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Thread: Credit Cards

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    God/dess Bella21's Avatar
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    Default Credit Cards

    Do you guys use credit cards often to build credit or do you use cash for everything? What works better if you're thinking ahead for when you do taxes? Also, I'm a full time student and I live at home. What percentage of my earnings do you think I'll be giving to the government? [withstupid]
    If you think school is hard, try being stupid.

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    Featured Member Destiny's Avatar
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    Default Re: Credit Cards

    Groceries, clothes, gas, dinners, I pay cash. Money for rent, electric bill, stuff like that I write a check. Actually, what I do is figure out how much I need to deposit in my checking account each week for those type of expenses. What's left after that, I save some, and use for the other stuff. Credit cards are a necessary evil somtimes, but are too easy to get into trouble with
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    God/dess Emily's Avatar
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    Default Re: Credit Cards

    I hate credit cards, but I use them for online and catalog shopping. They also serve as my "emergency fund". You can build up credit in other ways than credit cards...student loans, car loans, mortgage, even a cell phone. Having credit is important, but it's not as important as staying legit.

    You should probably talk to an accountant about the tax issue. What you pay in taxes doesn't depends on where you live (whose name is on the lease) and/or being a student. It just depends on what you make in that fiscal year. If it's under $8,000 (don't know the exact number), you don't have to pay anything at all. If it's $100,000, you're responsible for paying like 30-40% (depends on state and local taxes as well).


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    Banned Melonie's Avatar
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    Default Re: Credit Cards

    I have a credit card for emergencies on the road and for online purchases, but otherwise I never use it.

    Credit card transaction records and bank savings/checking accounts provide undisputable proof of how much money you are spending thus how much money you are earning, and these records are instantly available to the IRS and state tax departments. Computer programs can easily compare these records of how much you are spending with your tax returns showing how much you claimed that you earned. This is meaningless if you actually reported all of your income, actually paid your estimated taxes etc (at a 25%-40% rate depending on state & local tax laws). However, if you didn't, these records can prove that you are guilty of tax evasion.

  5. #5
    Veteran Member Brooklyn's Avatar
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    Default Re: Credit Cards

    i use credit cards for emergenicies or online stuff but i pay them off each month helps you build your credit.

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    God/dess Zofia's Avatar
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    Default Re: Credit Cards

    Do you guys use credit cards often to build credit or do you use cash for everything?
    I have a cash back card from BP. I use it for just about everything. What I don't use the cash back card for, I use my debit card. I never have more than a couple of dollars cash with me at any time. I do pay off the balance every month in full. I pay ontime and I use my credit union's online bill pay system. It's free! I do have a pad of checks that I got free when I opened my checking account, but I hardly ever use those. I keep track of my credit card bill in an account on Quicken. That way I know exactly what I owe, and never have a problem with charging too much.

    What works better if you're thinking ahead for when you do taxes?
    Some credit card issuers provide year end summaries. This is nice if you aren't keeping your own good records. But, those come at a cost.

    Also, I'm a full time student and I live at home. What percentage of my earnings do you think I'll be giving to the government? [withstupid]
    If your parents are providing more than half of your support, and thus claiming you as an exemption, you'll be paying a substantial percentage in taxes. Just get one of the tax software packages and do a test run of your tax situation. It's quick and relatively cheap. For free, you can get the booklets from your state Department of Revenue and the IRS and use a pencil. But, what's the fun in that? When I was a full time student, but living on my own my effective tax rate was about 20%. That included social security, FUTA, medicare, federal, state and local income taxes. Thankfully, since I was a single employee employer, Indiana did not impose state unemployment taxes or a workers comp requirement. That would have added substantially to the overall burden.

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