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

[lhcole77]

I disagree with some of what you have posted.

My retirement earned 12% last year. My debt was financed at 0% with occasional few dollars of interest here and there, plus 1-3% BT fee. 

The aggregate amount of interest/fees I paid last year was pennies on the dollar to what I saved and invested.

Is this the behavior of an illiterate person? Is it ridiculous?

[Anonymous]

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@mongstradamus wrote:

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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 !!! :-)

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Working on it. Once I have half a year's pre-tax household income saved up (Good for 1 year, we live below our means.), I'll excersise this option at the next available enrollment period.

[Turbobuick]

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@Anonymous wrote:

I know that the thread headline may sound disrespectful, and I apologize for any offense, but I think a blunt, tough message on that one is appropriate. I have been browsing these forums and I have been stunned to see people talking like this as if it is anything other than truly dire circumstances. 

Running a balance on a credit card is digging yourself into a hole. The interest rates are ludicrous.

Anyone who has a balance on their credit card, regardless of how low, should be figuring out how to get rid of that balance this month -- ideally by paying it down, if not, by taking out a loan at a better rate, or remortgaging. Once paid off you should never, ever carry a balance again.

Do people just not know this?

I pay off my credit card balance in full every month. I use the cards because they are a convenient way to pay, and I like earning the rewards points and such, but I would do anything possible to avoid carrying a balance.

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You are stating the obvious. Mostly your saying you've never been through any real adversity like not having a job or having one that barely makes ends meet. Piles of unpaid bills. Record rates of BK's simply from being sick. Yes, it is too easy to get in over ones head with credit. Even those that do get submerged in credit card debt know better. Some have no choice and others may have an addiction. For those living paycheck to paycheck, credit card debt is just one major setback away.

When today historically low interest rates begin to rise, and they will, those with cc debt will be in for a real shock. Those variable interest rates that are tied to prime rate or libor rate could skyrocket. The ever-popular rebate cards almost universally carry a higher interest rate than non-rebate cards. I was buying a house in the early 80's, prime was nearly 20%. It can happen.

[Anonymous]

For the record, while I happen to agree with the you, OP, and have never carried a balance on any credit card in my entire life, I do think you should reword your post so it reads a little more diplomatically. The post, while entertaining in its own flamebait way, is likely to incur the ire of the mods.

[Imperfectfuture]

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@Turbobuick wrote:

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@Anonymous wrote:

I know that the thread headline may sound disrespectful, and I apologize for any offense, but I think a blunt, tough message on that one is appropriate. I have been browsing these forums and I have been stunned to see people talking like this as if it is anything other than truly dire circumstances. 

Running a balance on a credit card is digging yourself into a hole. The interest rates are ludicrous.

Anyone who has a balance on their credit card, regardless of how low, should be figuring out how to get rid of that balance this month -- ideally by paying it down, if not, by taking out a loan at a better rate, or remortgaging. Once paid off you should never, ever carry a balance again.

Do people just not know this?

I pay off my credit card balance in full every month. I use the cards because they are a convenient way to pay, and I like earning the rewards points and such, but I would do anything possible to avoid carrying a balance.

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You are stating the obvious. Mostly your saying you've never been through any real adversity like not having a job or having one that barely makes ends meet. Piles of unpaid bills. Record rates of BK's simply from being sick. Yes, it is too easy to get in over ones head with credit. Even those that do get submerged in credit card debt know better. Some have no choice and others may have an addiction. For those living paycheck to paycheck, credit card debt is just one major setback away.

When today historically low interest rates begin to rise, and they will, those with cc debt will be in for a real shock. Those variable interest rates that are tied to prime rate or libor rate could skyrocket. The ever-popular rebate cards almost universally carry a higher interest rate than non-rebate cards. I was buying a house in the early 80's, prime was nearly 20%. It can happen.

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I remember then, and the 12% + student loans.

[Anonymous]

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@Turbobuick wrote:

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@Anonymous wrote:

I know that the thread headline may sound disrespectful, and I apologize for any offense, but I think a blunt, tough message on that one is appropriate. I have been browsing these forums and I have been stunned to see people talking like this as if it is anything other than truly dire circumstances. 

Running a balance on a credit card is digging yourself into a hole. The interest rates are ludicrous.

Anyone who has a balance on their credit card, regardless of how low, should be figuring out how to get rid of that balance this month -- ideally by paying it down, if not, by taking out a loan at a better rate, or remortgaging. Once paid off you should never, ever carry a balance again.

Do people just not know this?

I pay off my credit card balance in full every month. I use the cards because they are a convenient way to pay, and I like earning the rewards points and such, but I would do anything possible to avoid carrying a balance.

---

You are stating the obvious. Mostly your saying you've never been through any real adversity like not having a job or having one that barely makes ends meet. Piles of unpaid bills. Record rates of BK's simply from being sick. Yes, it is too easy to get in over ones head with credit. Even those that do get submerged in credit card debt know better. Some have no choice and others may have an addiction. For those living paycheck to paycheck, credit card debt is just one major setback away.

When today historically low interest rates begin to rise, and they will, those with cc debt will be in for a real shock. Those variable interest rates that are tied to prime rate or libor rate could skyrocket. The ever-popular rebate cards almost universally carry a higher interest rate than non-rebate cards. I was buying a house in the early 80's, prime was nearly 20%. It can happen.

