Should I edit this reply to shoot you down again?
"Yeah, it's just like a savings account!" Show me where I or the OP said JUST/exactly.
This is true, I was stuck on the $1000 bank account and just ran with it w/o looking at the bigger picture.
Should I edit this reply to shoot you down again?
"Yeah, it's just like a savings account!" Show me where I or the OP said JUST/exactly.
This is true, I was stuck on the $1000 bank account and just ran with it w/o looking at the bigger picture.
1000+1000=2000x12%=240
You ma'am, are an epic failure.
Thanks for playing, good luck next time.
Oh, you didnt use ( )'s... tisk tisk, it would help make your point more clear. Let ME edit YOUR quote to make YOUR equations mathmatically correct.
Now that I've done that for you. Did you read the thread or just the part that I said you failed? If you had you'd see I dont view the 1% as any sort of savings account but that I see it as a discount I get at the end of the month. Also we all spend money no matter what, so we dont dump 12,000$ away to get $120. We spend money we were going to spend anyways but we get 1% back (5% at gas stations and supermarkets).
"No, you fail.
$120 on $12,000 of purchases is still 1%, not 12%. "
True.
I got caught up in an incorrect thought process, oh well.
Let's say Mr. Y's bills are $1000/mo and he earns 12,000/yr. He can put 12,000 into a 5% APY bank and have his bills paid through online payments directly from his savings account. Or he can have his money in a 0% checking account but pay all his bills w/ a credit card that gives 1% back on everything. In that sense its more like a 12% savings account but that's just a scenario I just made up that isn't realistic at all.
1% is 1%.
Thats a real rebuttle. I was caught up in the whole $1000 hypothetical savings account too. 1% is 1% but oh well. her209, quote that and call it a day.
1% isnt negligible though. Businesses look into why they lose 1% of their customers. A 1% change in our GNP catches a lot of peoples attention.
Ok, now that your premise has been utterly debunked you look to salvage this disaster of a thread by claiming you never said the two were "exactly" (whatever the hell that means)?
Lame.
If you put 10k into a 12% savings account, you get back 1200(ish) in a year, right?
If you spend 10k in a month, you get 100$ back for that month on a card that gives you 1% cash back.
How is that (much) different?
Edit: I realize you have to spend 120k to get the equivalent "interest", but I am talking about money you would be spending anyway is like having (money spent in a year on credit card)/12 in a 12% APY account...
should i complete the sentence as such: "Show me where I or the OP said JUST/exactly in any of our posts"? should i use capitalizations? should you use common sense to finish people's incomplete sentences?
Golgatha
Lifer
- Jul 18, 2003
- 12,424
- 1,110
- 126
It's kind of an apples and oranges comparison really.
However, if you're going to spend $1,000 anyway on bills and other needs anyway; the cash back you get is nearly equal to the interest on $1,000 in a savings account at 12% interest rate for an entire year. Actually it is probably a bit more than 12% in a savings account because you pay taxes on the earned interest income. 1099-INT form I believe.
By all of this (warped?) logic, I'm making a whopping 36% per year on my Chase Visa for eating out, gas station, and grocery purchases! If you're responsible enough to pay the balance every month, it really is free money for you. I really think anyone responsible enough to pay their balance every month is crazy for not using credit cards for nearly everything they buy. I know my cash transactions don't earn 3% or even 1% back every month.
Even though I understand what the OP meant and what Special K meant, my brain is going to explode unless someone tells me who is the epic failure in this thread. Sorry, I mean who EXACTLY is the epic failure. Can we go through a formal nomination process please?
Oh crap, I think I just became the defacto epic failure by posting this.
Oh crap, I think I just became the defacto epic failure by posting this.
dullard
Elite Member
- May 21, 2001
- 26,185
- 4,844
- 126
I'll attempt to bring the two sides together.
[*]The median amount that US citizens have saved in liquid form is roughly 2 months of living expenses.
[*]Lets assume a person keeps that level of savings (since our median savings rate is right near zero anyways). Thus, the person stays at 2 months of living expenses saved in banks / CDs / money market accounts.
