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I get 5% on all gas purchases using my credit card. I don't buy any more gas than I would with cash. Each month we get back about $15-$20 for about a $200 savings per year. I just got a Fidelity Amex Card, which will give me 2% back on all of my other purchases besides gas. That money will go into my Fidelity account to be invested. We put groceries, our cable bill, restaurants, and hotels on our credit card. We spend about $1500-$2000 per month on our credit card not including our gasoline. This should give me another $400 or so per year to invest. So I get an extra $600 per year for swiping my card, in addition to loss protection, insurance, and a good record of my expenses. And yes, I have the cash to pay for all of it, but I prefer to take advantage of their great offers.
I see I see. I guess when you do it like that, there's benefit to it. I just feel like the less bills I pay the better, even if I have the cash
I do wonder if Dave Ramsey's company operates without a business line of credit, to cover the time gap to collect on accounts receivable. These lines of credits are normal for most (if not all businesses).
Isn't there also a safety benefit to having no credit history - since it will be tougher for identity thieves to borrow money in your name?
I've been living 'off the credit grid' (i.e. cash, check, or debit card for every purchase no matter how large and if I don't have the money, I can't afford it, no exceptions, end of story...) and I feel safer.
I'm also not raising everyone else's prices by making merchants pay CC fees to subsidize my 'rewards' as I feel ethically queasy about such a practice (but feel free to counter-argue)...
Isn't there also a safety benefit to having no credit history - since it will be tougher for identity thieves to borrow money in your name?
I've been living 'off the credit grid' (i.e. cash, check, or debit card for every purchase no matter how large and if I don't have the money, I can't afford it, no exceptions, end of story...) and I feel safer.
I'm also not raising everyone else's prices by making merchants pay CC fees to subsidize my 'rewards' as I feel ethically queasy about such a practice (but feel free to counter-argue)...
No argument here -- there's nothing wrong with what you are doing, but ...
Understand that only using a debit card has its own challenges. You can get your number skimmed, or your card stolen and they can take all your cash out of your checking AND savings, if your accounts are linked. You will get very probably all of it back, but it might not be right away, and they might not give it all back. I've seen both happen, one from a stolen card that got cloned many times, and a few that were skimmed, and reproduced many times. Charges were winging in from all over the world in hours.
My suggestion? Make sure you keep the bulk of your banked money in a separate savings account NOT linked to your debit card. Also -- if you have savings overdraft protection -- ditch it. A crook can overdraw your account and get access to your savings that way. Online, you can link up the savings and checking so you can transfer in and out of accounts, but only YOU can do it, and your card has nothing to do with it.
Also know that renting a car or a hotel room will also place a large block on your account. You might not be able to access your money or buy anything at that time, so plan accordingly -- carry cash or travelers checks (which I think is now a prepaid debit card?).
My sister walked away from credit cards years ago and she's never looked back. And all those perks people talk about? A number of banks have debit cards that give you cash back, too. You can be part of the perked!
Are you really earning so many rewards that you choose not to pay with cash that you already have?? Not worth the effort.
I agree with those who state it's no effort at all. I deduct the purchase from my checkbook at the time of purchase, as if it were a debit card, then pay in full each month. Right now I have $66 in Discover cash which I will use on Amazon (it transfers over as a payment method at check out) for Christmas presents, and I just flew my niece and I round trip to Chicago on points with my Southwest card. I make more on my credit cards than I do in any of my savings/money market accounts.
In response to the thread in general, you can't look at all of these financial "gurus" as universal experts with all of the answers preaching the "right way" to do things. They are not idiots nor are they 'wrong', but they are selling a targeted product to a targeted audience. Ramsey's approach doesn't fit the general consesnus of doing 'smart' things like using credit cards to maximize rewards and provide purchase protection. He also doesn't advocate leveraging debt properly to one's advantage. However, his program isn't targeted to people who are actually responsible with money to begin with. Ramsey's core audience is people who are horrible with money and simply can't control themselves. He knows that chances are someone in his core audience using a credit card the 'smart' way would simply lead to them racking up debt and getting in over their heads. The people in Ramsey's world need that strict view of finances to keep themselves on track.