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Geez, You weren't kidding. Prime rate topped out in December 1980 at 21.50%

[Anonymous]

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@Anonymous wrote:

I know that the thread headline may sound disrespectful, and I apologize for any offense, but I think a blunt, tough message on that one is appropriate. I have been browsing these forums and I have been stunned to see people talking like this as if it is anything other than truly dire circumstances. 

Running a balance on a credit card is digging yourself into a hole. The interest rates are ludicrous.

Anyone who has a balance on their credit card, regardless of how low, should be figuring out how to get rid of that balance this month -- ideally by paying it down, if not, by taking out a loan at a better rate, or remortgaging. Once paid off you should never, ever carry a balance again.

Do people just not know this?

I pay off my credit card balance in full every month. I use the cards because they are a convenient way to pay, and I like earning the rewards points and such, but I would do anything possible to avoid carrying a balance.

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Wow, it's like I have one of them Canadian twins.  I have said the same thing, only in more polite terms, since I am way too sophisticated to bluntly tell people the truth of their ways.  But, good for you.  ,

It's not going to work, though.  People are going to come up with every ridiculous contrived circumstance to pretend there are valid scenarios where credit card debt is the way to go... That's why every fourth threadin this forum is about APR... and where is the next 0% APR promotion...

It's like people with a gambling problem asking you where is the closest casino.  You advice them not to gamble.  They respond, "Don't worry.  What I do is not gambling.  You see, I have a system..."  This board has many, many people with credit debt, but you shouldn't worry about them, believe me, they also have a "system"...

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

I know that the thread headline may sound disrespectful, and I apologize for any offense, but I think a blunt, tough message on that one is appropriate. I have been browsing these forums and I have been stunned to see people talking like this as if it is anything other than truly dire circumstances. 

Running a balance on a credit card is digging yourself into a hole. The interest rates are ludicrous.

Anyone who has a balance on their credit card, regardless of how low, should be figuring out how to get rid of that balance this month -- ideally by paying it down, if not, by taking out a loan at a better rate, or remortgaging. Once paid off you should never, ever carry a balance again.

Do people just not know this?

I pay off my credit card balance in full every month. I use the cards because they are a convenient way to pay, and I like earning the rewards points and such, but I would do anything possible to avoid carrying a balance.

---

Wow, it's like I have one of them Canadian twins.  I have said the same thing, only in more polite terms, since I am way too sophisticated to bluntly tell people the truth of their ways.  But, good for you.  ,

It's not going to work, though.  People are going to come up with every ridiculous contrived circumstance to pretend there are valid scenarios where credit card debt is the way to go... That's why every fourth threadin this forum is about APR... and where is the next 0% APR promotion...

It's like people with a gambling problem asking you where is the closest casino.  You advice them not to gamble.  They respond, "Don't worry.  What I do is not gambling.  You see, I have a system..."  This board has many, many people with credit debt, but you shouldn't worry about them, believe me, they also have a "system"...

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I have lots of systems.

[Imperfectfuture]

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@Anonymous wrote:

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@Anonymous wrote:

---

@Anonymous wrote:

I know that the thread headline may sound disrespectful, and I apologize for any offense, but I think a blunt, tough message on that one is appropriate. I have been browsing these forums and I have been stunned to see people talking like this as if it is anything other than truly dire circumstances. 

Running a balance on a credit card is digging yourself into a hole. The interest rates are ludicrous.

Anyone who has a balance on their credit card, regardless of how low, should be figuring out how to get rid of that balance this month -- ideally by paying it down, if not, by taking out a loan at a better rate, or remortgaging. Once paid off you should never, ever carry a balance again.

Do people just not know this?

I pay off my credit card balance in full every month. I use the cards because they are a convenient way to pay, and I like earning the rewards points and such, but I would do anything possible to avoid carrying a balance.

---

Wow, it's like I have one of them Canadian twins.  I have said the same thing, only in more polite terms, since I am way too sophisticated to bluntly tell people the truth of their ways.  But, good for you.  ,

It's not going to work, though.  People are going to come up with every ridiculous contrived circumstance to pretend there are valid scenarios where credit card debt is the way to go... That's why every fourth threadin this forum is about APR... and where is the next 0% APR promotion...

It's like people with a gambling problem asking you where is the closest casino.  You advice them not to gamble.  They respond, "Don't worry.  What I do is not gambling.  You see, I have a system..."  This board has many, many people with credit debt, but you shouldn't worry about them, believe me, they also have a "system"...

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I have lots of systems.

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I have a few. 

[chwebb1]

At the risk of getting flamed, I don't completely agree with this. It's possible to have an unexpected expense pop up, and you don't want to dip into your savings account to pay it (for whatever reason). I have and will in the future pay small amounts of interest, although I will only use my Barclaycard Ring to do so (this was a big reason for getting this card for me, with another being the lack of FTFs). I don't feel that at 8% you're getting screwed as much as most cards with 11%+ APRs (my next lowest APR is 11.99% APR on my BOA BBR). It seems to me that for a few dollars per month, I've made way worse purchases than a little bit of interest on the Ring. But that's just my opinion. I personally only carry a balance for a couple of months before paying it off, only having a balance for less than half of the year on that card, just for when the unexpected happens.