself! If you cannot stop buying shoes and cheese puffs on your credit card, give yourself a cash limit and tape the plastic to the inside of your closet (I did that in college as a way to keep myself from reaching for the card).
Its a sad fact that we need credit in this world to get an apartment, a house, a car or a good loan. We need credit cards to build credit and we need to grow up and deal with the root of our money spending issues (are we over spending to prove that we are wealthy/trendy, are we eating our feelings?).
I don't like carrying much cash on me in the city. I think carrying cash on you is an invitation for issue and an outdated solution to an evolving problem.
If you track your spending in Quicken or Mint, you can see each dollar as $1.00 rather than seeing the plastic dollars as $.50. Make lists when you go grocery shopping, stick to budgets when you want to buy shoes, pay your essential bills and tithing first. And use a bank. Use their credit card. Reap the rewards. Cash in your points for more cash (not a crappy toaster or other items). Demand that they eliminate your credit card fees. (Most people shouldn't need to pay credit card fees. I mean, they are using your money when you aren't so they should pay YOU for loaning it to them.) Watch your bill. Go see a rep. if you notice any charge or fee you don't understand. Take ownership for your spending, your money and your bank.
(extend arm, drop the mic)
Whew! What a comment--I think now you need to do a lengthy post or re-post this to your blog. It's all so interesting to consider. I do use Mint but I'm not so good at keeping up with it...maybe I should try harder to look at all the little expenses and see where I'm spending where I don't need to be!
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