Mostly agree that buy with cash/check whenever possible and save credit cards for when only necessary like airplane/hotel reservations.

What helps for me:

1. Even if I use credit card, I pay most current charges within 30 days to reduce interest and keep balance low.

2. Who needs more than 1 credit card? Maximum of two.

3. Don't charge Christmas, birthday, or other presents to a credit card. Don't charge usual living expenses either unless desperate.

4.Save, save... Emergency money so don't need to charge on credit card.

5.Only use cedit (not card) for buying newer auto or house. Otherwise, no credit.

6.Teach you kids by your example on how to minimize credit charges & how to save.

Too many young adults today get into serious credit problems in their 20's. No clue either why saving is good.

Doing without credit has a certain in vogue/radical chic appeal to it.  But it isn't really that smart.  Living within your means is really the key, and if you can use credit to your advantage, you can be miles ahead of the game.

We refuse to use credit where there is an actual price differential if cash is used, or if there is a convenience fee or other cost associated with using credit.  If a repairman quotes us a price for cash and another for anything but cash, we use cash.  Beyond that though, there is money to be made/saved in using OPM (other people's money).

Everyone needs to pay for fuel, so why not use a credit card that knocks 3% off?  Everyone needs to eat, so why not use a credit card that knocks 1% off of groceries and 3% off of take out or sit down eateries?  Everyone buys something at department type stores, so why not take advantage of their 10% for signing up offers, or using a card that gives rebates of between 1 and 2%?  We've done that for years, and typcially end up earning another $1,000 to $1,500 a year that someone paying cash would miss out on.  In some years, especially when it came to some of the more expensive aspects of our home decorating, we would "earn" more than $3K on judicious use of credit cards alone.  We also try to charge larger ticket items on our cards (college tuition, cars (usually a couple of thousand limit imposed by the dealer, carpets, vacations etc.).  Just pay off the card every month, and refuse to carry a card that has any annual membership fee or other junk charge.

We also used credit to furnish our house.  Some good deals are price, but this industry has numerous "same as cash" deals that incur no interest if you pay it off according to terms.  We did, and in the meantime the money is in the bank earning interest.  We have also taken advantage of "0%" interest on new car purchases, but only after making our best deal.  When our money can earn more in a CD, we have also used .9% offers, and 1.5% offers.

Credit also facilitates internet or long distance transactions with third parties, all of which typically minimizes sales taxes, and usually includes free shipping.

Before we paid our house off in full, we had regularly refinanced our home and took the teaser APR rates, and flipped to a new loan when the step up was due on the old loan.  Paying the house off was not an option but through refinancing we kept the interest rates as low as they could be.  Sometimes even the same lending institution would match other offers we could obtain rather than lose the interest altogether.  We rode that merry-go-round for a number of years until we found a low enough fixed rate loan at 4.625%, took that, and avoided the "inability to refinance" problem that is occurring now.  We negotiaged away appraisal fees, the bogus bank doc prep fees, underwriting fees, and even on occasion, the credit report fee, and closing costs were covered as a perk for my wife's job, so we had next to no costs associated our serial refinancing.  We also never took out cash on any deal, and usually paid down the existing note to have a round number to start with on the new note.  The end result was lower housing costs using other people's money.  

Right now we are using our home equity line, @ 3.99%) to avoid drawing down depressed market investments, but if need be, assets could be liquidated to pay the loan balance (so far only still under $10K), and in the meantime the assets are not being sold at the bottom of a really terrible market.  While not directly equivalent to getting paid to use OPM, this uses OPM to otherwise minimize losses, and is also considered by us as a use of credit advantageous to us.

None of the foregoing would be possible without credit.  I am not exaggerating when I say that we have saved/earned tens of thousands of dollars over the last decade using credit as described above, and (other than a house which next to no one could afford to pay cash for), buying only what we could afford to pay for in full after taking advantage of the use of credit.  

While shunning credit completely has an appealing rebel ring to it, in the end it is not the smartest move.  What is smart about it though is that it does avoid the pitfalls of credit use if you are not disciplined enough, and do not have the means to pay off credit purchased items before the use of the credit begins to cost you something.  But if you have the resources (and they can be modest - just don't lose sight of the bill being due in full at the end of each month/ "same as cash" period, etc.), you can stretch those resources and get more, for less than if you only relied on cash.    

