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Old 01-14-2018, 09:23 AM   #61
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I agree- he's helped a lot of people. In one of his books, he told of a couple who REALLY wanted to meet with him ASAP because they were in a big financial mess and wanted his help. He suggested a date the following week, but they couldn't make it- were leaving on a cruise.

For that audience, keeping them away from credit cards is a very good idea. Using Nerdwallet's average of $15,654 balance for households carrying a balance, even at 18% that's $200/month in interest alone.

I can ignore his advice about credit cards- haven't paid a dime of finance charges in decades, and $200/month is about what I receive in cash-back rebates. I'm also not enthusiastic about generating income through real estate investment, even though it's worked very well for some people. I still think Ramsey has some good points.
Just because the average credit card balance is 15k does not mean that they pay interest. I have over 12k total on 2 cards and pay no interest or fees until promo ends then i just get another cc and do a balance transfer.

What are your monthly expenses where you can generated $200 a month in cc cash back. I get 4% back each month on a 10k account which only comes out to about 35 a month.
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Old 01-14-2018, 09:34 AM   #62
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Originally Posted by hopefullyoneday View Post
Just because the average credit card balance is 15k does not mean that they pay interest. I have over 12k total on 2 cards and pay no interest or fees until promo ends then i just get another cc and do a balance transfer.

What are your monthly expenses where you can generated $200 a month in cc cash back. I get 4% back each month on a 10k account which only comes out to about 35 a month.
Good point - we run an average of say $5K/month through our CCs and pay it off every month.

[Edit] I now see that Athena53 said "carrying a balance" so maybe its apples and oranges. In that case $15K seems very high. My CC-challenged relatives run $5-10K carried balance, I think, and they are exactly the people Ramsey is addressing.
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Old 01-14-2018, 09:39 AM   #63
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Ramsey holds that if you have to lay down $100 bills at the grocery store your brain says "Ouch!" and that will make you spend less.
$100 bills?!?!?!?!

To quote Thurston Howell the III - "How quaint. I didn't know they made them that small"
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Old 01-14-2018, 09:51 AM   #64
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Good point - we run an average of say $5K/month through our CCs and pay it off every month.

[Edit] I now see that Athena53 said "carrying a balance" so maybe its apples and oranges. .
We run a fair bit through our CCís every month (ranges maybe between $20-$50k). I believe we would be included in the average outstanding CC figures even though we pay them totally off every month? We realize about $15-25k in business/first air tickets per year. Never even heard of this Ramsey guy?
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Old 01-14-2018, 09:53 AM   #65
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Never even heard of this Ramsey guy?
And you probably wouldn't, as you probably never look up get out of debt tags on the internet, or things of that nature.

Again, he doesn't serve the FIRE or wealthy audience.
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Old 01-14-2018, 10:13 AM   #66
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And you probably wouldn't, as you probably never look up get out of debt tags on the internet, or things of that nature.

Again, he doesn't serve the FIRE or wealthy audience.
Yes, that was my point.
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Old 01-14-2018, 10:30 AM   #67
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Just curious but how and on what do you spend 5k to 50k for per month on a CC. Do ou guys own businesses.
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Old 01-14-2018, 10:30 AM   #68
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What are your monthly expenses where you can generated $200 a month in cc cash back. I get 4% back each month on a 10k account which only comes out to about 35 a month.
Oops- can I plead "frozen brain"? It's cold here today! I got about $1,200 back last year so that's $100/month on a 2% cash back Fidelity Visa. This was an unusual year; I spent about $27,000 on travel and nearly $10,000 on work on the house. The travel was an outlier; DH died late in 2016 and we cancelled a planned trip to Iceland and got most of our $$ back, so that went towards 2017 travel. In 2017 I took a cruise in Central America and also went to Iceland, and then paid about $10K towards travel this year. Yes, travel is a major priority in my retirement!
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Old 01-14-2018, 10:38 AM   #69
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DH and I have no problems with income vs spending.

All of our married years DH preferred to be disconnected from our money. It's just not his thing. Discussion about finances/taxes/savings made him uncomfortable and itchy. He preferred to be uninformed and trusted me to handle everything, which I did and I enjoyed it.

When he retired in 2010 I wanted him to be involved (or at least AWARE) of our money. I was having a good time using cash back credit cards for the rewards, always paying in full every month and keeping track just fine. He found that very confusing and complicated. For him using credit cards disconnected him from the transaction.

