Join Early Retirement Today
View Poll Results: Are credit card charges the same as debt
Yes, current credit card charges are the same as debt 67 41.36%
No, current credit card charges are not the same 88 54.32%
Another poll? Really? Too busy to answer 7 4.32%
Voters: 162. You may not vote on this poll

Reply
 
Thread Tools Search this Thread Display Modes
Old 09-28-2016, 12:48 PM   #141
Recycles dryer sheets
 
Join Date: Oct 2012
Location: Reno
Posts: 413
The topic is reminiscent of medieval scholasticism and the debate the number of angels who can fit on a pin, although more entertaining.

This has essentially been our method of paying regular monthly expenses for years. For daily purchases, instead of using cash, a debit card, or writing checks, we generally use a credit card that is repaid monthly through bank payment out of checking, and at the same time returning 2% of charges which we use for travel. I'm flying to Dallas next month to check on the Aged Parent, using some of the the cc points. Almost every regular monthly expense, like utilities and the small mortgage, are paid by automatic bank payments. We probably write no more than 1-2 checks a month.
We have always paid the monthly "expenses" in this manner for more than a decade. In practice (the real world as opposed to the accounting terminology world), it is no different than using cash or a debit card or check to pay these expenses.
To call it a debt is correct, but in reality it is debt that I ignore. It is a convenience that AmEx electronically breaks down charges into categories, which is useful each month as a visual budget audit and that these charges go automatically into Quicken.

Quote:
Originally Posted by Cobra9777 View Post
No need to break out the accounting textbooks. I think most would agree that any unpaid CC balance is technically a debt that must be repaid. But when it's paid off in full every month, with no interest charges, and usually a cash back credit or some other reward, this is hardly "debt" in the usual sense, or in context of the prior poll (at least that's my interpretation of the intent of the prior poll). More importantly, the lowest level answer for that poll was "<10%" of total assets. My average unpaid CC balance is 0.14%. I would think others who just use CCs for cash back rewards, would be similarly low. So answering "<10%" would be grossly misleading IMHO. I answered that poll, "no debt" and this one "no."
__________________

__________________
RobLJ is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-28-2016, 12:48 PM   #142
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 14,289
Scary that people who are so misinformed are allowed to vote.
__________________

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
pb4uski is offline   Reply With Quote
Old 09-28-2016, 12:54 PM   #143
Thinks s/he gets paid by the post
 
Join Date: May 2014
Location: Utrecht
Posts: 1,838
If a tree falls in the forest and nobody is around to hear it, does it make a sound?

If I eat in a restaurant and nobody has brought me the bill yet, am I in debt?

I shall meditate further on this ..
__________________
Totoro is online now   Reply With Quote
Old 09-28-2016, 12:55 PM   #144
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 15,817
Quote:
Originally Posted by Nemo2 View Post
Unless I'm totally missing the point, the clue "At the breakfast table" is a reference to Gulliver's Travels and the opening of boiled eggs, rather than computer memory.
Did someone mention Gulliver's Travels?

https://youtu.be/qhPfmafo12A
__________________

Bestwifeever is offline   Reply With Quote
Old 09-28-2016, 12:56 PM   #145
Recycles dryer sheets
 
Join Date: Oct 2012
Location: Reno
Posts: 413
You always open on the little end.

Quote:
Originally Posted by Bestwifeever View Post
Did someone mention Gulliver's Travels?

https://youtu.be/qhPfmafo12A
__________________
RobLJ is offline   Reply With Quote
Old 09-28-2016, 12:58 PM   #146
Thinks s/he gets paid by the post
Nemo2's Avatar
 
Join Date: May 2011
Location: Belleville, ONT
Posts: 3,124
Quote:
Originally Posted by Bestwifeever View Post
Did someone mention Gulliver's Travels?

https://youtu.be/qhPfmafo12A
Now I hear there's talk of making it into a book.
__________________
"Exit, pursued by a bear."

The Winter's Tale, William Shakespeare
Nemo2 is offline   Reply With Quote
Old 09-28-2016, 02:09 PM   #147
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 14,095
Quote:
Originally Posted by enginerd View Post
Even if you pay your credit cards in full before your payment is due, your credit report will still show you have debt. The only way for your credit report to show you have no debt is to pay off your balance in full the day before your billing cycle ends. That way your bill will show a zero balance.

So, I vote that if your credit report shows you have no debt, then I will agree with you that you have no debt.

