@iced wrote:
@Anonymous wrote:
@sarge12 wrote:
@longtimelurker wrote:
@Anonymous wrote:
I only buy what I afford to pay off right away. I see CC the same as cash meaning if I don't have it in cash, I can't buy it. It's just easier form of payment and that's why I use cards. Some people see cards as buy now, worry later. That's a dangerous mindset.Trouble is, "what I can afford to pay off" isn't quite black and white. As mentioned earlier by someone, there is some research (with som detractors to be sure) that strongly suggest that credit cards, and particularly reward cards, tend to increase spending (partly because the reward is a discount, so I'll get two instead of 1 as it's cheap, or to get closer to threshold goals, like 150K UR for that trip)
So while someone may PIF each month like cash or a debit card, the spending level might be higher than otherwise, i.e. they are saving a little less. Now I'm sure we'll see some posts saying that their spending is EXACTLY the same as when they used cash. Maybe, or maybe not!
But at least for some, using credit cards like cash isn't totally harmless.
That may be the case for some people, but at least for me, I always know exactly to the penny where I stand. Using Quicken, with it being properly set up makes this easy enough to do. If at any time I ever get to where the outstanding balances on credit cards are even within 500 dollars of the balance in checking, I make no further charges. It is all a lot easier to keep up with when you pay bills the day the bills print, rather than waiting till the due date. If I pay any bill even close to the due date, it is because I slipped up because to me the due date is late. I know it is easier for me than many, because my income is not just a little over my expenses, my income is way over expenses. In fact, my actual necessities are less than a third of my income. So I can in fact say, I never ever pay for anything on a credit card that I do not have the funds sitting in my checking account to pay for...period! I have paid no interest on credit cards since 1996 at least, not 1 penny. I'll say again, if I can't drive it or live in it, I will not pay interest on a loan for it.
That's the best advice I've seen on here yet!!!
Better advice is don't finance cars unless the interest rate is 0.0% (i.e, you're not paying interest so does not apply to the above) or you're buying a cheap car and you're sufficiently low income that you can't come up with that much cash. A 10% loan beats 20% credit card interest. By cheap I mean you're getting a reliable but used beater to get to your job, not that new Lexus or Mercedes you think you just have to have.
Automobiles are horrible, horrible money pits, especially new ones. The thought that it's a good idea to finance a car has put far too many people behind the wheel of a car they don't need and/or can't afford. At least when people sink every penny they have to spare into a home, there's a reasonable chance of some long-term equity gain (or at least not much equity loss barring another housing implosion). With cars, the losses are pretty much guaranteed.
In 2016, the average income in the US was just under $60,000 and the average auto loan was just over $30,000 - that's HALF of the average annual gross income. That's not even factoring in insurance, gas, parking, and other auto-related incidentals. That's not a statistic to be proud of.
For heaven's sake. Why would anyone want to use a credit card to buy a car?! Do people who do that even think about the long-term financial consequences, or do they just go "gee whiz, I have a $25k limit on my super-duper metal signature limited-reserve Visa, I'll go ahead and just slap it down for that nice set of wheels"?
I know first-hand what money sinks automobiles can be. In 2006, when I was a lot less educated about financial matters than I am now, I bought a 2001 Ford Focus to replace my previous car which had been totaled (according to the insurance company anyway; it had had its left front bashed up by a pickup truck that turned right into me from the front without looking, and I'm convinced to this day the damage could have been repaired). It ran well enough at first but there were ongoing issues with the coolant and electrical/ignition systems that soon became obvious. I had to replace the battery three times in 11 years (well, maybe that's not so unusual); have the thermostat replaced at least twice; suffered from persistent coolant leaks throughout the entire history of ownership; had to have the fuel pump replaced about 18 months after I bought the car because of a persisent issue with losing power abruptly that nobody could track down until I had the engine conk out on me repeatedly during a trip to North Carolina; spent two days at the end of 2009 having the fuel-injection system completely cleaned out; had persistent problems with the ignition system culminating in experiencing a very infamous issue with this model of car last year where the ignition column just completely freezes up, requiring replacement and the cutting of a whole new key; not to mention "regular" maintenance on brakes, etc. By last year that wretched thing was literally costing more to fix than it was worth to keep, and I had to spend something like $1800 cash money on repairs that I should have put into the down payment for a replacement instead. 
As of now, I have a 3.99% loan at 60 months for a 2016 Hyundai Accent, former rental (contrary to the old conventional wisdom, these days used cars bought from reputable rental companies are often in better shape and better-maintained than many private-ownership used cars), which I expect to put less than 10k miles on per year due to my current commuting circumstances (train, all I have to do is drive 11 miles round trip to the station and back) so that it'll still have a fair bit of trade-in value on it in 4 or 5 years when I'm ready to buy another good-quality late-model used car. This little runabout is in good shape to begin with and I intend to keep it that way (it's a plus that the 2016 model year is very well-regarded with very few problems reported compared to some previous years) until it's time to trade it in.
