Where are my anti-debt/credit card people at?

[grossklw]

This is hilarious. This year I'm flying to Alaska with my family, staying for 2 weeks, Florida with my family for a week and a few nights in Vegas and I'm paying zero dollars out of pocket. Simply using business points my business credit cards earn. I've never paid a dime of interest on a CC and won't be starting now, the guy that said credit cards causing debt compared to guns killing people is spot on. I never pay baggage fees ( especially helpful getting fish/meat back from AK), and my family gets a 2/1 deal every year with both Delta and Alaska Air, it's an absolute no brainer.

It's laughable with the cash is king crowd still using a debit card. You're paying the exact same amount in the end for the product, why wouldn't you take the advantage of getting money back?

I despise Dave Ramsey for anyone with more than an ounce of financial literacy, but I've started a whole other thread on that topic. To each their own.

 

[Nick992]

How do people using only cash:

1) Book a hotel in advance (or at all?)
2) Book a flight
3) Apply for out of state tags

Debit cards

You're right, if you were exclusively cash, you could not easily pay at a distance. Even Dave recommends having a debit card for the cases you laid out.

 

[Cfriend]

I do try to pay cash when buying privately owned, small businesses since the seller has to pay a small percentage fee when a credit card is used. Other than that it credit cards for everything and pay the balance every month. Free money in my pocket and extra security.

The building credit part is a huge benefit too, especially for younger people. I got my first credit card when I was about 18. Always paid the balance monthly and by the time I bought my house when I was 25 I had a credit score well over 700 even though I had never taken out a loan aside from a couple thousand for college.



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[displacedtexan]

DEBIT CARDS.

I didn’t mean actual cash all the time, geez

Thread title included debit cards as well...

 

[Bachto]

Thread title included debit cards as well...

Read it again. Debt and debit are not the same thing.

 

[displacedtexan]

Read it again. Debt and debit are not the same thing.

Oops.

Using a credit card or credit cards is also not the same thing as carrying debt.

 

[74Bronco]

I would have never guessed people have different opinions/comfort levels/backgrounds on money... Pretty soon y'all are going to tell me you don't believe in the same God. Or that one political party is beleivable and the other isn't. Learn something every day.

 

[Agross]

I use a credit card a lot. I pay it off every month. Haven’t paid interest on a credit card in the last 25 yrs. Have spent thousands in rewards money on stuff I want. Have never had my info stolen. Have a few buddies that use debit cards all the time and have had their accounts hacked.
My folks had me get a credit card with a small limit when I turned 18 to start establishing credit and for emergencies while at college.

Lol dude I’m 28.

All you guys can play the credit card reward points game. You do you, but you will never convince me your credit card points are worth it. Period.

It can be hard to see with blinders on.

 

[Bachto]

Oops.

Using a credit card or credit cards is also not the same thing as carrying debt.

I get that. I just decided to eliminate the equation all together.

I do not fly enough for the miles to be worth it. I fly literally maybe every other year. Admittedly I am or was one of those people who was not disciplined enough for a CC. I got myself in some trouble when I was 20. Could I now go without carrying a balance and be okay? Probably. Is it worth it to me? Not really.

 

[Kurts86]

I quit using cash after a bunch of moves and being away from ATM’s from the bank I had the longest account history with and was happy with. I had awful experiences with more national banks and realized I could manage my banking 99% online.

At this point cash can seem like a burden. I carry a super minimal wallet with 3 cards and a drivers license. I don’t have a pile of change in my car console that’s lead to break ins in the past.

I hate debit cards. I feel like I’m opening myself up to a big loss on the rare occasion I use it. I use a credit card as a safety wall for theft as much as anything. I’ve never carried a balance on a credit card and the result was having an 800+ credit score by my early 20’s. My wife who never had debt but only used debit/cash had zero credit when we bought our first car.

If you travel or move with any frequency cards are an essential tool. If you operate in a small local sphere cash is more viable.

I understand cash only as a crude hammer of a budgeting tool but cards are an essential tool in modern life. Like any tool it’s only as good as its use and the user.

 

[Marbles]

Really? It’s better to wait and pay off your debt when you are paying interest? Lol ok

It depends, I set aside student loan payments every month, but they sit in a high yield savings account earning 3.4% interest. The day before interest starts being charged I will huck a lump sume at the highest interest rate student loan and be in a better position than someone who payed on them the entire time.

Now, if I decide to spend that money, then I am behind (unless it is on an emergency that would require debt at a higher interest rate).

Similarly, my savings account pays more than my truck loan charges, so not paying that off early, will work on the student loans and mortgage instead.

That said, I was debt free until 2 years ago and I will be glad to get back to being debt free. Of course, my mortgage is cheaper than my rent payments, so really the truck and student loans are what hurt.

As an example of why having debt is valuable, if I had chunked everything at paying down debt I would be going deeper in debt on less favorable terms at the moment as my daughter is about to have surgery. I much prefer knowing I can pay that bill when it comes ($5k deductible).