The sooner you realize that "financial" people like Ramsey and Orman are actually "self-help/psychologist" people, then you will see why they deal out the advice they do. Poor financial habits are like poor diet habits. The end goal is to be "healthy". The impediment to getting healthy is not the act itself, as in correcting the bad habit, but in the underlying mental issue/state of mind that is leading to the bad habit. It is ultimately more about the overall approach and way the message is delivered than it is about the nuts and bolts of getting there. So, whether you are correcting your finances or trying to lose weight, it's not about how you use your credit cards or what supplements you take, but about changing your mental outlook on the situation. This is why Ramsey doesn't work for everyone and neither does NutriSystem.
his advice seems insane to post boomer people but 50 years ago it was every day across the coffee table talk.
as to paying off debt i scrubbed toilets at night plus a high stress day job to pay off my 95k divorce in 3.5 years. dont say its impossible. quadruple payments and lots of tortilla and bean meals.
as to rich people being unable to pay off their debt i understand that, crazy rich people spending lots more than they make, that was the basis of my divorce.
No argument here -- there's nothing wrong with what you are doing, but ...
Understand that only using a debit card has its own challenges. You can get your number skimmed, or your card stolen and they can take all your cash out of your checking AND savings, if your accounts are linked. You will get very probably all of it back, but it might not be right away, and they might not give it all back. I've seen both happen, one from a stolen card that got cloned many times, and a few that were skimmed, and reproduced many times. Charges were winging in from all over the world in hours.
My suggestion? Make sure you keep the bulk of your banked money in a separate savings account NOT linked to your debit card. Also -- if you have savings overdraft protection -- ditch it. A crook can overdraw your account and get access to your savings that way. Online, you can link up the savings and checking so you can transfer in and out of accounts, but only YOU can do it, and your card has nothing to do with it.
Also know that renting a car or a hotel room will also place a large block on your account. You might not be able to access your money or buy anything at that time, so plan accordingly -- carry cash or travelers checks (which I think is now a prepaid debit card?).
My sister walked away from credit cards years ago and she's never looked back. And all those perks people talk about? A number of banks have debit cards that give you cash back, too. You can be part of the perked!
I used to keep a lot of money in that account, but realized this risk and now most of it is spread out among several different investment and savings accounts, with no linkage. I don't usually have much more than 3 months' rent in checking, so I think I'm relatively safe. ( 3 months' rent makes moving much less of a headache if the landlord wants to sell the building or something, so I don't have to pull money out of any of the others...)
Dave Ramsey is the solution for people who are debt-oholics. He's a 12 step program for them.
I've never been in trouble with debt and will never be in trouble with debt. Therefore I don't get him either.... but I'm glad he's out there preaching to those that do.
I do get tired of the whole "black and white" context of the internet though. Most of us live in a gray world, where things aren't black and white, good or evil -- they're somewhere in the middle.... in the gray. It's a nice place to live.... people ought to try it more.
people snicker when they say 12 step but it appears to be what many americans need as to their debting.
as to american individual household debt -- its running very high at this point.
people think they are laid back about debt, but most are in fact laying down.
its like booze, they often say "i can handle it" but r talking the talk but not walking the walk.
people snicker when they say 12 step but it appears to be what many americans need as to their debting.
as to american individual household debt -- its running very high at this point.
people think they are laid back about debt, but most are in fact laying down.
its like booze, they often say "i can handle it" but r talking the talk but not walking the walk.
A while back I stopped caring about other people's money and debt. It's not my business, and frankly, I'm hard pressed to believe a lot of the stats out there. You know the saying -- there's lies, damned lies and statistics.
I've lived long enough to know that it's never as good as some people say, and REALLY never as bad as others say -- so debt isn't as high, and savings isn't as low. I heard on some news show there's billions of dollars in retirement funds in brokerage houses in this country.... and yet we're supposed to believe the average amount people hold in retirement is 25K? Really disparate numbers here.
The same thing with credit card debt -- I've heard average ranges from 2500 to 25000 average debt owed on credit cards.... well -- that's a big difference, so what is it?
I've sort of decided that the people that throw around statistics are skewing them to whatever their message is.... in short -- they are all lying to us. I'm sort of turned off by the whole process, so I've tuned them all out...because knowing these quasi-factoids does nothing to help me and my husband.
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