kyounge1956
Thinks s/he gets paid by the post
- Joined
- Sep 11, 2008
- Messages
- 2,171
Sure, they are both LBYM. However, speaking strictly financially now, using a payment method which reduces the cost of the things you buy (by 1%-5%), and gives you float sure seems to be a financial advantage. I can't see any financial advantage to paying more, sooner.
So a rewards CC allows the LBYM'r to either live on a slightly lower 'Means', or to raise their 'Living' slightly on the same means. TAke your pick, but either choice is better. So I feel OK in saying (again, speaking strictly financially now), that it is something that they "ought to" do. Now, if they have reasons to feel they would have a problem using a CC, then fine, they should do what works for them. But I think they should recognize that they are giving up some financially power, and take that into consideration in the decision.
Let's use a non-CC analogy. Say you have a strict budget of $20 gas/week. You could say it makes no difference if you buy a car that gets 20mpg, or one that gets 30mpg, because you are only going to spend $20 regardless. But you can do more (live "higher") with a 30mpg car (on the same means), right? Or, have more opportunities to go under budget on weeks you drive less, and save that money or use it elsewhere. Either way, you got more for your money at 30mpg.
-ERD50
I think in saying "speaking strictly financially now", you have come to the crux of the matter. I agree that using float and getting cash back are financial advantages. But what if one is seeking some other sort of advantage--time, or security, or peace of mind, or any number of other possibilities? If that's the case, one isn't thinking "strictly financially" and I can see where that would result in decisions that look odd and perhaps even of questionable wisdom to somebody who is. Now me, I think I am more interested in maximizing free time and peace, than in getting the most out of every dollar. Remembering that I'm not speaking "strictly financially", why would I go to any effort to get more out of a dollar if I already have all I need without making the extra effort? Why would I use up even a few seconds of time to get something extra that I don't really want? Why would I concern myself at all about whether I paid the lowest possible price for something, when I was willing and able to pay what it cost when I needed to buy it? I might save money that way, but it would neither increase my free time nor contribute to my peace of mind, and I would rather have the time and the peace than the money. (Remember that 20% pay cut? Speaking "strictly financially", that made no sense whatsoever. Thinking in terms of "what will increase my peace of mind" it made all the sense in the world.)
To use your non-CC example, why would I bother to replace the car (which involves at least some expenditure of time and effort in the form of research, test drives, etc) if it will carry me as far as I need or want to go within my budget? I'll expend the effort to replace the car when it is no longer able to do so. And I'll probably use a broker, even though it may cost a little more, rather than negotiating for the lowest possible price at a dealership. In fact I know I will, because that's what I did do when my 27-year-old Toyota Tercel finally bit the dust.