 

[The Ri Guy]

I finally cut them up after being reminded where those rewards dollars were coming from.
-Single mom's who hold a balance on their CC, etc.
-Companies that borrow money to deforest the Amazon or rape the earth in some other fashion, etc.

You may pay off your card every day, but your free money is hurting people and places. You may not personally be enslaved to debt, but you are continuing the normalization of a system that devours people.

People are going to be devoured by the system regardless, and companies are going to exploit resources for personal gain regardless. That's how it's always been and how it will always be.

I salute your personal convictions and sticking to your guns, not enough people do it these days.

But, by the same token you should stop hunting because you're giving money to the oil giants to get to your hunting spots, thus directly contributing to the raping of the earth, and adding to demand which jacks up prices and hurts struggling single mothers...right?

 

[Bachto]

I would have never guessed people have different opinions/comfort levels/backgrounds on money... Pretty soon y'all are going to tell me you don't believe in the same God. Or that one political party is beleivable and the other isn't. Learn something every day.

Yeah I should have seen that coming.

 

[displacedtexan]

I get that. I just decided to eliminate the equation all together.

I do not fly enough for the miles to be worth it. I fly literally maybe every other year. Admittedly I am or was one of those people who was not disciplined enough for a CC. I got myself in some trouble when I was 20. Could I now go without carrying a balance and be okay? Probably. Is it worth it to me? Not really.

We made some poor decisions when we were young, did without for a number of years.

Now we put fuel, groceries and such on cards. Cash back is $100 or more a month.

They can be a powerful tool. You don't have to be afraid, but you better respect them.

 

[Nick992]

@Nick992

Guys,
I had left this comment alone. but since you quoted it.
Its not right.

Debt is neither good nor bad.

Credit card companies make money on the transactions. They charge the vendor a percentage for using the credit card. While the consumer carried debt is a profit center its not their main profit center by a large chunk. It would be ok with all the credit card companies if everyone paid their bill every month as they are still making 1.5-5% on all transactions. Fact is if they have to carry a balance that money they are carrying is worth prime rate + whatever profit they determine.

Would yall rather that single mom not have the means via credit and some interest to buy her babies medicine that it needs to survive.

Compaies deforesting the amazon dont take loans from credit card companies. They take loans from banks. the bank may have a credit card arm. Dont get those confused.

CC companies make money on both the transactions (which I agree is a fair business practice) and on interest (which can be predatory).

Struggling single mothers is a symptom of greater problems in our society. CC debt is used to extend the problem rather than fix it. The problem exists both with and without CC debt.

Yes, CC are a single arm of a greater bank. I would say that Citi/Capital One/Chase/Etc are considered a CC company. You're right, technically they're a bank that has a CC arm, a loan arm, and maybe more. I'm not interested in interacting with them in any way.
It's like saying, I really like my gardener because he gives me a piece of chocolate at the end of every month. He intentionally hurts people for his own gain sometimes, but I really like the chocolate. So, I try not to think about other people and rationalize my actions.

 

[geoff995]

You cannot get 2% cash back from cash. Pay cards off monthly and you're not paying interest. In this regard, cash is second to credit in terms of debt. It's just common sense.

Exactly. 2% back on a full years purchases is a chunk of free money. Pay off the card each month. Pretty simple.

 

[CorbLand]

Yeah I should have seen that coming.

Eh, not like anyone has ran you over the coals for your choice. It’s always a good thing to get other peoples perspectives. Nothing wrong with using CCs and nothing wrong with not. Different strokes for different folks, even though I think your leaving a lot on the table by not.

 

[browning2480]

It depends, I set aside student loan payments every month, but they sit in a high yield savings account earning 3.4% interest. The day before interest starts being charged I will huck a lump sume at the highest interest rate student loan and be in a better position than someone who payed on them the entire time.

Now, if I decide to spend that money, then I am behind (unless it is on an emergency that would require debt at a higher interest rate).

Similarly, my savings account pays more than my truck loan charges, so not paying that off early, will work on the student loans and mortgage instead.

That said, I was debt free until 2 years ago and I will be glad to get back to being debt free. Of course, my mortgage is cheaper than my rent payments, so really the truck and student loans are what hurt.

As an example of why having debt is valuable, if I had chunked everything at paying down debt I would be going deeper in debt on less favorable terms at the moment as my daughter is about to have surgery. I much prefer knowing I can pay that bill when it comes ($5k deductible).

You are truly the exception and in reality you may not be paying the loan back, but you are saving it and will pay it when it is due. I completely get that, but most people won’t do that and will open up more debt.

Your last example is why it is important to have an emergency fund. You can pay for those emergencies and not use debt.

 

[MattB]

You're one of the exceptions and it wasn't a conventional retirement either.

Most corporate jobs don't do that...

Wasn’t a conventional retirement?

 

[Southeast]

I have never paid a dollar in credit card interest but I have used credit card points to purchase a lot of gear and trips. Three roundtrip flights to Alaska and the airline fee for a family of four to Florida come to mind, and that's just in the last 6 years.

If you're not disciplined enough to pay off your card monthly, don't get one. If you can manage it, they're fantastic.