Do you need a credit card?

[Xavier434]

Originally posted by: Beattie

It's fine to give the debit card to the waitstaff. If they steal the number and use it for offline transactions (check card) then the protection you get from the bank is exactly the same as a credit card as long as you dispute within 60 days. Secondly it takes 3 days for any transactions made on that check card to clear the bank, so you wouldn't be out any money to begin with.

A lot of banks have a next day guarantee that they will put the money back in your account for check card transactions. A thief can't make online (debit) transactions without your PIN. And even those will be reimbursed if they are fraudulent.

The biggest difference between a thief doing this sort of thing with your debit card vs a CC is that with a debit card the money is immediately removed from your checking account and in most cases it is gone for about 30 days because they have to do an investigation. Also, while it takes 1-3 days for a debit transaction to clear, that money still is not usable because the transaction immediately falls under "pending" status during this time which means it is not usable anymore. Unlike a CC where a charge takes place, but it really doesn't effect you because you can just leave it there until the investigation is complete and the charges are removed. I'll take the scenario where it feels like I never lost anything to begin with any day of the week and twice on Sunday.

 

[Beattie]

Originally posted by: ducci

Originally posted by: Beattie

Originally posted by: ducci
I'm not even going to get into the 0% interest for 12 month deals many cards offer.

Which is a terrible deal. If anything happens and you pay a bill late and universal default kicks in then they charge you the interest retroactively on the entire balance. Or maybe they "lose" your check and charge you that interest. What you gain, (basically nothing) is not worth the risk of someone else screwing up and costing you money.

So you don't trust the system? Are you sure you haven't had a bad experience with it? If you pay your bill on time (which you should be doing anyway), there is no risk. I wouldn't know about "losing" a check, as I pay everything online. What you gain is an interest free loan, which in my opinion is far, far from "basically nothing".

Again, I will reemphasize my point - money now is worth more than money tomorrow.

Money I have is worth more than money I don't have

Originally posted by: ducci

Originally posted by: Beattie

Originally posted by: ducci
There is no reason whatsoever to use a debit card over a credit card - and especially not using cash over a credit card (if for nothing else, the ability to easily track and document every purchase made is reason enough).

We already went over this and how a debit card is exactly the same as a credit card.

You didn't, really. Aside from claiming that your liability is the same (if within a 2 day period - hopefully you check your balance daily and have no pending payments within that period).

Credit cards give you a 30-day grace period. It is essentially a 0% interest loan so long as it is paid in full by the due date. Again, if you see no worth to that, you are clearly misinformed about investments. You also ignored the extended warranties on items (which debit cards do no have), as well as the ability to refuse payment of a charge for various reasons (poor service, faulty product, etc). Once the charge is made on a debit card it is money out of your pocket.

You're obviously set in your ways and if you can get by, more power to you. But be assured, credit cards are by far better than debit cards or cash. Credit is a great thing to build. Credit cards aren't the "best" way to do it (as I said, mortgages, car loans, student loans, etc are), but they help. You need to be independently wealthy, insanely frugal, or flat-out lucky to never be in a position where you need to pay for something which costs more than you have (home loan, car loan, medical bills, etc).

Ugh, you have 2 days OF LEARNING OF THE FRAUD. I don't know why reading comprehension here is so bad. You don't need to check your balance daily. When you discover it, that begins your 48 hours. And that only applies to debit transactions. If it's an offline (check card) transaction, you have the same 60 days as on a credit card. And if you lose money on a fraudulent check card transaction somehow, the bank has a next day guarantee that they will replace the money.

And are you seriously trying to make money on the what, 3% apr on the average of 15 days (half month) that you have money "borrowed" for "free" on a credit card? Man you are making money there. If you spent $1000 on a card every month the difference is like $15 a year. And then the one time in 10 years that something does get messed up and you get charged interest and a late fee wipes all that gain out.

 

[Special K]

Originally posted by: Beattie

Originally posted by: Special K

Originally posted by: Beattie

Originally posted by: Special K

Originally posted by: MattCo

Originally posted by: ducci

Originally posted by: Beattie
What? Do you not understand how money works? Wealth is the opposite of debt. I have no debt and a lot of wealth. This thread has been a bunch of people encouraging a young person to have debt.

