Do I even need credit cards?
Credit cards are great. You get free money for 30+ days and a bunch of additional benefits like insurance, extended warranties and reward programs. When vendors don't behave, you dispute the charge with the credit card and they deal with it on your behalf. Just get a fee-free American Express card and pay the balance off each month.  There's nothing wrong with using cash either, but I would avoid debit cards like the plague. Try to buy an airline ticket, rent a hotel room, or rent a car without a credit card. Doable? Perhaps. Easy? Nope. With a debit card, you run the risk of a hotel reserving more than your stay's cost for room service, parking, etc and potentially having a domino effect if other payments bounce.  We just spent 3 nights in NYC, room was just over $1000. Do I really want to carry that much cash? There are numerous reasons that go beyond the immediate requirement for access to credit.  Many people just plain don't like carrying cash. Before electronic debit cards became mainstream about the only way to pay for online services was with a credit card.  This has now changed just about everywhere except a large number of airlines which still only sell online tickets via a credit card payment. And then there are all those countries where governments (and some banks) have decided to charge merchants more when customers use debit cards.  If you don't like carrying cash then you may find that the only card you can use is a credit card. These concerns are gradually disappearing and at some stage someone is likely to offer a combined debit-credit card. At which point you'll probably get credit whether you like it or not. You don't need a credit card anymore than you need a TV or a car.  There might be many circumstances where a credit card is a convenience, there might be things you give up because you don't have a credit card.  There are even some upsides to a well managed card account. But no, you don't need it. People have credit cards for various reasons depending upon their personal situation and uses  You don't need to have a Credit Card if you don't have a reason to. But most people do. A credit card can be a long running line of credit that will help to boost your FICO score.  However if you have student loans, a mortgage, or car payments those will work just as well. If you ever get to the point where you don't have any recent lines of credit, this may eventually end up hurting your score, but until then you really don't need any extras. You don't need credit cards but there are few benefits, if you pay them off right away I assume you do have a debit card, since sometimes (like unattended gas stations or shopping on the web) cash is not accepted. "No you do not need a credit card.  They are convenient to have sometimes.  But you do not ""need"" one.  I know people who only have one for use when they travel for work and get reimbursed later.  But most companies have other ways to pay for your travel if you tell them you do not have a credit card." I can't answer the question if you should or shouldn't get a credit card; after all, you seem to manage fine without one (which is good). I started using credit cards when I lived in the UK as the consumer protection you get from a credit card there tends to be better than from a debit card. I'd also treat it as a debit or charge card, ie pay it off in full every month. That way, because you're not carrying a balance the high interest rate doesn't matter and you avoid the trap of digging yourself deeper into the hole each month. Cashback or other perks offered by a credit card can be worth it, but (a) make sure that they're worth more than the yearly fee and (b) that they're perks you're actually using. For that reason, cashback tends to work best. I'd get a VISA or Mastercard, they seem to be the ones that pretty much everybody accepts. Amex can have better perks but tends to be more expensive and isn't accepted everywhere, especially not outside the US. But in the end, do you really need one if you're managing fine without one? If you are in the U.S., without credit cards, you probably don't have a credit history. Without a credit history, you won't be able to get a loan/mortgage, and even if you do, you'll get it on very unfavorable terms. Depending on where you live you might even have great difficulty renting an apartment. So, the most important reason to have credit cards is to have a good credit score. People have already listed other advantages of having credit cards, but another thing that wasn't mentioned is fraud protection. Credit cards are better protected against fraud than debit cards. You probably shouldn't use debit cards online unless you must. Also, without a credit card or credit history, some simple and important liberties like renting a car while you are travelling might be denied to you. So, in conclusion, it's bizarre, but in modern America you need credit cards, and you need them bad. Eventually you are going to need some sort of real credit history.  It is possible that you will be able to evade this if you never buy a house, or if you pay cash for any house/condo/car/boat/etc that you buy.  Even employers check credit history these days.  I wouldn't be surprised if some medical professionals such as surgeons check it also.  