Yes, but only if the interest rate the credit card company is charging is less than what you’re earning on that borrowed money. Which, in the real world, normally means you’re paying off your balances each month. 😉
I’ve occasionally carried credit card balances in the past. I’ve become more responsible saving/spending money since then. My credit card balances are now paid off in full each month. Cash-back reward credit cards are used to earn some “free” money.
It usually doesn’t make sense to carry a credit card balance. However, people may experience emergencies during times when their savings are inadequate. Credit cards can be used if they provide the best viable solution. Funding an emergency savings account should be prioritized to avoid this situation in the future!
Sure – true short term emergencies. You need your car to get to work. Your car breaks and you need it repaired but don’t have the cash. Repair the car, keep your job, pay off the credit card immediately by being extremely frugal until its done. Better to carry a balance than loose your job.
Continue being extremely frugal until you have an emergency fund for the next emergency.
Only if you are highly-disciplined. It can serve as an emergency fund, but practically it’s just a bad idea as it will be the gateway drug to over-spending and getting on the wrong side of compounding interest/returns. Why not just hold some cash or use home equity when cash is needed. Heck, even an HSA can serve as an emergency fund – keep receipts, then reimburse yourself when you are in a pinch and need cash.
It is a terrible habit that should be avoided but I would say yes sometimes it makes sense. But rarely. I paid cash for a California vacation in 2018 with the exception of our hotel rooms. 6 days in Anaheim at a hotel near Disneyland was over $225 a night. Kids were were nine and eleven. As we had no family vacation due to Covid this summer and my kids get older I’m grateful for the memories and experience we had.
Nope, bad habit to get into. I have had a credit card for 56 years and never once paid interest. I use two cards nearly every day just to gather rewards, but they are paid in full before they are due. I’ve heard people who do that are called deadbeats. 🤑
The only time I’ve carried credit card debt (in the last 15 years or so) has been on a zero percent interest card. I’ve only done it once and it was to pay a substantial sized bill ($9000). I could have taken the money out of my emergency fund, but decided instead to get an 18-month, zero percent interest card and use that to pay the bill with. I actually paid the credit card off in six months, but it made me feel better knowing I could have had longer to pay it off if I needed to.
Not unless you have to!
Heck no!
As a general practice in real life, I say very likely not. Can one construct a hypothetical where it makes sense, of course.
Yes, but only if the interest rate the credit card company is charging is less than what you’re earning on that borrowed money. Which, in the real world, normally means you’re paying off your balances each month. 😉
I’ve occasionally carried credit card balances in the past.
I’ve become more responsible saving/spending money since then.
My credit card balances are now paid off in full each month.
Cash-back reward credit cards are used to earn some “free” money.
It usually doesn’t make sense to carry a credit card balance.
However, people may experience emergencies during times when their savings are inadequate. Credit cards can be used if they provide the best viable solution.
Funding an emergency savings account should be prioritized to avoid this situation in the future!
No. Never. Learn what an emergency cash fund is, and do it.
Sure – true short term emergencies. You need your car to get to work. Your car breaks and you need it repaired but don’t have the cash. Repair the car, keep your job, pay off the credit card immediately by being extremely frugal until its done. Better to carry a balance than loose your job.
Continue being extremely frugal until you have an emergency fund for the next emergency.
Only if you are highly-disciplined. It can serve as an emergency fund, but practically it’s just a bad idea as it will be the gateway drug to over-spending and getting on the wrong side of compounding interest/returns. Why not just hold some cash or use home equity when cash is needed. Heck, even an HSA can serve as an emergency fund – keep receipts, then reimburse yourself when you are in a pinch and need cash.
It is a terrible habit that should be avoided but I would say yes sometimes it makes sense. But rarely. I paid cash for a California vacation in 2018 with the exception of our hotel rooms. 6 days in Anaheim at a hotel near Disneyland was over $225 a night. Kids were were nine and eleven. As we had no family vacation due to Covid this summer and my kids get older I’m grateful for the memories and experience we had.
Nope, bad habit to get into. I have had a credit card for 56 years and never once paid interest. I use two cards nearly every day just to gather rewards, but they are paid in full before they are due. I’ve heard people who do that are called deadbeats. 🤑
The only time I’ve carried credit card debt (in the last 15 years or so) has been on a zero percent interest card. I’ve only done it once and it was to pay a substantial sized bill ($9000). I could have taken the money out of my emergency fund, but decided instead to get an 18-month, zero percent interest card and use that to pay the bill with. I actually paid the credit card off in six months, but it made me feel better knowing I could have had longer to pay it off if I needed to.