Sorry - one more thing I’m not sure everyone out there knows -
When you pay off a credit card and want to close it don’t just close it. You have to call the card company up and find out what you have to do to make sure it is on file that you ‘requested’ to close the account. Otherwise it will just show up on your credit report as closed and will possibly count against your score. If it shows up that you had requested it to be closed it will show up as a positive instead of a negative.
The only thing a credit score is good for is getting you into debt. That is all. I hate debt and never use it because you can’t accumulate wealth with debt and credit…impossible. The credit rating system is flawed because it is only a rating based off the use of debt. It doesn’t take into consideration income and wealth. The only time I will use credit is if I ever decide to buy a house, but I will either pay cash or have a substantial down payment and I will easily qualify for a loan. I might not qualify for the BEST interest rate, but I would pay the damn thing off as soon as possible. On a 30 yr fixed home mortgage you pay almost double what you borrowed throughout the life of the loan…stupid.
Some may argue “well i run up the balance on my credit card each month, get the reward points, and just pay it off.” Also stupid. Research shows that people will spend something like 15-20% more when they use a credit card rather just paying cash. It’s the ‘I gotta have it now’ and impulse buying. Childish. This theory also leaves out the element of risk. What if you run up your balance in a month and lose your job? Then you are up a creek and might have to make minimum payments and pay interest until you regain your income. Also, Credit card companies hate these consumers that pay off their balance each month because they are unprofitable. So the CC companies will hold payments and make you late just to charge you interest and late fees (Yes, they will really do this).
Average household income in America is like 48k/year. Average household has 9k in CC debt. Throw a mortgage and a car payment in the mix and average Joe American is living paycheck to paycheck. Normal is broke.
Read the book I recommended, It will change the way you think. Also watch the documentary, Maxed Out"
Debt is DUMB. Cash is king. Normal is broke.
[quote]formerfatboy wrote:
Also, Credit card companies hate these consumers that pay off their balance each month because they are unprofitable. So the CC companies will hold payments and make you late just to charge you interest and late fees (Yes, they will really do this).
[/quote]
This is a huge myth, our company will take someone that pays in full all day long. We make money off of each swipe and take on little risk since the customer has shown that they can manage their budget.
I have heard about holding payments, but you can eliminate that “possibility” by paying online thru bill pay or paying by phone both of which happen in real time.
I do agree that SOME people will spend more with plastic since they don’t actually “feel” the cash leaving their hand, but the same can be said for debit cards, checks, and any other payment other than cash.
Who knows! I am a firm believer that you can manipulate the system to make it work for you (Until Obama changes everything at least). It takes discipline, but so does everything if you want to be good at it.
[quote]formerfatboy wrote:
Debt is DUMB. Cash is king. Normal is broke.[/quote]
Agree with this 100%, but I think you will find that all of us Pro-Credit Card people don’t consider our credit card as debt. It is a cycle, I put my paycheck in the bank to earn interest, float the money on my credit card, and pay the card off each month. I build credit, earn a little more interest, and get CC rewards all just by taking this extra step; worth it to me!
[quote]jaybvee wrote:
OK: With a baby on the way & the wife & I consolidating debts I seriously want some advice on how many people on T-Nation live within their means or at least try to -
Anyone here always pay cash or debit? The wife & I are paying down our debts with a bank loan & with the little man on the way budget is going to be tight.
Anyone else having to make the same no credit card decision?
I miss the plastic but I know it’s going to be for the best…
Advice or tips would be helpful & appreciated.
[/quote]
Congrats on the baby. I’ve actually never owned a credit card. It’s not that hard to live comfortably without one. My advice would be to make a buget that is as detailed as possible and follow it. Keep track of your bank accounts and resist the urge to splurge on random stuff. Good luck.
[quote]formerfatboy wrote:
Some may argue “well i run up the balance on my credit card each month, get the reward points, and just pay it off.” Also stupid. Research shows that people will spend something like 15-20% more when they use a credit card rather just paying cash. It’s the ‘I gotta have it now’ and impulse buying. Childish. This theory also leaves out the element of risk. What if you run up your balance in a month and lose your job? Then you are up a creek and might have to make minimum payments and pay interest until you regain your income. [/quote]
Your problem is that you are naming potential pitfalls of using a credit card. None of those are definite. The only things that are for certain are that I get rewards, insurance, etc. and if I pay off my monthly fee, there is no charge. For example, me personally, I never spend more than I have in my bank account. Then it becomes just a different form of payment: cash, check, debit, etc. Used like that, it’s like paying cash with rewards. It also makes your point moot.
[quote] Also, Credit card companies hate these consumers that pay off their balance each month because they are unprofitable. So the CC companies will hold payments and make you late just to charge you interest and late fees (Yes, they will really do this).
[/quote]
Autopay
If you can pay in cash then do it… I had loss my job some years ago and had to rely on credit cards to pay my rent, car note, etc… I racked up 30,000 in debt. My bills was manageable when I got another job but some how the credit card companies decided to raise my interest rates up as high as they could and that’s where everthing fell apart. I will never deal with credit cards again. I put money away each paycheck to cover any emergencies. These companies make a killing off of you.
Debit & cash is the way to go. Might get a gas card if I come accross a decent one…a good one is more like it!
[quote]King_Me wrote:
I suggest never getting a credit card in the 1st place.
