Many authors tout the benefits of using the bank’s money interest free for 30 days or the interest free grace period – known as playing the credit card float. To gain substantially from this feature, you will need to spend a lot of money otherwise for most people, this tiny bit of interest savings is not worth exploiting.
It is true that not having any credit cards can cause a lot of inconvenience since you may need to carry extra cash or face difficulties trying to shop online. Actually, you just need to watch the amount you are spending each month and make sure you can pay the card balance in full by the due date. Debit cards for bad credit offer the same convenience as normal credit cards if you need one for purchases.
Most credit cards allow you to charge a new expense and enjoy a longer grace period provided you do not have any outstanding balance carried over from the prior months. Once you start owing the bank money, this benefit may be instantly removed.
Do not borrow money for purchasing unnecessary items that do not increase your net worth or depreciate in value such as a vacation, new cars, new gadgets etc. If you have surplus cash after paying your debts and regular savings, you are free to splurge occasionally. Just avoid borrowing money for personal consumption which adds more bad debt at high interest rates. And yes, charging expenses you cannot afford on your credit card account is equal to borrowing money from the banks at high interest rates and that is no better compared to legitimate loan sharks.
If you are already cash strapped every month waiting for the next paycheck, applying for credit cards will only make things worse. You are likely to find yourself spending more than before once you start using your cards freely. Very few people will actually benefit substantially from playing the credit card float. Personally, we think that the risk of getting trapped with expensive credit card fees are too high to worth the trouble.