nkroadcaptain
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If inflation is 12% a year (a HIGH number) and your credit card interest rate is 12.7%, you lose by carrying a balance.
Additionally, as credit becomes harder to get, creditors are going to look very carefully at percentage of available credit you have used (i.e., maxed out). |
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Dan G
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The high interest rates are what makes CCs a bad idea. You may as well burn cash, literally |
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the answers unknown
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If you want credit it is!! |
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galileo_ali
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credit cards have high enough interest rate that inflation would have to be through the roof to compensate for it.
the quicker you pay off your credit cards the better. inflation is nowhere near the interest rate on your cards. |
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hungrypreggie
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just let the debt continue to override the maxium amount you have in your bank and you will be broke by no time |
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Mark
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well usually credit cards can have up to around a 22% interest rate, so it is best to pay it off when you get the bill, otherwise they gain alot of money out of you |
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shoestring_louise
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Your premise would actually possibly have value IF credit card interest rates were equal to or lower than inflation.
But they aren't.
In fact for the vast majority of people, credit card interest rates range from 12% to 30% (in Canada) and I've been told they can go even higher than that in the US.
If the lifetime of what you purchase on your credit card will outlive the time it takes to pay off the debt, then your argument may have validity, but again, most people don't only use their credit cards for long term purchases.
Carrying debt on your credit cards when you can avoid doing so altogether is the best anti-inflation you can get... why? because if you aren't a net borrower you can be a net saver and investing is always better to counter inflation than borrowing. |
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Vegas Baby!
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hmmm not exactly sure about the inflation part, but it's always good to have credit cards, pay them on time and eventually pay them off. it helps your credit, BUT don't take out too many at once. |
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AaronDM
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If you think that your income will follow inflation then this would be true, it also depends on what your interest rate on the credit is. Inflation is still probably not going to be more the the interest rate....my advice is pay it off! |
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Nathan V
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Pay your credit cards... you pay double inflation if you wait becuase they will charge you withholding fees |
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Jerry H
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Yes always a good idea, credit card interest rates are always stacked against you. There is no bailout money for visa or mastercard as they are making a mint off you! You sound Intelligent, take my advice and Pay it off! |
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That girl
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I'm not sure about all that, but my mom pays her credit cards off at the end of every month.. |
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Jeff H
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Pay off the cards and keep them paid off.
We are in a period of deflation. Your theory is false. Credit card companies have for the most part have been well in advance of inflation even back in the late 70s and early 80s. |
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Dan B
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Paying off credit cards and getting rid of them is an excellent idea. The goal is to retire with zero credit card debt.
The problem with credit cards is the high interest. That high interest is "buying" you good credit. I don't think I need to "buy' a good credit rating. They are one step below the payday loan people. Yes, high interest is a form of protection against inflation.
My opinion, based upon my situation, is good credit is achieved by having a good debt to income to savings ratio. That is a measure of your ability to manage credit. Low credit, decent income, high savings works better than credit card balances. We have had credit cards since 1988 and were able to buy a second home in this tight credit market with zero down (except for pre-paids). Credit cars are a measure of your potential debt load. If those cards get run up due to some emergency, can you afford the payments along with your other debts? |
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augusto
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The only way it would not be a good idea is if there was no interest on it whatsoever. Paying off your credit cards (if you can) is by far a better idea than paying them over time. Do the math and see how you’d end up paying 3 X as much of what you put on it (if you just make the minimum payment and not use it).
Paying off your credit card w/out closing it will boost your credit and scores.
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Kay
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You could ruin your credit rating if you prolong to pay off the debt. Inflation could be between 2 to 3 %, but interest on credit card is 12% to 30%. Now, you decide which is better. |
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Tasha B
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I pay my cc's down to a small balance - between 15 % and 5 % . I still get a small bill every month, but my accounts stay active which helps to boost my credit score. As far as inflation goes and the high interest rates, I try not to think of those things. I value the rising credit score more than a couple dollars each month. But that is coming from someone who wrecked their credit and has to take every step possible to raise the score. |
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michael y
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Inflation will be a very hot topic once we get out of this recession. The truth is, you cannot find a rate low enough on a credit card that has historically beat the average CPI/inflationary numbers. In my opinion, it is better to live without debt. However, if you are focusing on building a better credit record, you should keep utilization below 30% of your available credit.
One possibility is to take advantage of 0% balance transfer offers and transfer your balance before the rate expires. Be careful with balance transfer fees, and read the fine print. |
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Stealth
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Bank cards such as MasterCard and Visa allow customers to pay only a portion of their bill; interest accrues on the unpaid balance. Credit-card companies get revenue from annual fees and interest paid by cardholders. The longer you let this drag the more you will pay in interest, i suggest using 50% of available credit. The longer you pay the more you pay back |
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Cold Shot
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If you don't pay it off soon, you're just paying more to the credit card company. That's the way I see it. I pay mine off as soon as I can. |
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Romel S
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you should pay your credit cards long term wise because then has the economy begins to recovr itself there would be deflation casuing the value of the dollar to rise. this will allow you to pay the final debts. Also it depends on your income. |
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Jenni
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if you want bad credit that will be hard to get rid of I'd advise you to pay them....you can't get a lot of things with bad credit |
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scence_247
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?? What do you think?? Duh you should always pay off you bill.
i don't know exactly whwat you mean though... |
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