Recently I wrote about what happened when our credit card was somehow hacked in “What Happens When Your Credit Card is Used Illegally and Fraudulently?”
Ironically, the card that was used illegally was not the one we use for online shopping. We “Reduce the Risk of Online Shopping with a Low Limit Credit Card” and it seems to be working for us.
I’ve read some other interesting articles about credit cards and the perils thereof. Here are a few you might find worth a skim. (Get it: “skim.” Stealing credit card data? You just can’t buy puns like these even if you subscribe to the Globe and Mail online.)
Big Cajun Man explored the landmines that arrive in the mail in his article Credit Card Cheques, What Gives?
Robb Engen of Boomer and Echo wrote in the Toronto Star about 4 Reasons to Avoid a Rewards Credit Card
The Blunt Bean Counter points out that using one points (see the pun?!) card for your business and personal expenses is “an audit nightmare waiting to happen” in Credit Cards – Tax, Budget and Repayment Issues
Some time ago, Michael James on Money ran the numbers to find out what it costs to pay his credit card bill ahead of time in The Cost of Paying Bills Early. Is it worth paying this “premium” to insure against missing a payment due date?
The comments in Retire Happy’s TFSA or Pay Down Debt? make for interesting reading. Is it better to have an emergency cash supply so you can keep making the minimum payment on your debts, or to pay off the debts and not have an emergency fund? There’s more at work than just the interest $$.
Join In
Have you read a favourite article about credit cards? Please share your opinions with a comment.
I am attempting to build an emergency fund. I am a single person and I feel that the Suze Orman recommended 8 month emergency fund could be all that stands between me and total ruin. I have only myself to rely on.
I have read lots of articles about paying my debt before I save but I have decided to do both because peace of mind is as important as being debt free.
I only have $507 in my emergency fund and I owe $16,200 so I will have to rely on credit cards or my HELOC if a real emergency happens.
I think part of the equation is the type of debt. I think when they say “pay off debt” before saving they may be referring to credit card debt at 19%+ interest, rather than long-term debt like a mortgage, car (although in most cases I think people spend more on a car than they need to), or low-rate line of credit debt.
I can understand your viewpoint. Without even enough in the bank to pay the minimum balance on a credit card, and one month’s utilities, taxes, insurance and other required bills, someone is really living on the edge. It takes weeks to start receiving EI, for instance, so a sudden job loss could cause devastation.
For sure if a credit card is part of the plan for handling a money emergency, it would be important not to jeopardize that card by using it for huge numbers of high risk transactions. Instead, I’d get a second low-limit card to use for daily stuff (gas, food, online) or only use cash for those purchases.