Obviously if you have a mortgage and car loan this doesn't apply, but I'd be curious how you acquired those unless you have substantial income and/or assets. Combine this with the fact that certain things like renting a car essentially require a credit card (because they need to put a hold on more money than they are actually going to take out of your card, so they can take that money if you don't bring the car back), and I think you should have a credit card unless you and your wife are individuals with zero impulse control, which sounds highly improbable. If your concern is the financial liability of the credit line, just keep the credit line low. "Like many things, there are pros and cons to using credit cards. The other folks on here have discussed the pros and length, so I'll just quickly summarize: Convenience of not having to carry cash. Delay paying your bills for a month with no penalty. Build your credit rating for a time when you need a big loan, like buying a house or starting a business. Provide easy access to credit for emergencies or special situations. Many credit cards provide ""rewards"" of various sorts that can effectively reduce the cost of what you buy. Protection against fraud. Extended warranty, often up to one year Damage warranty, covering breakage that might be explicitly excluded from normal warranty.  But there are also disadvantages: One of the advantages of credit cards -- easy access to credit -- can also be a disadvantage. If you pay with cash, then when you run out of cash, you are forced to stop buying. But when you pay with credit, you can fall into the trap of buying things that you can't afford. You tell yourself that you'll pay for it when you get that next paycheck, but by the time the paycheck arrives, you have bought more things that you can't afford. Then you have to start paying interest on your credit card purchases, so now you have less money left over to pay off the bills. Many, many people have gotten into a death spiral where they keep piling up credit card debt until they are barely able to pay the interest every month, never mind pay off the original bill. And yes, it's easy to say, ""Credit cards are great as long as you use them responsibly."" That may well be true. But some people have great difficulty being responsible about it. If you find that having a credit card in your pocket leads you to just not worry about how much you buy or what it costs, because, hey, you'll just put it on the credit card, then you will likely end up in serious trouble. If, on the other hand, you are just as careful about what you buy whether you are paying cash or using credit, and you never put more on the credit card than you can pay off in full when the bill arrives, then you should be fine." Credits are expensive, so it's a great advantage to pay in cash. Obviously, it's even more an advantage to pay in cash for a house or a car, of course if you can afford it. But, as annoying as it could be, there are some services, where you're out of option to pay in cash, or even to pay by bank transfer. One of the most prominent examples, Google Play (OK, as I've learned, there are prepaid cards. But Groundspeak, for example, has none.). With the further expansion of Internet and E-Economy there will be more cases like that, where paying in cash is no more an option. Booking of hotels or hostels is already mentioned. There are some that provide no other booking option that giving your credit card number. However, even if the do, for example bank transfer of, say, 20% as reservation fee, please note that international money transfer can be very expensive, and credit card is usually given only for security in case you don't come, and if you do come and pay in cash, no money is taken = no expensive fee for international money transfer and/or disadvantaging currency exchange rate. "The key part of your question is the ""so far"".  So you didn't need a credit card today, or yesterday, or last month - great!  But what about tomorrow?  The time may come when you really need to spend a little more than you have, and a credit card will let you do that, at a very modest cost if you pay it off promptly (no cost, if paid within 30 days). I learned this when I was traveling and stranded due to bad weather.  I had almost nothing in my bank account at the time, and while I actually did have a small student-type credit card, I came really close to having to sleep at the train station when I didn't have enough for another night in a hotel. As an example, if you have close friends or family living across the country, and something tragic were to happen, would you be able to pay for a flight to attend the funeral?  What if you'd recently had an accident and a big medical bill (it doesn't take much, a broken arm can cost $10,000)?  Perhaps you have a solid nest egg, but breaking a CD ahead of schedule or taking short-term capital gains on a mutual fund will usually cost more than one or two months of interest payments."
In some stores that is done. When I shop at the Apple store or at the Farmers market the receipt is automatically sent to my email address. Why don't others do it? If the target of the itemized receipt is a credit card company they would be sending data that they spent collecting to another corporation. The grocery store is collecting your data so they can sell it to their vendors. They sell to vendors the info that Gen X shoppers that buy cat food are more likely to use brand X laundry detergent then Millennials. The credit card companies could gather even more Meta data that they could sell. Privacy. Some people don't join the reward program at the store because they don't want a company to know exactly what they buy. Even fewer would want the credit card company to have that information.  The credit card companies would have to want this level of data that would have to be stored, maintained, and protected. "&gt; But I explicitly mentioned the customer experience, which is completely different and no matter how much you want your industry experience to matter for that, it doesn't affect it.  