should we cancel our credit cards?

Tamiri

Thu, Jan 03 2008, 4:20 pm

[quote="cassandra"]Yeah, if you pay your balance monthly it's not going make a real difference.
[/quote]

Yes, that was us. There is a reason that I wrote to treat the credit cards as cash: it's the way we've always done it and B'H never gotten into trouble that way. We made the cards work for *us*: free miles (Amex for as long as that lasted), Discover Card cash-back, free shipping on LL Bean, GAP card etc.

Imaonwheels

Tue, Jan 15 2008, 8:32 am

In Israel there are several different types of cards.

1. Debit cards (Electrocheck, Direct) This card takes the money immediately out of your acct and will not let you spend money you don't have. For someone on tight finances this has many advantages over using checks:
1. The payment can't be lost or passed around.
2. If you don't have it you can't spend it.
3. You can not get "mugbal" (if you don't know you don't want to) and esp "mugbal chamur" , lo aleynu.
4. A thief cannot use credit, unless you have thousands of shekels plus he is not going to get very far.
5. Low fees, but each purchase is a line on your statement. This is no longer a problem if you don't pay "amala shurah".
6. Instead of going to the ATM and taking out 50 shekel for a 35 sh purchase and wasting the other 15 you spend only 35 shekel.
7. You don't pay for checkbooks.

Imaonwheels

Tue, Jan 15 2008, 9:02 am

2. Regular card. Use Isracard because there is no minimum purchase unless you are sure you are going to use the card. AE and Mastercard have minimum spending. AE has the highest yearly fees. Only order an overseas card if you need it.

3. Active. Highest interest but longest period to pay w/o interest - 42 or 47 days. Only 8 sh/mo and no transaction fee. They give to nearly anyone and give you a large amt of credit. Use it to pay off monthly or major expenses you must make and this is the only way.

4. Higher cards. If you qualify, gold (incl Master Card) and platinum give you much lower interest rates. This is because they are making enough money off of your savings, investments or business turn around. Our bank applied for a MasterCard for dh w/o even telling us. That is because we pay home and business phone, electricity, etc on his card. 5,000 sh/mo is a low bill.
On this card he can take a loan at prime + 2%. A regular loan is like prime +6. We now pay taxes on it and some suppliers.

There are 2 ways to be offered a higher card, use credit or have lots of money put away.

5. Bank Mizrachi - Tephachot have a loan that is a cc. You use it and do not have to return it for a specified time. DS who is a student got one for students that does not have to be returned until he finishes his degree. 3 years, up to 20,000 /yr. Basically like a student loan. I keep this card for him to make sure he uses it only for expenses related to his studies, books and such. They also have one for those who take out a mortgage so part of your mortgage can be used for lawyer, furniture, taxes, etc.
Now other banks are starting to follow suit.

Imaonwheels

Tue, Jan 15 2008, 9:14 am

In Israel you don't have to be looking at your credit rating all the time. You have to be a good customer to the bank (or CAL). Because a bank is also a business they need to be making money from you somehow or they will do nothing for you. Their hated customer is one who stays around 0 and has neither credit or savings. They lose money and will not give you any decent service. If you have a deposit, use credit or have a high turnover the bank will be on your side in a temporary crunch.

BTW, the fees on horaat keva are higher than credit payment. Cal has a new program better for me. It gives you automatic discounts in stores you use a lot. Even if you bought super sales end of the season another 5-10% comes off the purchase on the cc as well.

It is very worthwhile to research all of these things on the net with your spending style in mind before making a decision. DH and I have always had separate accts because we have very different spending styles and attitudes towards money. I am a risk taker and he won't put out a dime until he knows where its coming from. That is why my spending limit is around 10,000 and his is close to 100,000. On the other hand, part of what I do is always save each month and he has no savings whatsoever. He has tried it and found that the minute he gets scared he runs for the savings. I have been trying to get him to have the best of both worlds by saving, but in my acct. That means breaking that savings would have to be a joint decision for a good reason.