However, I think the way some people are arguing, "the moment you swipe a card, you owe a debt" then you would also have to all your bills as debt as well. The moment you turn on that light switch you owe the electric company, the moment you own a house (even if paid off) you owe real estate taxes, etc. Unless you are prepaying for all those services, then no one could could ever be debt free by some of your definitions.
Interesting - I always pay my credit cards off the day before they are due simply because when I first started with e-billpay I wouldn't get the payment acknowledged immediately and paying off a day ahead solved that problem.

Also give me a 1 day window if something goes wrong....
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is offline   Reply With Quote
Old 09-29-2016, 10:54 AM   #148
Thinks s/he gets paid by the post
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 4,884
Send a message via Skype™ to kcowan
Quote:
Originally Posted by audreyh1 View Post
Also give me a 1 day window if something goes wrong....
Right but does it hurt your credit score?
__________________
For the fun of it...Keith
kcowan is online now   Reply With Quote
Old 09-29-2016, 11:50 AM   #149
Full time employment: Posting here.
 
Join Date: Sep 2016
Location: Acworth
Posts: 518
By the strictest definition of debt, everything you buy puts you in debt, at least temporarily (until you've handed the money to cover the charge). So that lunch out put you in debt, the trip to the grocery store put you in debt.

From a personal finance perspective, I treat a credit card bill that is paid in full each month the same as I treat a grocery store bill that is paid in full before I walk out of the store... not as debt.
__________________
exnavynuke is offline   Reply With Quote
Old 09-29-2016, 02:36 PM   #150
Thinks s/he gets paid by the post
 
Join Date: Dec 2009
Location: Alberta/Ontario/ Arizona
Posts: 2,486
Quote:
Originally Posted by audreyh1 View Post
Interesting - I always pay my credit cards off the day before they are due simply because when I first started with e-billpay I wouldn't get the payment acknowledged immediately and paying off a day ahead solved that problem.

Also give me a 1 day window if something goes wrong....
We pay our's off as soon as the statement is cutoff. Why wait? Interest is so low it really doesn't make any difference and I like to clear things up ASAP. I know some people who pay them every day. That seems a little excessive but would certainly keep things in control.
__________________
Danmar is offline   Reply With Quote
It's an investment
Old 09-30-2016, 08:10 AM   #151
Recycles dryer sheets
racy's Avatar
 
Join Date: May 2007
Posts: 440
It's an investment

Quote:
Originally Posted by braumeister View Post
... I don't actually "owe" the money to the CC until the due date. Since I pay it off by that date (if not a little before), then I not only don't owe the money, but in most cases I'll be rewarded for using the card. ....
Yep, using the card and getting cash back is an investment.
__________________
The Big Lebowski: Are you employed, sir?
The Dude: Employed?
racy is offline   Reply With Quote
Old 09-30-2016, 08:45 AM   #152
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 14,095
Quote:
Originally Posted by kcowan View Post
Right but does it hurt your credit score?
who knows?
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is offline   Reply With Quote
Old 09-30-2016, 08:48 AM   #153
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 14,095
Quote:
Originally Posted by Danmar View Post
We pay our's off as soon as the statement is cutoff. Why wait? Interest is so low it really doesn't make any difference and I like to clear things up ASAP. I know some people who pay them every day. That seems a little excessive but would certainly keep things in control.
It's a cash flow thing. Yep - 1% is little. But if I transfer the funds earlier to pay as soon as I receive the bill, I lose out almost a month's worth of interest, and it does add up over the long run. We often have high credit card bills - especially after traveling. I like waiting until the next month to pay it, and it give me time to adjust the amounts for the next month's auto transfer.
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is offline   Reply With Quote
Old 09-30-2016, 09:21 AM   #154
Recycles dryer sheets
 
Join Date: Aug 2014
Posts: 233
As many here, I pay the CC bill in full every month along with the electric and gas bills. Since my monthly CC bill is <0.1% of my net worth, I don't consider it as "debt" in any of my financial calculations other than estimating future annual expenses. I can't imagine what else those numbers would be used for that required better than 3 significant digits of accuracy. It really doesn't matter if the CC is used for 1, 10 or 50% of my monthly expenses. Yes it is technically debt, as are accrued real estate taxes and many other day to day recurring expenses.
__________________

__________________
CRLLS is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Fraudulent charges on credit card. What to do? Amethyst Other topics 19 07-25-2013 09:42 AM
When to record Credit Card charges on Expense spreadsheet Amethyst FIRE and Money 38 02-09-2009 08:22 PM
Pre Paid Credit Card/ Gas Card or Credit Card nphx Other topics 4 04-29-2008 01:04 PM
A canceled credit card can still receive charges and refunds Alan FIRE and Money 10 10-12-2007 06:04 PM

 

 
All times are GMT -6. The time now is 09:50 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.