And your assertion that my life is somehow more expensive than other peoples' is unsupported and in fact has been disproven a few times in this very thread.

Also, to comment on your "wealth is the opposite of debt" claim. That is not necessarily true. Debt is not always bad. The basic principal is very simple - money now is more valuable than money tomorrow. If I were to offer you $100,000 today at 2% APR, would you reject that offer merely because it would put you in $100,000 debt? If yes, then you need to reevaluate how you perceive investments.
:beer:

What if the investment you put that $100,000k in has a few bad months/years and you default on the big loan. Of course you could put some of it in more fluid investments, but the return might be less and the reward not so much.

It is all risk vs. reward, but there is risk.

There is no risk if you put the money in an FDIC-insured account. The trouble is coming up with a loan at a low enough interest rate such that you would actually make money on the spread between an FDIC-insured account and your loan.

For an example of this refer to the app-o-rama, although with the recent credit crunch and interest rate cutting bonanza, AORs are not nearly as attractive as they used to be.

Wait, you want to borrow money at 2 percent and save it in an FDIC insured savings account where you could make what, 3-4 percent? You are making less than inflation at that point.

In an AOR, you borrow the money at 0%.

I dont know what an AOR is and apparently neither does Google. Unless you are talking about Album oriented Rock. Please explain or provide links.

Text

I already posted the link in my previous post:

AOR = app-o-rama

You take advantage of credit cards' 0% balance transfer offers by depositing that money in an FDIC-insured account and holding it there for 12 months. When the credit card balances are due after 12 months, you pay them all back and pocket the interest.

 

[LtPage1]

I use my AmEx like a debit card. I pay it off every month.

 

[Beattie]

Originally posted by: Xavier434
You are misinterpreting the article. Yes, pretty much everything purchased with a CC falls under "bad debt". However, as long as you keep the balance on your CC below 33% of its maximum and you make regular payments, your FICO score will not be negatively effected. It will be positively effected because you are building history and showing that you are responsible enough to pay off your debt. Bad Debt does not always equal bad credit history.

It's important to remember that the way FICO scores are calculated and the things that lenders consider when determining who gets what kind of loan does make sense. It exists to determine how trustworthy "the other guy" will be in terms of paying back the money you are lending him. If someone has a recorded positive history with a lot of activity then it stands reason to believe that this person can be trusted more than a guy who has little to no history to base that trust on. This is also why credit history which is more than 7 years old (I might be slightly off there) does not get considered. The data is too old to be reliable.

I understand the article just fine. What you seem to have missed is that I don't care about "good" vs "bad" debt as I don't care about my fico score. And so, all debt is bad.

 

[Beattie]

Originally posted by: Special K

Originally posted by: Beattie

Originally posted by: Special K

Originally posted by: Beattie

Originally posted by: Special K

Originally posted by: MattCo

Originally posted by: ducci

Originally posted by: Beattie
What? Do you not understand how money works? Wealth is the opposite of debt. I have no debt and a lot of wealth. This thread has been a bunch of people encouraging a young person to have debt.

And your assertion that my life is somehow more expensive than other peoples' is unsupported and in fact has been disproven a few times in this very thread.

Also, to comment on your "wealth is the opposite of debt" claim. That is not necessarily true. Debt is not always bad. The basic principal is very simple - money now is more valuable than money tomorrow. If I were to offer you $100,000 today at 2% APR, would you reject that offer merely because it would put you in $100,000 debt? If yes, then you need to reevaluate how you perceive investments.
:beer:

What if the investment you put that $100,000k in has a few bad months/years and you default on the big loan. Of course you could put some of it in more fluid investments, but the return might be less and the reward not so much.

It is all risk vs. reward, but there is risk.

There is no risk if you put the money in an FDIC-insured account. The trouble is coming up with a loan at a low enough interest rate such that you would actually make money on the spread between an FDIC-insured account and your loan.

For an example of this refer to the app-o-rama, although with the recent credit crunch and interest rate cutting bonanza, AORs are not nearly as attractive as they used to be.

