How are people this bad with money?

[Xonim]

The "never use CC's, EVER!" rule is another one people will take a hard line with. It's popped up more than a few times right here in ATOT.

This one baffles me too. I mean, I get that some people just are incapable of using credit cards without running them to the max and then wondering why their estimated payoff is measured in decades. But for someone that can maintain a zero balance and play the multiple-card rewards game, the rewards can be pretty sizeable.

Last year with just two cards, my wife and I had ~$600 in cash back. This year so far in rewards and signup bonuses (we added 2 cards), we're already close to $1k cash value, significantly more than that if we redeem them for airline tickets (as we're planning to for a wedding we're attending in the spring) by transferring 1:1 to Southwest or United.

Haven't paid a cent of interest in years, and have gotten $3k+ back in the last 3-4 years. But nope, you should never use credit cards.

 

[Spungo]

One time a couple years ago I had a neighbor that needed a new graphics card and PSU so he could play wow. He went and borrowed money from a payday place so he could get 200 or whatever it was. I don't know what that loan cost, but he wouldn't even wait till the end of the week when he actually had the money.

Credit card companies will give credit cards to almost anyone, and they even give something like 20 days to pay it back without needing to pay any interest. Needing to rely on a payday loan means your credit is fuuuuuuuuuuuucked. You know you're doing something wrong when a company will give a credit card do your dog or your dead relatively but they won't give one to you.

 

[alkemyst]

As sourceninja said, you negotiate the price before any mention of financing comes into play. Also, there are times when a dealership just needs to move inventory and thus is willing to put the no/low rate financing out there to stimulate sales.

However, financing does force you to fully insure the car, which costs more, although on a new or fairly new car, you probably are looking to fully insure for at least a little while.

Most people that would pay cash would fully insure as well. It's not so much the comp and collision at that stage but by having assets you want 100/300/100 or better coverage.

 

[IHateMyJob2004]

Wow, with such great example of how this guy spends money ..... dumb thread.

 

[Svnla]

This one baffles me too. I mean, I get that some people just are incapable of using credit cards without running them to the max and then wondering why their estimated payoff is measured in decades. But for someone that can maintain a zero balance and play the multiple-card rewards game, the rewards can be pretty sizeable.

Last year with just two cards, my wife and I had ~$600 in cash back. This year so far in rewards and signup bonuses (we added 2 cards), we're already close to $1k cash value, significantly more than that if we redeem them for airline tickets (as we're planning to for a wedding we're attending in the spring) by transferring 1:1 to Southwest or United.

Haven't paid a cent of interest in years, and have gotten $3k+ back in the last 3-4 years. But nope, you should never use credit cards.

Also, if you have good to great credit score, you can play the bonus games with CC companies and banks.

For example within the last few years, I scored 100K points with American Express card and will sell them for over $1K, profit of at least $600 after the annual fee of $450. Then the cash bonus from BoA, Regions, Capital One, and on and on.

2% cashback with everything from Schwab CC, I was earning a few hundreds dollars a month from my own spending plus my business expenses until they shut it down.

Plus 5% rotating cash back categories from Chase and use CC's as my own 30 days free loan to buy FAR (Free After Rebate) items from several places. I can sell those FAR items for cold hard cash for even more money.

I also open multiple checking accounts from many banks to earn bonus money, from $125 to $200 per account then close them after 6 months. Rinse, repeat, profit.

Bottom line: if you have the discipline and some brain, you CAN earn some cold hard cash from CC's and banks. The sky is the limit.

A fool and his money will soon parted - old proverb.

 

[jagec]

Most people that would pay cash would fully insure as well. It's not so much the comp and collision at that stage but by having assets you want 100/300/100 or better coverage.

Plus, by the time you're at that stage of your life your premiums really aren't THAT much higher for the top-end coverage.

 

[Xonim]

Also, if you have good to great credit score, you can play the bonus games with CC companies and banks.

For example within the last few years, I scored 100K points with American Express card and will sell them for over $1K, profit of at least $600 after the annual fee of $450. Then the cash bonus from BoA, Regions, Capital One, and on and on.

We got the sapphire preferred a few weeks ago for that reason. Have a trip next April I don't feel like paying for. Transferred to Southwest, the sign up bonus alone is worth $750-800.

2% cashback with everything from Schwab CC, I was earning a few hundreds dollars a month from my own spending plus my business expenses until they shut it down.

Our overall rewards rate is somewhere between 3 and 4% by using the AmEx BCP and Chase Freedom for everything we can. Might sign up for the Fidelity AmEx at some point for the 2% "other" purchases.

Plus 5% rotating cash back categories from Chase and use CC's as my own 30 days free loan to buy FAR (Free After Rebate) items from several places. I can sell those FAR items for cold hard cash for even more money.

I also open multiple checking accounts from many banks to earn bonus money, from $125 to $200 per account then close them after 6 months. Rinse, repeat, profit.

That sounds like to much effort, especially the rebate thing. Hah!

 

[alkemyst]

Plus, by the time you're at that stage of your life your premiums really aren't THAT much higher for the top-end coverage.

My credit is shot due to my mortgage situation. My top coverage vs bottom (my autos are worth over $70k), is about $50 bucks a month. That's three cars and none qualify for low mileage.

 

[xeemzor]

My credit is shot due to my mortgage situation. My top coverage vs bottom (my autos are worth over $70k), is about $50 bucks a month. That's three cars and none qualify for low mileage.

Why do you have $70k in cars if you can't afford your mortgage? A $5-10k older car is all you need. Clearly you were outspending your means.

 

[purbeast0]

Why do you have $70k in cars if you can't afford your mortgage? A $5-10k older car is all you need. Clearly you were outspending your means.

it says you joined in 2005, but clearly you are new here.

 

[alkemyst]

Why do you have $70k in cars if you can't afford your mortgage? A $5-10k older car is all you need. Clearly you were outspending your means.

I was paying my mortgage and can afford it. The bank screwed up with no applying my payments properly then reporting me late due to their error.

 

[Exterous]

A little late to the game but on our trip back from Europe today I was sitting behind two ladies who both had LV bags and were going on and on about what a fun time they had and all the nice things they bought. While waiting to deplane at the airport I was standing in the aisle and saw her pull up a couple of e-mails from her bank saying she had over drawn her account several times and had a balance of -$486. I can't even remember the last time we've overdrawn our account and certainly never by anywhere near that amount

 

[hans030390]

Well, quoted something to make a remark...found out someone said the same thing 3 pages back.

Oops, and never mind...

So, to post something on topic, I think the best thing when purchasing cars is to get a newer used car. I got a 2011 Ford Fusion SE for $11k, which is a steal for how nice of a car it is and the small little features (coming from a base model '95 Civic). I like having a newer car, but I also didn't want to spend outside of my means. And while it's not an investment I'll get a tangible return on, I'm planning on keeping the car for many years and already enjoy it enough to make it worth the $11k + interest I'm paying.

 

[JM Aggie08]

Well, quoted something to make a remark...found out someone said the same thing 3 pages back.

Oops, and never mind...

So, to post something on topic, I think the best thing when purchasing cars is to get a newer used car. I got a 2011 Ford Fusion SE for $11k, which is a steal for how nice of a car it is and the small little features (coming from a base model '95 Civic). I like having a newer car, but I also didn't want to spend outside of my means. And while it's not an investment I'll get a tangible return on, I'm planning on keeping the car for many years and already enjoy it enough to make it worth the $11k + interest I'm paying.

This.