You mentioned the customer experience randomly in some parts, then threw in Wikileaks in others. If we're talking about the customer experience, we need to drop the payment processors aspect, because the majority of the time, the consumer doesn't even know who processes their card payments let alone care, and again, PayPal is not even close to the only option. If this were 1998 and people were really wary of buying online, then it would be a bigger deal to be banned from PayPal. But it's not 1998, and a ton of people don't care, and there are all kinds of alternatives.  PayPal can deny service all it wants (and it does that on a regular basis) and that in no way means that a business can't accept cards. You're ""customer experience"" premise is flawed. I literally spend all day helping businesses set up credit card processing, and PayPal is a drop in the bucket.   &gt;Could you clarify for me how VISA/MasterCard managed to block a merchant, who presumably wasn't a direct customer (but instead a payment processor customer), but cannot block a card holder? (yes, this is an honest question)  Visa and Mastercard have relationships with banks and/or processors, who have relationships with merchants. Visa and MC's agreements with banks and processors stipulate that those banks and processors can't offer services to companies engaging in illegal activity. Wikileaks was (allegedly) engaging in illegal activity, and it's on that basis that Visa and MC denied service to WL.  Visa and Mastercard have almost nothing to do with cardholders. They don't issue credit cards to cardholders, they aren't the ones that do credit checks to determine creditworthiness, they aren't the ones helping you with your monthly statement or a dispute, etc. Cardholders aren't Visa and MC's clients. When a transaction is run, it's authenticated by the bank that issued the card, not by Visa or MC, and it's the bank, not Visa or MC, that would block transactions or freeze a cardholder account.   &gt;The WikiLeaks blockade was clearly political. What makes you say otherwise? And this is political.  So your argument is that anything political is the same as anything else political? Kind of a stretch..  Wikileaks was denied service by the card brands for allegedly engaging in illegal activity. PayPal is denying service of its own volition, which FYI, it does every day to legal businesses. As long as their reasons for doing so aren't discriminatory based on status in a protected class, they are (and should be) allowed to refuse service." Why don't you just put your down payment on one of your credit cards? (Note: I'm not actually suggesting that you do this. Please read on.) There are a few reasons why you wouldn't (or couldn't) do this: The interest rates on the cards you have is very high.  You don't have enough of a credit limit on any one of your cards for the down payment.  These two reasons highlight the answer to your question.  Credit card companies charge very high interest rates. These high rates allow them to make money even when some of their customers default. They know that not everyone will pay them back, so they make sure to make a hefty profit on those who do.  Secondly, credit card limits are often much lower than the amounts of car and home loans. This limits the risk to the credit card company. Sure, you have $100,000 in total credit limit, but this is split among nine different companies.  When a bank offers a traditional loan for a large sum of money at relatively low interest, they need to be able to limit their risk somehow. They do this by ensuring that their customers actually have the ability to pay them back. Some things you should consider: Balance Transfer Debt Consolidation If you get approved for the Citibank 2 year interest free credit card on balance transfers, you will need another loan of $18K to consolidate your other debt. If you cannot get approval for the credit card you may need to get consolidation loan approval for your full $35K of debt. This approval again will depend on your income and your ability to make repayments. As it sounds like you don't have any assets, you may have to get an unsecured loan which comes with higher interest rates. Remember a consolidation loan is only worthwhile if you can get an interest rate lower than your current interest rates and if you pay as much as possible to reduce the term of the loan and the total interest you end up paying. You haven't given the interest rate for the consolidation loan, but lets assume you could get one at 12% p.a. over a 3 year period. For a loan of $18K you would have to pay $138 per week. Together with the $163.50 per week you would have to pay the credit card balance transfer, your total repayments per week for the first 2 years would be $301.50, then $138 per week for the 3rd year. This option sounds affordable, but without knowing what your income and current expenses are it is hard for others to determine for sure. If you had to get a consolidated loan for the full $35K at say 12% p.a. then your weekly repayments would be $268.30 over a 3 year period. This looks to be achievable too. Being Disciplined As you said you will need to be very disciplined in order to get out of this debt. You will need to set up a proper budget and watch every dollar you spend. You will need to restrict any spending on credit cards and getting any new personal loans. You say you will keep a small credit limit to pay for ongoing online payments for courses. Make sure you uses a 55 day interest free credit card (preferably with no annual fee) for this and pay the full amount due every month, so you don't end up paying any more interest on this card. In case of death would my debts pass on to my