Do you buy your gadgets on credit?

[Zack Mahdavi]

Earlier today, I was reading up on possibly getting a credit card. However, I realized it might be a bad idea as I might start buying gadgets on credit.

So here's my question.. do you use buy your gadgets using any kind of credit? If so, how quickly do you pay it off? If not, why not?

[BanjoFrog]

Beware GAS... Gadget Acquisition Syndrome. Once you start, it's hard to stop. You buy and buy and buy, and then suddenly you're surrounded by a mountain of obsolete gear you haven't even paid for yet.

[Kati Compton]

For the non-huge purchases (house, car), if I can't afford to pay for it outright, I don't buy it. I do put as much as possible onto credit cards, to get the short-term interest-free loan and rewards. But I always pay them in full each month. So, this goes for gadgets, computers, patio furniture, appliances, etc.

It helps that I'm in a dual-income household, of course.

[Jerry Raia]

I do lots of gadget credit card purchases. I tend to pay them off in a few months so it isnt so bad. I rotate the old stuff out on ebay so it doesnt seem so terrible paying for things for a couple of months.

My big problem is I have to have it NOW!

I have the advantage of being single now so it is easier for me.

[Kacey Green]

i voted no, never, unless you consider the Toyota Prius (http://www.prius.com)a gadget (it has blutooth :D ) seriously though by the time I'm ready for the Prius I may not even need a loan. (Thanks to saving religiously with minimal spending) realisticly I may need a loan upto $7000 not including taxes and insurance, etc. I hope to purchase this Feb 2005.

[Anthony Caruana]

Beware GAS... Gadget Acquisition Syndrome.

So, I do have gas... just not the sort I can accuse my dog of having :D

[Janak Parekh]

For the non-huge purchases (house, car), if I can't afford to pay for it outright, I don't buy it. I do put as much as possible onto credit cards, to get the short-term interest-free loan and rewards. But I always pay them in full each month. So, this goes for gadgets, computers, patio furniture, appliances, etc.
Exactly the same principle for me. I never have paid interest on my credit cards, even though I use them for most nontrivial-sized purchases.

zkmusa: As long as you can control your budget, the rewards with a credit card are a pretty good win, whether they be points or cash back. I also prefer having the flexibility of not carrying large amounts of cash, and credit cards are much more convenient than checks in most cases.

--janak

[Anthony Caruana]

Fortunately, the tax system in Austrlaia allows me to salary sacrifice PDA (and some other tech) purchases. This means that I buy the item from my salary and therefore save money by not paying tax on that money.

Effectively it means that my PDA purchases cost about 50% of the sticker price.

[Zack Mahdavi]

zkmusa: As long as you can control your budget, the rewards with a credit card are a pretty good win, whether they be points or cash back. I also prefer having the flexibility of not carrying large amounts of cash, and credit cards are much more convenient than checks in most cases.

I'm not saying I pay in cash or check either. In fact, I hate cash... I don't carry it around if I don't have to.. :) What I normally use is a check card so any purchases I make get debited from my checking account immediately.

This is the way I've liked doing things for a long time, but the problem with this is that you don't get the benefits of having a credit card.

Let me ask you all another question then. What perks does your credit card offer? I know American Express gives an extra 1 year extended warranty of electronics purchased on their card, which personally I find very cool!

[Janak Parekh]

Let me ask you all another question then. What perks does your credit card offer? I know American Express gives an extra 1 year extended warranty of electronics purchased on their card, which personally I find very cool!
By not using a check card (I assume it works somewhat like a debit card; correct me if I'm wrong), you have an easier time contesting wrong charges to your account. (On a debit card at least, you have a very limited timespan to catch errors.) You also get to "control" your monthly payment through an extra step, which I personally prefer.

In addition, cash back/rewards points are always nice to have. Believe it or not, they do eventually add up.

I personally don't use the warranty options...

