Anyone who carries a balance on a credit card is financially illiterate

[Anonymous]

I joined the forum looking for advice on another topic and was just stunned at what I read here, so I felt I had to speak up.

It is a very broad, sweeping, and true generalization: Carrying credit card debt is destructive. Anyone who tells you different is not helping you. You are going to wind up paying a significant chunk of your paycheck to credit card interest -- a chunk of your paycheck that should be going into an IRA, paying down a mortgage, or topping up an emergency cash fund.

How are you going to save for your retirement carrying a balance on your credit card? Your retirement savings will be earning what, 4% to 8% returns? Meanwhile your credit card is running what, 10% on a very good card? More likely 20%? It's ridiculous.

Carrying credit card debt is just WRONG.

[Anonymous]

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@Anonymous wrote:

I joined the forum looking for advice on another topic and was just stunned at what I read here, so I felt I had to speak up.

It is a very broad, sweeping, and true generalization: Carrying credit card debt is destructive. Anyone who tells you different is not helping you. You are going to wind up paying a significant chunk of your paycheck to credit card interest -- a chunk of your paycheck that should be going into an IRA, paying down a mortgage, or topping up an emergency cash fund.

How are you going to save for your retirement carrying a balance on your credit card? Your retirement savings will be earning what, 4% to 8% returns? Meanwhile your credit card is running what, 10% on a very good card? More likely 20%? It's ridiculous.

Carrying credit card debt is just WRONG.

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Well if you had made this post instead of calling people illiterate I would have agreed with you but you didn't and there are times it is financially smart to carry a balance (0% APR)

[Anonymous]

0% APR is a trap. Did you read the fine print? If you have any charge go through on that card then the debt will be structured so the interest bearing portion of the debt gets paid LAST. And that will run at some enormous interest rate. You may be able to carefully manage it by putting that card in a drawer, but it's a financial landmine. The 0% deal will also expire at some point, and you will either have to kite the balance to another card or start paying the credit card interest. 

If because of dire circumstances (or plain bad judgement) you HAVE a huge balance, then sure, look around for the lowest rate you can get -- preferably 0 -- while you work really hard to pay it off. 

My point in starting this thread is that if you read this forum you can come away with the impression that carrying credit card debt, in any form, is OK. It's not OK.

[Anonymous]

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@Anonymous wrote:

I joined the forum looking for advice on another topic and was just stunned at what I read here, so I felt I had to speak up.

It is a very broad, sweeping, and true generalization: Carrying credit card debt is destructive. Anyone who tells you different is not helping you. You are going to wind up paying a significant chunk of your paycheck to credit card interest -- a chunk of your paycheck that should be going into an IRA, paying down a mortgage, or topping up an emergency cash fund.

How are you going to save for your retirement carrying a balance on your credit card? Your retirement savings will be earning what, 4% to 8% returns? Meanwhile your credit card is running what, 10% on a very good card? More likely 20%? It's ridiculous.

Carrying credit card debt is just WRONG.

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1. Only if you're paying interest. Believe me, I paid more than my fair share before actually learning my lesson.

2. Agreed, 5% of my day job's salary goes straight to my 401K (Work matches up to 5%), Wife's only matches up to 3%, so we fill in the other 7% with hers.

3. I bought my rental, and our home outright. No mortgage here. Emergency fund is set up, and growing.

4. I wish! My last 401K status update indicated a 0.4% return for the quarter, the wife's wasn't much better!

5. 14.24% is currently my best out of promo APR. I currently have 3 cards of my own with 0% promos, as does the wife. I think we're fine.

[chalupaman]

Something feels off here but I can't put my finger on it. 

[Imperfectfuture]

Unless it's 0%. Um, where are you losing this part of the conversation? I like to apply for staggering 0% offer cards, then can float a month of expenses, or an emergency, and sock that money into investments, high interest savings. Yes, I do have the money to pay it off, but it WILL be payed off by the time the 0% is done. Oh the joy of good credit.

The rest of my cards either get paid before the statement cuts, or shortly thereafter. Since May 2013 (my first rebuild card) I have NOT PAID ONE EVEN TINY IOTA OF INTEREST. Cogitate on that.

[mongstradamus]

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@Anonymous wrote:

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@Anonymous wrote:

I joined the forum looking for advice on another topic and was just stunned at what I read here, so I felt I had to speak up.

It is a very broad, sweeping, and true generalization: Carrying credit card debt is destructive. Anyone who tells you different is not helping you. You are going to wind up paying a significant chunk of your paycheck to credit card interest -- a chunk of your paycheck that should be going into an IRA, paying down a mortgage, or topping up an emergency cash fund.

How are you going to save for your retirement carrying a balance on your credit card? Your retirement savings will be earning what, 4% to 8% returns? Meanwhile your credit card is running what, 10% on a very good card? More likely 20%? It's ridiculous.

Carrying credit card debt is just WRONG.

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1. Only if you're paying interest. Believe me, I paid more than my fair share before actually learning my lesson.

2. Agreed, 5% of my day job's salary goes straight to my 401K (Work matches up to 5%), Wife's only matches up to 3%, so we fill in the other 7% with hers.

3. I bought my rental, and our home outright. No mortgage here. Emergency fund is set up, and growing.

4. I wish! My last 401K status update indicated a 0.4% return for the quarter, the wife's wasn't much better!

5. 14.24% is currently my best out of promo APR. I currently have 3 cards of my own with 0% promos, as does the wife. I think we're fine.

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where is your ira !!! :-)

[core]

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@lhcole77 wrote:

What precipitated you starting this thread?

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 I think hour 3 of the Dave Ramsey show just ended out there on the west coast.

[Anonymous]

I'm going to say one last thing and then off to bed.  First, welcome to the U.S. and I wish you well in your quest to buy a house.  I'm not sure how old you are or your overall situation but there are times in people's lives when they may face a truly dire circumstance like going thru a horrible divorce, losing their job thru no fault of their own or God forbid have a child have a serious health issue that may lead to a temporary need to carry a credit card balance to be able to cover life necessities.  Yes if you are carrying credit card balance on high interest CCs as a general practice you are doing yourself great harm but I'll be damned if I'm going to tell someone that has to use a credit card to feed their children because they lost their job and has to carry a balance for a short term, illiterate.  

[Imperfectfuture]

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@core wrote:

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@lhcole77 wrote:

What precipitated you starting this thread?

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 I think hour 3 of the Dave Ramsey show just ended out there on the west coast.

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LOL, I missed it, dang.