Savings
[*]This person therefore earns 2*X*I/12 per month on the liquid savings. Where X is their monthly living expenses and I is the interest rate.
[*]Lets suppose that I = 6%, thus the person earns X/100 each month from the savings account(s).
Credit card
[*]If the person uses a standard (no rewards) credit card or cash or checks or debit card, they get nothing back each month.
[*]But if that person switches to a 1% reward credit card, s/he will get money each month.
[*]How much money? Well, if s/he can use the credit card for every living expense, then the amount earned is X*1% = X/100 each month.
[*]See how the switch is the same as they got on the median savings amount? This is what the OP was TRYING to say (but he was off by a factor of 2). Also the OP didn't state it very well.
Plus, there is a big flaw. About half of living expenses are not chargable on credit cards (mortgage for example).
Thus, in reality, the median person who switches all of his/her applicable monthly expenses to a 1% rewards card earns the same amount as he/she earns with the median savings amount at 3% interest.
The OP stated this very poorly. Plus, he was off by a factor of 2-4. But, his point remains a valid point. Take the 5 minutes to fill out a credit card application (with rewards and no annual fees) and you can earn a lot. How much will you earn? Well, the typical person can earn as much as their median savings is earning at 3%-6% interest rates depending on how much of their spending can be put on the credit card. Do this with a 3% or 5% cash back card and you are doing even better.
I know for a fact that I get more rewards with my 3% cash back than I earn in savings interest even if I had a 12% interest rate on my savings.
I hereby give the OP an epic failure mark for not explaining the situation clearly. I also give epic failure marks to everyone arguing against him since they failed to read between the lines when it was so easy to read between the lines. I give myself an epic failure mark for entering this hornet's nest. I give Edro an epic win for making sense out of the OP while posting non-flamatory and acurate advice.
[*]The median amount that US citizens have saved in liquid form is roughly 2 months of living expenses.
[*]Lets assume a person keeps that level of savings (since our median savings rate is right near zero anyways). Thus, the person stays at 2 months of living expenses saved in banks / CDs / money market accounts.
Savings
[*]This person therefore earns 2*X*I/12 per month on the liquid savings. Where X is their monthly living expenses and I is the interest rate.
[*]Lets suppose that I = 6%, thus the person earns X/100 each month from the savings account(s).
Credit card
[*]If the person uses a standard (no rewards) credit card or cash or checks or debit card, they get nothing back each month.
[*]But if that person switches to a 1% reward credit card, s/he will get money each month.
[*]How much money? Well, if s/he can use the credit card for every living expense, then the amount earned is X*1% = X/100 each month.
[*]See how the switch is the same as they got on the median savings amount? This is what the OP was TRYING to say (but he was off by a factor of 2). Also the OP didn't state it very well.
Plus, there is a big flaw. About half of living expenses are not chargable on credit cards (mortgage for example).
Thus, in reality, the median person who switches all of his/her applicable monthly expenses to a 1% rewards card earns the same amount as he/she earns with the median savings amount at 3% interest.
The OP stated this very poorly. Plus, he was off by a factor of 2-4. But, his point remains a valid point. Take the 5 minutes to fill out a credit card application (with rewards and no annual fees) and you can earn a lot. How much will you earn? Well, the typical person can earn as much as their median savings is earning at 3%-6% interest rates depending on how much of their spending can be put on the credit card. Do this with a 3% or 5% cash back card and you are doing even better.
I know for a fact that I get more rewards with my 3% cash back than I earn in savings interest even if I had a 12% interest rate on my savings.
I hereby give the OP an epic failure mark for not explaining the situation clearly. I also give epic failure marks to everyone arguing against him since they failed to read between the lines when it was so easy to read between the lines. I give myself an epic failure mark for entering this hornet's nest. I give Edro an epic win for making sense out of the OP while posting non-flamatory and acurate advice.
I failed to look at the situation critically and ran w/ what the OP's logic/thought process.
I'll give myself an epic failure.
(you dont get to respend the exact same 1000/mo so cant draw parallels)
I'll give myself an epic failure.