Got The cash ? = Buy it
Dont have the Cash = Dont even think about it.[/quote]
I wish I had listen to this (which is what my father preached) 18 years ago. I spent over a decade trying to pay back all the stupid debt I accumulated. A DECADE!
Now that I’m married and with a baby, we both live strictly in cash. We both have our own credit cards, and we use them to pay for gas, cell phone, utilities, etc… but with the catch that the balance is always paid in full at the end of each month, and that it’s only for certain things that are already planned and laid out in a planned budget sheet.
We live under a strict budget. Strict not meaning stingy, but that we know what we are going to spend and how and why and that if we don’t sufficient monthly cash (after paying bills and a fixed % of our income going into savings, retirement and another savings account for emergencies), then we don’t buy anything.
The thing with our culture is that we never learn to save, and we never learn to use credit for repairs, emergencies and for creating opportunities to generate more income.
We use credit to live a life we cannot afford. We prostitute line of credits to live like fucking Hollywood starts. Or simply because we don’t even know how to plan a budget and live by it. For us, the concept of living within our actual salaries is like Klingon-speak.
It is amazing how well one can live by really going through a budget, trimming the unnecessary and knowing that you are paying your necessities.
I really wished I’ve learn the lessons King_Me just mentioned when I was young. And I hope people who see this also learn from it.
This is a great discussion. I think everyone posting here is either is probably fiscally responsible. The card users don’t overspend and the rest don’t use them. I have been acquainted recently with a couple of people who are obscenely in debt due tot he fact that they don’t see the card as money when they spend.
It makes it easy to run up $100 tabs at bars or buy that nifty piece of furniture you can’t live without. One of these folks is absolutely ruined now and will probably face bankruptcy.
Hopefully this dumb credit living is limited to the last couple generations and is coming to an end. I have certainly worked hard to teach my kid good financial habits and it seems to be working.
I live paycheck to paycheck. Only reason to have a credit card is for emergencies. All they do is cause a headache at the end of every month
[quote]paleotool wrote:
This is a great discussion.
It makes it easy to run up $100 tabs at bars or buy that nifty piece of furniture you can’t live without. One of these folks is absolutely ruined now and will probably face bankruptcy.
Hopefully this dumb credit living is limited to the last couple generations and is coming to an end. I have certainly worked hard to teach my kid good financial habits and it seems to be working.[/quote]
I agree 100%… Glad I brought my issue up with fellow T-nationers as not only am I learning about lifting but also how to administer financial discipline on my dumb ass with help from my wonderful wife 
As for the kid as he grows I am making damn sure he does not fall into any bad money/budget habits that Mom & Dad had as best I can.
Again, thanks all for the kind words, not so kind words, advice & encouragement.
[quote]Drater wrote:
pookie wrote:
They don’t charge interest until about 21 days after you get your statement. Pay the total by the date due, and you can use your CC all month long. Right now, by using it one day and paying it off the next, you’re losing interest you could be making on the money. You’re sticking it to yourself.
Wow, you and johnnytang24 made good points. My comment showed just how financially unsavvy I am. I’m kind of like the person who said their parents didn’t teach them right. I just thought build my credit score and pay it all off, didn’t think about anything like building interest on MY money. Maybe I’ll check out that book on Amazon those other two suggested!
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that’s not a reason to use CCs. I’m not even clear what the point here is.
“Losing” interest money? Do you realize how infinitesimally small the interest is on a few hundred dollars for a few days, at the usual checking account APR of .1%? Sorry, I’d rather “lose” a penny a year than deal with snakes (CC companies).
My parents, IMO, taught me very well how to use a debit card AND a credit card. When I was 16, my dad gave me my tax return (stock portfolio my grandmother set up in 1960, 1 for each grandchild she thought she’d have) and got me a debit account that was attached to his bank account so that by logging into his account online, he could see my account and what I had been spending on.
He never said anything about anything I was spending money on, and I went on with the reckless abandon that only a 16-year-old can have. Sooner rather than later, I was out of money and flabbergasted. My dad had turned off overdrafting so that I wouldn’t rack up fees, and thank God… I hadn’t stayed on top of my spending the way I should have and I learned that lesson in a simple, no real penalty way, but I knew what COULD have happened.
Later, I ended up Rush Chair in my fraternity. If you don’t really know about rush and fraternities, basically its 1-2 weeks of recruitment. My fraternity is small, and those 1-2 weeks still cost us around $1500 and at the time we didn’t have good alumni for donations to defray the costs. The Rush Chair shouldered all the cost of rush until he could get reimbursed by the fraternity which, because the treasurer had to go through the university for the account, took about 3 weeks all told. Shouldering a $1500 bill for 3 weeks SUCKS in college, and so I had my mom co-sign on a credit card for me.
3 years later, I have yet to accrue debt for longer than 2 weeks on the card because I try to pay the card off twice a month except on rare exceptions. My debit and credit account are at the same bank on the same web interface, so payment is simple and my debit account is a student account so it doesn’t get interest.
Credit cards are not the problem. Ignorance is the problem. When people don’t know what they’re getting into, they get into the deep end before they can swim. In the meantime, I have enough points to come close to flying for free to see my girlfriend in Maine for at least the first year of grad school.
I only have cash and a debit card, and my wife acts as my acountant.Things are fine I dont even want a credit card.
I used a credit card when my dog needed an expensive surgery on his throat. Things like that are what they should be for…
I find it interesting people blame credit cards for their debt troubles, and not themselves.