next of kin or family? If your debts are unsecured (which personal loans and credit cards are), then no your next of kin or family will not have to pay your debts if you die. When you die any money or assets (which would be sold) in your estate will first be used to pay off any of your debts. If there is not enough money or assets in your estate then your remaining debts may not need to be paid. Other people are only responsible for paying your debts after you die if: Bankruptcy An alternative to Bankruptcy is a Part 9 debt agreement, as I mentioned in my answer to your previous question. In this case you will still need to pay off at least part of the debt but will not be charged any further interest on the debt. This is not as severe as Bankruptcy, but as I mentioned before, should not be taken lightly. Like bankruptcy, a debt agreement will appear on your credit file for seven years and your name will be listed on the National Personal Insolvency Index forever. Bankruptcy or a Debt Agreement should only be used as a last resort if you are unable to undertake any other option. And remember, even if you do take this course of action, you will still need to be disciplined now and into the future, so you don't end up in a similar situation again. I am like you with not acknowledging balances in my accounts, so I pay my credit card early and often.  Much more than once a month.  With my banks bill pay, I can send money to the credit card for free and at any time.   I pay it every two weeks (when I get paid), and I will put other extra payments on there if I bought a large item.  It helps me keep my balances based in reality in Quicken. For example, I saved the cash for my trip, put the trip on my credit card, then paid it all off the day after I got home.  I used the card because I didn't want to carry the cash, I wanted the rewards cash back, I wanted the automatic protection on the car rental, and I couldn't pay for a hotel with cash. There are many good reasons to use credit cards, but only if you can avoid carrying a balance. Definitely not.  Credit cards only exist to suck you into the soulless corporate system.  What you want to remember here is that you can't trust banks, so you'll want to convert all your savings into some durable asset, say, bitcoins for example, and then hoard them like Smaug until after the Fall. "Using the card but paying it off entirely at each billing cycle is the only ""Good"" way to use a credit card.  If you feel like you will be tempted to buy more than you can pay back don't use credit. As far as furnishing the apartment, the best thing to do would be to save and pay cash, but if you want to use credit the credit available at stores would be a far better deal than carrying it on a card." "Here's what my wife and I did. First, we stopped using credit cards and got rid of all other expenses that we absolutely didn't need.  A few examples: cable TV, home phone, high end internet - all shut off.  We changed our cell phone plan to a cheap one and stopped going out to restaurants or bars.  We also got rid of the cars that had payments on them and replaced them with ones we paid cash for.  Probably the most painful thing for me was selling a 2 year old 'vette and replacing it with a 5 year old random 4 door.   Some people might tell you don't do this because older cars need repairs.  Fact is, nearly all cars are going to need repairs.  It's just a matter of whether you are also making payments on it when they need them and if you can discipline yourself enough to save up a bit to cover those. After doing all this the only payments we had to make were for the house (plus electric/gas/water) and the debt we had accumulated.  I'd say that if you have the option to move back into your parent's house then do it.  Yes, it will suck for a while but you'll be able to pay everything off so much faster.  Just make sure to help around the house. Ignore the guys saying that this tanks your score and will make getting a house difficult.  Although they are right that it will drop your score the fact is that you aren't in any position to make large purchases anyway and won't be for quite some time, so it really doesn't matter.  Your number one goal is to dig yourself out of this hole, not engage in activity that will keep you in it. Next, if you are only working part time then you need to do one of two things.  Either get a full time job or go find a second part time one.  The preference is obviously on the first, which you should be able to do in your spare time.  If, for some reason, you don't have the tech skills necessary to do this then go find any part time job you can.   It took us about 3 years to finally pay everything (except the house) off - we owed a lot.  During that time everything we bought was paid for in cash with the vast majority of our money going to pay off those accounts. Once the final account was paid off, I did go ahead and get a credit card.  I made very minor purchases on it - mostly just gas - and paid it off a few days before it was due each month.  Every 4 months they increased my limit.   After around 18 months of using that one card my credit score was back in the 700+ range and with no debt other than the mortgage. *note: I echo what others have said about ""Credit Repair"" companies.  Anything they can do, you can too.  It's a matter of cutting costs, living within your means and paying the bills.  If the interest rates are killing you, then try to get a consolidation loan.  If you can't do that then negotiate settlements with them, just get everything in writing prior to making a payment on it if you go this route.  BTW, make sure you actually can't pay them before attempting to settle."