(you dont get to respend the exact same 1000/mo so cant draw parallels)
hanoverphist
Diamond Member
- Dec 7, 2006
- 9,867
- 23
- 76
now do that every month. i love flawed logic, and as flawed as the whole scenario is, $120 is pretty damn close to $126 of course you had to spend 12000 to get that 120 bucks... therein lies the flaw
Originally posted by: hanoverphist
now do that every month. i love flawed logic, and as flawed as the whole scenario is, $120 is pretty damn close to $126 of course you had to spend 12000 to get that 120 bucks... therein lies the flaw
Did you read my second post? I and several other posters already pointed that out.
hanoverphist
Diamond Member
- Dec 7, 2006
- 9,867
- 23
- 76
Originally posted by: Special K
Originally posted by: hanoverphist
now do that every month. i love flawed logic, and as flawed as the whole scenario is, $120 is pretty damn close to $126 of course you had to spend 12000 to get that 120 bucks... therein lies the flaw
Did you read my second post? I and several other posters already pointed that out.
unfortunately i read them in order, after typing that post. late info, and probably useless addition.
Capt Caveman
Lifer
- Jan 30, 2005
- 34,543
- 651
- 126
Actually, there are many cases where you can. My school has an ID that you can a credit card to fund. At the end of the year, you can then get a refund on the balance. Theoretically, you could pull all your savings and throw $10k onto the card to get the 3% cash back and get that money returned to you minus $10 the very next day.
OP fails, but sutahz EPIC FAILS.
sutahz, you fail due to the fact that you have to resort to nit picking ppl's replies like you did with the word "just". You completely missed the point of her209's posts and continued to make yourself look like an ass/idiot.
Umm...you DO realize you just wrote 1000+1000 = 2000x12% = 240 right? So 2000 = 2000x12%? You really FAIL. Also, you DON'T NEED (). It's implied that you do multiplication first and then addition. You are such a moron.
sutahz, you fail due to the fact that you have to resort to nit picking ppl's replies like you did with the word "just". You completely missed the point of her209's posts and continued to make yourself look like an ass/idiot.
Umm...you DO realize you just wrote 1000+1000 = 2000x12% = 240 right? So 2000 = 2000x12%? You really FAIL. Also, you DON'T NEED (). It's implied that you do multiplication first and then addition. You are such a moron.
Just to clarify as simply as possible here is what the truth is:
Correct Answer: a 1% cash back is the same as a 1% intrest savings account (negating small amounts of interest due to different compounding schemes)
Wrong Answer: anything else
Correct Answer: a 1% cash back is the same as a 1% intrest savings account (negating small amounts of interest due to different compounding schemes)
Wrong Answer: anything else
lol you are adding adjectives. Bottom line: the op said it is like having one. It's not.
yes, FINANCOWNED!!!
Evadman
Administrator Emeritus<br>Elite Member
- Feb 18, 2001
- 30,990
- 5
- 81
this thread is why I have such high hopes for ATOT. Soon, we will be the physics, financial, mathematical, and health center of the internet. Of course, that is only if ATOT is the only site on the 'net, but dammit, we will be the center of it all!
I agree.
Credit Card: $1000/month = $12000 spent. 1% cash back = $120 back.
Savings Acct: $12,000 initial depo. 1 year later @ 1% APY = $120 interest (barring any daily compounded for simplification).
my average monthly bill is ~3000. All paychecks are deposited into an HSBC savings account (only earning 3% now but was up to ~5% last summer) When it comes time to pay the bill I just move the money into my checking acc. and pay it electronically.
I was saving ~90 a month for those three months while earning interest from whats in the savings account. For almost zero work on my part im being paid to use their card, and being paid anything by a CC is good in my book.
TRENDING THREADS
-
Discussion Zen 5 Speculation (EPYC Turin and Strix Point/Granite Ridge - Ryzen 9000)- Started by DisEnchantment
- Replies: 25K
-
Discussion Intel Meteor, Arrow, Lunar & Panther Lakes + WCL Discussion Threads
- Started by Tigerick
- Replies: 23K
-
Discussion Intel current and future Lakes & Rapids thread- Started by TheF34RChannel
- Replies: 23K
-
-
Facebook
Twitter