Wait, you want to borrow money at 2 percent and save it in an FDIC insured savings account where you could make what, 3-4 percent? You are making less than inflation at that point.

In an AOR, you borrow the money at 0%.

I dont know what an AOR is and apparently neither does Google. Unless you are talking about Album oriented Rock. Please explain or provide links.

Text

I already posted the link in my previous post:

AOR = app-o-rama

You take advantage of credit cards' 0% balance transfer offers by depositing that money in an FDIC-insured account and holding it there for 12 months. When the credit card balances are due after 12 months, you pay them all back and pocket the interest.

So, you do a lot of bookkeeping to make 3-4% and barely break even with inflation. After tax, you probably actually lose money.

Sounds awesome. Where do I sign up?

 

[TruePaige]

Originally posted by: Beattie

Originally posted by: ducci

Originally posted by: Beattie

Originally posted by: ducci
I'm not even going to get into the 0% interest for 12 month deals many cards offer.

Which is a terrible deal. If anything happens and you pay a bill late and universal default kicks in then they charge you the interest retroactively on the entire balance. Or maybe they "lose" your check and charge you that interest. What you gain, (basically nothing) is not worth the risk of someone else screwing up and costing you money.

So you don't trust the system? Are you sure you haven't had a bad experience with it? If you pay your bill on time (which you should be doing anyway), there is no risk. I wouldn't know about "losing" a check, as I pay everything online. What you gain is an interest free loan, which in my opinion is far, far from "basically nothing".

Again, I will reemphasize my point - money now is worth more than money tomorrow.

Money I have is worth more than money I don't have

Originally posted by: ducci

Originally posted by: Beattie

Originally posted by: ducci
There is no reason whatsoever to use a debit card over a credit card - and especially not using cash over a credit card (if for nothing else, the ability to easily track and document every purchase made is reason enough).

We already went over this and how a debit card is exactly the same as a credit card.

You didn't, really. Aside from claiming that your liability is the same (if within a 2 day period - hopefully you check your balance daily and have no pending payments within that period).

Credit cards give you a 30-day grace period. It is essentially a 0% interest loan so long as it is paid in full by the due date. Again, if you see no worth to that, you are clearly misinformed about investments. You also ignored the extended warranties on items (which debit cards do no have), as well as the ability to refuse payment of a charge for various reasons (poor service, faulty product, etc). Once the charge is made on a debit card it is money out of your pocket.

You're obviously set in your ways and if you can get by, more power to you. But be assured, credit cards are by far better than debit cards or cash. Credit is a great thing to build. Credit cards aren't the "best" way to do it (as I said, mortgages, car loans, student loans, etc are), but they help. You need to be independently wealthy, insanely frugal, or flat-out lucky to never be in a position where you need to pay for something which costs more than you have (home loan, car loan, medical bills, etc).

And are you seriously trying to make money on the what, 3% apr on the average of 15 days (half month) that you have money "borrowed" for "free" on a credit card? Man you are making money there. If you spent $1000 on a card every month the difference is like $15 a year. And then the one time in 10 years that something does get messed up and you get charged interest and a late fee wipes all that gain out.

I believe that using a money market fund to keep things liquid provides a great income supplement from your float. =)

 

[TruePaige]

Originally posted by: Beattie

Originally posted by: Special K

Originally posted by: Beattie

Originally posted by: Special K

Originally posted by: Beattie

Originally posted by: Special K

Originally posted by: MattCo

Originally posted by: ducci

Originally posted by: Beattie
What? Do you not understand how money works? Wealth is the opposite of debt. I have no debt and a lot of wealth. This thread has been a bunch of people encouraging a young person to have debt.

And your assertion that my life is somehow more expensive than other peoples' is unsupported and in fact has been disproven a few times in this very thread.

Also, to comment on your "wealth is the opposite of debt" claim. That is not necessarily true. Debt is not always bad. The basic principal is very simple - money now is more valuable than money tomorrow. If I were to offer you $100,000 today at 2% APR, would you reject that offer merely because it would put you in $100,000 debt? If yes, then you need to reevaluate how you perceive investments.
:beer:

What if the investment you put that $100,000k in has a few bad months/years and you default on the big loan. Of course you could put some of it in more fluid investments, but the return might be less and the reward not so much.

