So what exactly is a Credit Card for?

[Furiex]

Okay, I only have 1 Credit Card, Has a 3500 USD limit, I put 200 dollars on it and then was like what the hell is this thing even for?

22.5% APR, so basically whenever I pay on it every dollar only 78 cents (roughly) goes down on the card, so im losing loads of money for having it.

But I need one for the bank to get credit?

Am I missing something here, What exactly am I supposed to do with this thing?

[Gamdwelf]

FREE MONEY!

No but srsly you pay it off each month. Also its for emergencies when you need money. My friend had some major car problems and was able to fix it using his credit card and then pay it off over time because he didn't have 500 bucks sitting around, but he could pay it off over like 2 - 3 months or whatever.

[Electromatt]

1) use credit card for only stuff you can afford
2) pay off what you bought before end of the month
3) get credit
4) use credit to get a good loan for house/car.

this ted talk http://www.youtube.com/watch?v=9XRPbFIN4lk is somewhat relevant.

[Dasffion]

Ideally, use it and pay it off right away. The interest you accrue is negligible if you don't let it sit for long periods. Without credit though you're going to have to pay a massive downpayment and have extremely high rates if you ever want to buy a house or a car.

[Thedoja]

I have an Amazon Gift Credit Card that I use to get Gas and Online purchases with. At Gas stations you get 2 pts per dollar and on Amazon.com you get 3 pts. I pay it off every week as if I was just using my debit card.

This way I get free shit since you can redeem the points for $$ on Amazon purchases.

[Thodrin]

Basically a credit card is used to get credit. credit is basically showing that your good for your money and are a good investment. Banks years ago would take anyone and anything for loans and such. Now a days its hard to get per say a mortgage or loan with little or no credit. (*Just bought a house*)

[Korgoth]

Paying 20% more for items then you would otherwise because you couldn't bother to wait, was an emergency, or lack the intelligence to understand what interest means.

[Kasierith]

Credit cards are for three things: 1) digital transfer of money, so you don't have to carry money around with you everywhere. This also enables you to exchange finances online (kinda... your credit card is the medium for your checkings/savings account). 2) Financial security. If someone beats you up and takes 100 dollars off of you, you're screwed. If someone lifts your card with 100 dollars on your account, you have means to attempt to protect your savings. Three, it allows for investment. If you can't afford something right away, but can afford it later in, say, the next few months, you can use your credit card to make the purchase and then pay it off as needed. Essentially a far quicker manner of managing bank loans compared to beforehand, and with automatic accountability (and interest over time) that makes a bank willing to allow this investment.

[Holyshnikies]

I have a $500 credit card. I never go over $250 a month. I only use it for gas. I went from having no credit to having a 700 in my first year and now up to a 745 in just 3 years. I ONLY use it for gas.

And the reason they exist is to build up your credit. Paying on it over periods of time shows how reliable you are and the higher your number, the higher of a chance you will receive a loan for a house or car or whatever.

[belfpala]

Ideally, it's for Important or Emergency stuff that you can't currently afford, but will be able to afford before the interest kills you. Example: you blow a tire or some other part of your car and don't have the cash to fix it, but need it fixed to get to work; pay to fix with credit, pay off ASAP.

[Electromatt]

Also, get a card that has cash back and no member fee. If you pay off your balance each month, it's free money.

[schwarzkopf]

A voltage regulator or capacitor - basically it is designed to smooth out the rough demands of outgoing money to mean the smooth incoming.

If you have neither rough demands nor smooth income - then you don't need nor should not get one.

[Dasffion]

Paying 20% more for items then you would otherwise because you couldn't bother to wait, was an emergency, or lack the intelligence to understand what interest means.

APR stands for ANNUAL percentage rate. You're only paying 20% more if you let it sit on your card for a year, something you shouldn't be doing.

Another thing to note on that though is that as you get better Credit you can get Credit Cards that have much lower interest rates than that. I've got a high balance Visa with half that interest rate. I don't keep a balance on it but it's great to know I have it if I ever have to get emergency car repair or get stuck somewhere without any cash ect. ect.

[Dedweight]

FREE MONEY!

No but srsly you pay it off each month. Also its for emergencies when you need money. My friend had some major car problems and was able to fix it using his credit card and then pay it off over time because he didn't have 500 bucks sitting around, but he could pay it off over like 2 - 3 months or whatever.

Pretty much, use it almost entirely for emergency purchases(auto repairs, medical bills, and things like that), if you do use it for other things like food and fuel just make sure you have the money to pay it off at the end of the month and those interest rates will seem like nothing.

[fletch101]

These are good examples of ways people USE them.

The reason they exist is to make money for those who issue them.

[Kasierith]

Also, get a card that has cash back and no member fee. If you pay off your balance each month, it's free money.

Not exactly free money if you have to pay the balance. Which is pretty much what gets a lot of people in a gross amount of debt.

[Adam Jensen]

I use mine for gas, online purchases and emergencies.

I use my debit card/cash for everything else.

[Kujako]

It's for buying stuff without having to lug around or mail currency.

[Kasierith]

These are good examples of ways people USE them.

The reason they exist is to make money for those who issue them.

A great part of which comes from the interest on said cards. They're essentially micro loans.

[Deleted]

so do you need a credit card to build credit score?