--janak

[Jon Westfall]

I have 3 credit cards (Mastercard, Discover, Amex). I usually put all my bills on Discover (to get the cashback rewards) and either use Discover or one of the others (when Discover starts to get near ~450) for regular purchases. I get paid at the end of the month normally, and pay off all my credit card debt immediately - and I recommend if you get one, you do the same. Not only do you avoid EVER paying finance charges or late fees, but you also build solid credit. I called up Discover last year for a credit limit increase (for the heck of it) and they doubled my limit without a credit check simply because I was never late or carried a balance.
Its actually a subject pretty dear to my heart, as my Dad (a salesman) sees people in debt up to their eyeballs every day. Stories that you wouldn't believe - people who have 3rd mortgages and own less than 1% of their house. People who have declared bankruptcy 3 times and wonder why no one will give them credit.
Paying Minimums sets people on a slippery slope down to a lot of debt. If you have 3,000 of debt at age 26, at 20% APR and paying 2% minimums, you'll pay $16,000 to get rid of that debt, and you'll finally pay it all off at age 80. The National Consumer Council has more info if you care to read: www.thencc.org.

Sorry for the soapbox this turned into!

[Kati Compton]

I only get credit cards that have rewards programs AND no monthly fee. I ignore the interest rate, as I don't carry a balance. And I NEVER get a card that has an annual fee.

I have a couple cash-back cards (used for different purposes), as well as a gift certificate type rewards card.

[Janak Parekh]

Sorry for the soapbox this turned into!
Nah - you make some very good points. I agree with all of yours and Kati's. The first thing I look at whenever I get a CC offer is whether or not there's an annual fee...

--janak

[socrates63]

So here's my question.. do you use buy your gadgets using any kind of credit? If so, how quickly do you pay it off? If not, why not?
Since most of my gadget purchases are done online, I always use my Amex for added security. Like many people here, I never carry a balance. Buying stuff online without a credit card is a risk proposition (even if the seller is legit, reliable, etc.).

Having a credit card is really a necessity in our society. It's an easy way to demonstrate to creditors and lenders that you are a responsible person. You just have to be careful about instant gratification and buying stuff you really can't afford.

[Zack Mahdavi]

Sorry for the soapbox this turned into!

Wow, thanks for that advice. My parents are the same exact way. They only have 2 credit cards and pay the entire thing off every month. It's very solid advice.

I think it's too early for me to get a credit card, honestly, as I'm only a Junior in college. However, a lot of my friends have one, and they're able to manage the thing responsibly. I think I'd treat the credit limit as equivalent to my checking account balance, so that way I'd easily be able to pay the thing off every month.

[Jason Dunn]

Interesting discussion!

If you ever hear of a local church offering a program called Good Sense, do yourself the favour of taking the course. It's 95% secular (ie: non God stuff) and focuses on money management issues that anyone can benefit from - I went through it with my wife a few months ago, and while I'm thankfully mostly debt free, I learned some good lessons from it.

[Kacey Green]

I am also in the pay it off in full school, I was tired when i first posted, but being able to pay for something, includes buying on credit but not carring a balance.

[Janak Parekh]

I think it's too early for me to get a credit card, honestly, as I'm only a Junior in college.
Actually, it's not too early. That's precisely the point at which you want to start building up a positive credit history, so that you can go out and apply for credit when you graduate. I got my first credit card when I was a freshman or sophomore. Just be careful that you're responsible. :)

--janak

[Tricia]

I think it's too early for me to get a credit card, honestly, as I'm only a Junior in college.
Actually, it's not too early. That's precisely the point at which you want to start building up a positive credit history, so that you can go out and apply for credit when you graduate. I got my first credit card when I was a freshman or sophomore. Just be careful that you're responsible. :)

--janak
i think credit card comp. really like giving cards to college students. theres always those tables on the sidewalks of campuses. i think they count on college students to be irresponsible. "should i pay my bill?" "no, i have a keg"

[Zack Mahdavi]

i think they count on college students to be irresponsible. "should i pay my bill?" "no, i have a keg"

Hahaha.. that keg joke made me laugh.. :)

Thanks to everyone for giving your advice!