It is all risk vs. reward, but there is risk.

There is no risk if you put the money in an FDIC-insured account. The trouble is coming up with a loan at a low enough interest rate such that you would actually make money on the spread between an FDIC-insured account and your loan.

For an example of this refer to the app-o-rama, although with the recent credit crunch and interest rate cutting bonanza, AORs are not nearly as attractive as they used to be.

Wait, you want to borrow money at 2 percent and save it in an FDIC insured savings account where you could make what, 3-4 percent? You are making less than inflation at that point.

In an AOR, you borrow the money at 0%.

I dont know what an AOR is and apparently neither does Google. Unless you are talking about Album oriented Rock. Please explain or provide links.

Text

I already posted the link in my previous post:

AOR = app-o-rama

You take advantage of credit cards' 0% balance transfer offers by depositing that money in an FDIC-insured account and holding it there for 12 months. When the credit card balances are due after 12 months, you pay them all back and pocket the interest.

So, you do a lot of bookkeeping to make 3-4% and barely break even with inflation. After tax, you probably actually lose money.

Sounds awesome. Where do I sign up?

I don't think you know how tax works then, because that made no sense. There is no way that making interest off the money saved in the FDIC account and then paying it towards what you would of paid it towards anyway would lose money. 0.o

 

[spidey07]

Originally posted by: TruePaige
I believe that using a money market fund to keep things liquid provides a great income supplement from your float. =)

Yep, it's why using good debt can generate more wealth for you and it only gets bigger over time. Not using debt properly is literally throwing money away. You use debt to build wealth.

 

[TruePaige]

Originally posted by: spidey07

Originally posted by: TruePaige
I believe that using a money market fund to keep things liquid provides a great income supplement from your float. =)

Yep, it's why using good debt can generate more wealth for you and it only gets bigger over time. Not using debt properly is literally throwing money away. You use debt to build wealth.

Indeed! Because it takes money to make money.

Hell if I could take out a loan for 3 million dollars @ 2% for example, I would, because I'd be able to turn that into riches.

 

[oznerol]

Originally posted by: Beattie

Originally posted by: ducci
Again, I will reemphasize my point - money now is worth more than money tomorrow.

Money I have is worth more than money I don't have

I agree. Though everyone here isn't claiming to spend money you don't have - quite the contrary.

Say you have $1500 in cash to purchase a TV. Let's also say you are given a $1500 12-month, 0% interest loan. You are foolish to pay the $1500 you have now rather than using someone else's money and pay the balance in full 12 months from now. You can also add in whatever cash-back rewards most credit cards today offer.

I'm not claiming using a credit card will make you rich. I am merely saying it is better than paying via debit or cash.

I will, however, agree to the claim that properly using and controlling good debt will build wealth. More so than, say, not having any debt at all.

 

[Xavier434]

Originally posted by: Beattie

Originally posted by: Xavier434
You are misinterpreting the article. Yes, pretty much everything purchased with a CC falls under "bad debt". However, as long as you keep the balance on your CC below 33% of its maximum and you make regular payments, your FICO score will not be negatively effected. It will be positively effected because you are building history and showing that you are responsible enough to pay off your debt. Bad Debt does not always equal bad credit history.

It's important to remember that the way FICO scores are calculated and the things that lenders consider when determining who gets what kind of loan does make sense. It exists to determine how trustworthy "the other guy" will be in terms of paying back the money you are lending him. If someone has a recorded positive history with a lot of activity then it stands reason to believe that this person can be trusted more than a guy who has little to no history to base that trust on. This is also why credit history which is more than 7 years old (I might be slightly off there) does not get considered. The data is too old to be reliable.

I understand the article just fine. What you seem to have missed is that I don't care about "good" vs "bad" debt as I don't care about my fico score. And so, all debt is bad.

You are going to regret that the day you realize that you just are not getting the same rates and opportunities as someone with a good FICO score. I know you don't believe that, but trust me. It's going to happen sooner or later. Just because you can get a loan doesn't mean you are getting the best loan.