My wife and I own everything we have outright, including our house. We have excellent credit (over 800) and we pay any charges in full on the next billing cycle. We, just like a lot of Americans, live within our means. In our case that would include 6 TV's and 5 computers for 2 people. Living within our means is just a fancy way of saying we have lots of toys, but don’t save as much as we could. I applauded NCN for doing what most of us should be doing.

Remember "use it up, wear it out, make it do or do without"?  What happened to that guideline?  Shopping trips, credit cards and envy?  What about the Puritan priniples of thrift, self-reliance and sexual caution?  (That way, Grandma doesn't wind up raising bastard kids...) Well, if it worked well enough for us to build a  culture from raw woods, it will work now to furnish  our needs.   We've been spoiled brats and  pretenders.

It's time to treat money with respect.

The question is, why do we use credit.  Most people use credit to but things they cannot afford in the first place.  A long time ago American saved to buy that new washer and dryer, now they buy it on credit.  We have been brainwashed into thinking using credit is good.  When u use cash, it hurts.  But you do not owe anyone. I had almost $500k in credit over the last year.  I do not owe anyone. It's great to know that I have it. But I rather not use it because I hate owe anyone.  Use cash and save your money America.

if the government took the money they recieved for the bail-out and give it to each and every AMERICAN in the united states ,we would get ,$ 450,000.00 dollars per preson the economeny would stablize.

It always is amazing to me, how spoiled people have become; and I admit, I am one of those.  People complain about how terrible things are, how things are the "worst" in history.  I'm not really that old, 49, but as a kid we had a ranch style house, 1000 sq. feet with a car port.  One station wagon, one TV, each kid had a bicycle and a few toys.  We got a couple pairs of pants and shirts at the beginning of the school year, christmas two or three toys, some socks and maybe another set of clothes.  We wore hand me downs from brothers uncles etc.  We always had patches on our pants, when we got holes in our socks they were darned.  Just look at the adds on TV in the 70's, soap scrunchers that took bars of soap to small to use and scrunched them into a nice new bar.  The little machine that put plastic buttons on etc.  I was a middle class kid, the poor folks had far less than we did.  Point is can you imagine people today wearing hand me down clothes or using a soap scruncher.  My sister in law complains constantly about lack of health care and the government needs to do something about it.  She however spends $400.00 on purses, at least 2 a month, drives a $35,000.00 car and could have health insurance through her company but doesn't want to spend the $150.00 a month for family coverage.  Sorry to sound like a "we used to walk a mile uphill both ways" type, but it's one of my hot buttons.  

Enough, that was a joke of an email.  The guy doing the math was a few digits off.  It would be $450.00 each.  My wife swore it was true until we did the math.  

enough, you are dead wrong.  No wonder we have such a financial problem in this country.  We don't know basic math.  $700 billion divided by 300 million = $2.233.  NOT $450,000 or whatever other number people come up w/.

To perplexed,

you can solve the problem of buying a car by using cash to buy a good second hand car - and have no loans at all. (especially if you are saving 60% of your gross then you can afford to do this).  If you watch the old fashioned newspaper, you can find a deal and go with cash in your hands and get a great deal.  These people are not 'savey enough' to use the internet and usually are older people who take better care of their cars anyway.

Also to all those who use credit cards but pay them off each month, the statistics clearly show that if you use cash instead, you will spend less each month.  The points really won't add up to be worth their benefit because of what you won't spend nearly as much when you use cash only. (OK there may be a very SMALL percentage of you who really are frugal with credit but very few).  I stopped using a credit card over 10 years ago even though I paid it off each month and instead I have a savings category in a spreadsheet for appliance repair, car repair/replacement, birthdays and christmas,  car insurance, house insurance and taxes. my clothes and costmetics, kids stuff. etc etc.  Each payday I addd to these categories a set amount and when I need something just deduct from the right category.  Sometimes one category goes negative but if so I wait till it is positive until I use it again and I keep a buffer of 3000 in there for emergency and it is in a high yeild online account.  It enables me to save 50% of my gross. When I used credit cards I could never do this.. Just an idea. If you do it I promise you - you would spend less and save more.