@Anonymous wrote:For heaven's sake. Why would anyone want to use a credit card to buy a car?! Do people who do that even think about the long-term financial consequences, or do they just go "gee whiz, I have a $25k limit on my super-duper metal signature limited-reserve Visa, I'll go ahead and just slap it down for that nice set of wheels"?
I know first-hand what money sinks automobiles can be. In 2006, when I was a lot less educated about financial matters than I am now, I bought a 2001 Ford Focus to replace my previous car which had been totaled (according to the insurance company anyway; it had had its left front bashed up by a pickup truck that turned right into me from the front without looking, and I'm convinced to this day the damage could have been repaired). It ran well enough at first but there were ongoing issues with the coolant and electrical/ignition systems that soon became obvious. I had to replace the battery three times in 11 years (well, maybe that's not so unusual); have the thermostat replaced at least twice; suffered from persistent coolant leaks throughout the entire history of ownership; had to have the fuel pump replaced about 18 months after I bought the car because of a persisent issue with losing power abruptly that nobody could track down until I had the engine conk out on me repeatedly during a trip to North Carolina; spent two days at the end of 2009 having the fuel-injection system completely cleaned out; had persistent problems with the ignition system culminating in experiencing a very infamous issue with this model of car last year where the ignition column just completely freezes up, requiring replacement and the cutting of a whole new key; not to mention "regular" maintenance on brakes, etc. By last year that wretched thing was literally costing more to fix than it was worth to keep, and I had to spend something like $1800 cash money on repairs that I should have put into the down payment for a replacement instead.
As of now, I have a 3.99% loan at 60 months for a 2016 Hyundai Accent, former rental (contrary to the old conventional wisdom, these days used cars bought from reputable rental companies are often in better shape and better-maintained than many private-ownership used cars), which I expect to put less than 10k miles on per year due to my current commuting circumstances (train, all I have to do is drive 11 miles round trip to the station and back) so that it'll still have a fair bit of trade-in value on it in 4 or 5 years when I'm ready to buy another good-quality late-model used car. This little runabout is in good shape to begin with and I intend to keep it that way (it's a plus that the 2016 model year is very well-regarded with very few problems reported compared to some previous years) until it's time to trade it in.
Where here did you see anyone even suggest buying a car on a credit card??? I suggested that the only things in life that someone should go into debt for and pay interest is a house or car. Someone else said not even a car. I fananced a vehicle for my neice last year, that was a rental, so the loan value was 2000 more than the 20000 purchase price at one of my credit unions for 1.75% APR. Since the book value was higher than the purchase price, 325 dollars of their 355 dollar payment goes to principal, so the vehicle will always be worth more than they owe on it. My point I try to drive home to others is that credit cards should be used to recieve rewards, extend warranties, purchace protection, etc and to cause increased fico scores which will get you the low interest rates on the big things such as a house or car. Credit cards should always be PIF only and we should never pay a dime on credit card interest. Problem with some people is they start of saying they will only carry a balance in an emergency, but soon after everything becomes an emergency. There are actually in 2017 people still paying high interest on a credit card charge made in 2016 to buy a pizza...If you are having to finance lunch long term, you are doing it wrong. Credit Cards should be used as a safe means of transactions and be very short term as in PIF. The responsible use of cards, will increase your fico so you qualify for the 1.75% auto loan and 3.5% mortgage...the big things. This will save you thousands every year. End Rant!
@Anonymous wrote:
@sparklerd34 wrote:
My thing is help people but people have to help themselves I've learned from my mistakes and pitfalls. I'm still learning I just refuse to let my kids make the same mistakes. If you keep making the same mistakes over and over you haven't learned. But Everyone has their own path. Some of it was emotional some of it is impulse and some of it learned bahvior. I think I've been all of the above and the. I've also be at a point where I had no debt for 13 years and lived on cash but then I couldn't get any credit. Have to find your balanceOne of the classic, and only partly tongue-in-cheek, definitions of insanity is doing the same thing over and over again that didn't work on previous occasions and expecting it to work this time. Having gotten into serious credit/debt-related trouble twice, and having to resort to BK to extricate myself from it the second time around, I'm bound and determined not to prove myself a candidate for the proverbial loony bin and do it a third time.
+1 to all the posters who've reinforced the basic point that credit cards are financial tools and nothing else but. They can be used well or badly, wisely or foolishly, and people are right on both counts; you're responsible for your own actions, but in a lot of cases, you can get into debt trouble through no fault of your own whatsoever.no
That is all in life!! No one of us is perfect.
@Anonymous wrote:
Actually, my post yesterday stems from a lady friend who worships Ramsey after suffering with cc debt. I don't believe in his negativity towards credit cards either. I have watched a few of his videos and geez... these people who call in are absolutely efffed lol
I like the show but i am not die hard. I dont think i can save cash for a house. the rest is common sense but its a way of thinking really. I see it as looking at money differently. I do find it entertaining though just dont live by all of it.