 

[Beattie]

Originally posted by: TruePaige

Originally posted by: Beattie
So, you do a lot of bookkeeping to make 3-4% and barely break even with inflation. After tax, you probably actually lose money.

Sounds awesome. Where do I sign up?

I don't think you know how tax works then, because that made no sense. There is no way that making interest off the money saved in the FDIC account and then paying it towards what you would of paid it towards anyway would lose money. 0.o

Lets say you earn 4% on your schemes. Now you are going to be taxed at your income rate on this money. Lets say that's like 30%. So, you gain 4% then lose 30% of that. In the mean time, inflation was 4%. So, you gained less than 4% and it cost you 4%. You net loss is 30% of 4%.

You lost money.

If you can get a better rate on the money then you might start to make something. But it's very small. And anywhere you would make a good profit like the stock market/mutual funds, you have to then also factor in risk.

 

[Xavier434]

Originally posted by: Beattie

Originally posted by: TruePaige

Originally posted by: Beattie
So, you do a lot of bookkeeping to make 3-4% and barely break even with inflation. After tax, you probably actually lose money.

Sounds awesome. Where do I sign up?

I don't think you know how tax works then, because that made no sense. There is no way that making interest off the money saved in the FDIC account and then paying it towards what you would of paid it towards anyway would lose money. 0.o

Lets say you earn 4% on your schemes. Now you are going to be taxed at your income rate on this money. Lets say that's like 30%. So, you gain 4% then lose 30% of that. In the mean time, inflation was 4%. So, you gained less than 4% and it cost you 4%. You net loss is 30% of 4%.

You lost money.

If you can get a better rate on the money then you might start to make something. But it's very small. And anywhere you would make a good profit like the stock market/mutual funds, you have to then also factor in risk.

You cannot gain wealth without taking risks, but if you educate yourself about those risks and how the system works then those risks will be very minimal. The people that get screwed are the ones who are either trying to use get rich quick methods or they dove nose first into something which they did not take the time to properly research. There is absolutely nothing wrong with taking risks if wealth is what you want to achieve.

 

[Beattie]

Originally posted by: ducci
I agree. Though everyone here isn't claiming to spend money you don't have - quite the contrary.

Say you have $1500 in cash to purchase a TV. Let's also say you are given a $1500 12-month, 0% interest loan. You are foolish to pay the $1500 you have now rather than using someone else's money and pay the balance in full 12 months from now. You can also add in whatever cash-back rewards most credit cards today offer.

I'm not claiming using a credit card will make you rich. I am merely saying it is better than paying via debit or cash.

I will, however, agree to the claim that properly using and controlling good debt will build wealth. More so than, say, not having any debt at all.

Until that one time where something happens and you default and that $1500 tv ends up costing $2100.

 

[Xavier434]

Originally posted by: Beattie

Originally posted by: ducci
I agree. Though everyone here isn't claiming to spend money you don't have - quite the contrary.

Say you have $1500 in cash to purchase a TV. Let's also say you are given a $1500 12-month, 0% interest loan. You are foolish to pay the $1500 you have now rather than using someone else's money and pay the balance in full 12 months from now. You can also add in whatever cash-back rewards most credit cards today offer.

I'm not claiming using a credit card will make you rich. I am merely saying it is better than paying via debit or cash.

I will, however, agree to the claim that properly using and controlling good debt will build wealth. More so than, say, not having any debt at all.

Until that one time where something happens and you default and that $1500 tv ends up costing $2100.

There are many ways around that situation including balance transfers and saving the money up before hand and just let it sit around until month 12 rolls around.

 

[TruePaige]

Originally posted by: Beattie

Originally posted by: TruePaige

Originally posted by: Beattie
So, you do a lot of bookkeeping to make 3-4% and barely break even with inflation. After tax, you probably actually lose money.

Sounds awesome. Where do I sign up?

I don't think you know how tax works then, because that made no sense. There is no way that making interest off the money saved in the FDIC account and then paying it towards what you would of paid it towards anyway would lose money. 0.o

Lets say you earn 4% on your schemes. Now you are going to be taxed at your income rate on this money. Lets say that's like 30%. So, you gain 4% then lose 30% of that. In the mean time, inflation was 4%. So, you gained less than 4% and it cost you 4%. You net loss is 30% of 4%.

You lost money.

If you can get a better rate on the money then you might start to make something. But it's very small. And anywhere you would make a good profit like the stock market/mutual funds, you have to then also factor in risk.

Okay, if you add inflation in and say that cancels out the gains, and 30% of the 4% (effectively 1.2%), then you are LOSING a LOT MORE by not doing anything with your money, because if your money is just sitting there you are losing the full 4% by not investing it.

 

[TruePaige]

Originally posted by: Beattie

Originally posted by: ducci
I agree. Though everyone here isn't claiming to spend money you don't have - quite the contrary.

Say you have $1500 in cash to purchase a TV. Let's also say you are given a $1500 12-month, 0% interest loan. You are foolish to pay the $1500 you have now rather than using someone else's money and pay the balance in full 12 months from now. You can also add in whatever cash-back rewards most credit cards today offer.

I'm not claiming using a credit card will make you rich. I am merely saying it is better than paying via debit or cash.

I will, however, agree to the claim that properly using and controlling good debt will build wealth. More so than, say, not having any debt at all.

Until that one time where something happens and you default and that $1500 tv ends up costing $2100.

What is this magic "Something" I pay my bills online and get a confirmation number 0.0

 

[FDF12389]

I got my first card the day I turned 18, started building credit right away, Im 19 now and just financed a car five years old with no money down and I'm only paying 5%, my best friend, is paying 11.9% on a very similar car from a lenders viewpoint and he is almost three years older than me, he doesn't have bad credit, he has no credit.

I still have the same card, and now I'm down to 10.9% on that, I have a 7,500 limit. Don't be afraid to go sit down with someone at the bank and explain yourself, I showed them I started college at 14, held an excellent GPA and handled my my checking account well for 4 years, they started me off with a 1K limit at 12.9%. After that I did my own research and learned how to raise my credit score, I suggest OP do the same.

 

[Xavier434]

Originally posted by: TruePaige

Originally posted by: Beattie

Originally posted by: ducci
I agree. Though everyone here isn't claiming to spend money you don't have - quite the contrary.

Say you have $1500 in cash to purchase a TV. Let's also say you are given a $1500 12-month, 0% interest loan. You are foolish to pay the $1500 you have now rather than using someone else's money and pay the balance in full 12 months from now. You can also add in whatever cash-back rewards most credit cards today offer.

I'm not claiming using a credit card will make you rich. I am merely saying it is better than paying via debit or cash.

I will, however, agree to the claim that properly using and controlling good debt will build wealth. More so than, say, not having any debt at all.

Until that one time where something happens and you default and that $1500 tv ends up costing $2100.

What is this magic "Something" I pay my bills online and get a confirmation number 0.0

I think he is talking about some big unexpected expense, but what he is failing to realize is that those who are responsible have money saved up for just that kind of occasion. On top of that, even if the unexpected expense is much larger than your savings can handle then it makes sense that one would place the additional expenses on a CC. That CC probably has a very low interest rate because you were smart enough to call annually and ask for that rate to be lowered which they do for you because your FICO and credit history is awesome thanks to your active and responsible usage of credit over many years.

 

[TruePaige]

This thread reminded me to do something.

Get an AMEX card. I have a 15 month 0% interest AMEX card on the way now. It's full of win. I like AMEX because they don't make you talk to third world country people when you call. 0.o

 

[TruePaige]

Originally posted by: Xavier434

Originally posted by: TruePaige

Originally posted by: Beattie

Originally posted by: ducci
I agree. Though everyone here isn't claiming to spend money you don't have - quite the contrary.

Say you have $1500 in cash to purchase a TV. Let's also say you are given a $1500 12-month, 0% interest loan. You are foolish to pay the $1500 you have now rather than using someone else's money and pay the balance in full 12 months from now. You can also add in whatever cash-back rewards most credit cards today offer.

I'm not claiming using a credit card will make you rich. I am merely saying it is better than paying via debit or cash.

I will, however, agree to the claim that properly using and controlling good debt will build wealth. More so than, say, not having any debt at all.

Until that one time where something happens and you default and that $1500 tv ends up costing $2100.

What is this magic "Something" I pay my bills online and get a confirmation number 0.0

I think he is talking about some big unexpected expense, but what he is failing to realize is that those who are responsible have money saved up for just that kind of occasion. On top of that, even if the unexpected expense is much larger than your savings can handle then it makes sense that one would place the additional expenses on a CC which has a very low interest rate because you were smart enough to call annually and ask for that rate to be lowered which they do for you because your FICO and credit history is awesome.

And if it were something that big, it would be great that one would have credit to carry them through that hardship in their life.

 

[oznerol]

Originally posted by: Beattie

Originally posted by: ducci
I agree. Though everyone here isn't claiming to spend money you don't have - quite the contrary.

Say you have $1500 in cash to purchase a TV. Let's also say you are given a $1500 12-month, 0% interest loan. You are foolish to pay the $1500 you have now rather than using someone else's money and pay the balance in full 12 months from now. You can also add in whatever cash-back rewards most credit cards today offer.

I'm not claiming using a credit card will make you rich. I am merely saying it is better than paying via debit or cash.

I will, however, agree to the claim that properly using and controlling good debt will build wealth. More so than, say, not having any debt at all.

Until that one time where something happens and you default and that $1500 tv ends up costing $2100.

Something happens meaning what? You need emergency funds for something? All the more reason to use credit rather than straight cash. Unless by something you mean human error, like forgetting to pay or paying late. If that's the case, you are to blame, not the credit card.

Again, are you sure you don't have bad experience with credit cards? 99% of the problems people have with credit are due to poor decisions made by the person, not the credit company. Granted, many argue credit companies give away too much credit to people who cannot afford it - this is debatable. Regardless, credit cards reward responsibility. If you cannot be responsible, you shouldn't be spending other people's money.

 

[Xavier434]

Originally posted by: TruePaige

Originally posted by: Xavier434

Originally posted by: TruePaige

What is this magic "Something" I pay my bills online and get a confirmation number 0.0

I think he is talking about some big unexpected expense, but what he is failing to realize is that those who are responsible have money saved up for just that kind of occasion. On top of that, even if the unexpected expense is much larger than your savings can handle then it makes sense that one would place the additional expenses on a CC which has a very low interest rate because you were smart enough to call annually and ask for that rate to be lowered which they do for you because your FICO and credit history is awesome.

And if it were something that big, it would be great that one would have credit to carry them through that hardship in their life.

:thumbsup:

Sure as hell beats being forced to beg for money from friends and relatives or ask for a personal loan from a bank which you will be denied since you don't have any credit. That or you can just file for bankruptcy which I hear is better than Disney World.

 

[Beattie]

Originally posted by: Xavier434

Originally posted by: Beattie

Originally posted by: TruePaige

Originally posted by: Beattie
So, you do a lot of bookkeeping to make 3-4% and barely break even with inflation. After tax, you probably actually lose money.

Sounds awesome. Where do I sign up?

I don't think you know how tax works then, because that made no sense. There is no way that making interest off the money saved in the FDIC account and then paying it towards what you would of paid it towards anyway would lose money. 0.o

Lets say you earn 4% on your schemes. Now you are going to be taxed at your income rate on this money. Lets say that's like 30%. So, you gain 4% then lose 30% of that. In the mean time, inflation was 4%. So, you gained less than 4% and it cost you 4%. You net loss is 30% of 4%.

You lost money.

If you can get a better rate on the money then you might start to make something. But it's very small. And anywhere you would make a good profit like the stock market/mutual funds, you have to then also factor in risk.

You cannot gain wealth without taking risks, but if you educate yourself about those risks and how the system works then those risks will be very minimal. The people that get screwed are the ones who are either trying to use get rich quick methods or they dove nose first into something which they did not take the time to properly research. There is absolutely nothing wrong with taking risks if wealth is what you want to achieve.

I have no problem with that statement but you still need to factor it in. Higher risk things can make you more money. And investing long term in them is the correct thing to do. I don't think that borrowing money to invest in what should be a long term investment is a good idea. If you do that AOR credit surfing thing that someone suggested, that might work for a year, but your mutual fund or whatever might have lost money in a year. Many did in this previous year for example.