When he took over the grocery shopping after he retired, he asked if he could just use cash for any spending we do locally. If that keeps him connected to our money I am fine with it. We still use a credit card, debit card or PayPal for online purchases. For groceries, Walmart, Home Depot, anything bought in a store in person, we use cash.

Part of me misses the fun of chasing CC rewards but if it keeps him in touch with our money I can adjust.
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Old 01-14-2018, 10:51 AM   #70
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How do you use cc's that are in other people's names and not get arrested? (maybe I shouldn't ask?)
It is all perfectly legit. People open an account at their bank and get issued a CC. They then ask for a second card on the account with my name on it. They pay all charges on the account ( get the rewards points) I reimburse them in cash. The downside is I am stuck with their credit limits (whereas mine would be much higher).
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Old 01-14-2018, 11:17 AM   #71
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Just curious but how and on what do you spend 5k to 50k for per month on a CC. Do ou guys own businesses.
Nope. Retired and living the good life.
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Old 01-14-2018, 11:29 AM   #72
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We seldom use cash any more. Our trips to the ATM are few and far between. Perhaps once a month.

We don't use our debit cards either.

Everything possible goes on our credit cards. We like our credit card reward programs.

We pay with cash more often when travelling. But only if there is an added charge for using a credit card, if none is accepted, or if a discount for cash is offered in lieu of using our credit card (more common in Europe).

We have never paid credit card interest.

Guidelines for using credit cards are very much dependent on the person who happens to be using the card. I know several relatives who use credit cards when they really should be sticking to cash only for their own financial well being. Based upon the increasing consumer debt load there does not appear to be a stampede towards the cash only method.
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Old 01-14-2018, 11:54 AM   #73
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Oops- can I plead "frozen brain"? It's cold here today! I got about $1,200 back last year so that's $100/month on a 2% cash back Fidelity Visa. This was an unusual year; I spent about $27,000 on travel and nearly $10,000 on work on the house. The travel was an outlier; DH died late in 2016 and we cancelled a planned trip to Iceland and got most of our $$ back, so that went towards 2017 travel. In 2017 I took a cruise in Central America and also went to Iceland, and then paid about $10K towards travel this year. Yes, travel is a major priority in my retirement!
Oh ok gotcha, sorry for your loss. I hope one day to travel that much.
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Old 01-14-2018, 11:59 AM   #74
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Iím getting close to the point where I donít use cash very often. Even fast food places take credit cards, and most of them now have systems where paying cash actually ends up being slower.

Heck, even the vending machines at work now take credit cards.

Itís gotten to the point that Iím only using cash for person-to-person stuff like Craigslist, rummage sales, comic conventions, and poker.

I carry a chunk of cash, but I generally donít spend it day-to-day anymore.
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Old 01-14-2018, 12:17 PM   #75
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You are pretty militant about your disgust for Dave Ramsey, yet apparently at one time you needed to heed at least some of his advice.

As many have said on here, this audience, for the most part, is not his audience. But them again I think this audience is a rather small one. There are a LOT more people out there that can get benefit from listening to what Dave Ramsey says, even if it may not be the best or most sophisticated financial planning advice. But for HIS audience, if he can get them to stop the cycle of debt, and start making some plans for their future, well, more power to him.
No I didn't need Dave Ramsey to get out of credit card debt. I just played the 0%balance transfer game and 0% deferred financing game on stuff from guitar center and Best Buy, etc and it just got old.


Dave Ramsey has the 2nd or 3rd largest radio show in north America so you are wrong about his audience size. His audience size is HUGE!

Yes if people go through Financial Peace university and follow the baby steps they can get out of debt provided they have enough income.

Its life after completing Dave Ramseys financial peace university where things get really weird.

So Dave Ramsey teaches people to close all credit card accounts and that they should completely ignore their FICO score and allow their FICO score to get to zero. Really? That is terrible advice.

If you follow Dave Ramseys baby steps you will have a fully funded 6 month emergency fund so at that point a person should be able to handle the Costco or Amazon or fidelity CC without issue and be greatly rewarded.
But no! Dave Ramsey apparently 25 years ago had American Express yell at his wife Sharon because they were behind on payments.

So 25 years later he still rips on American Express and will not give them any business and tells millions of people daily on his radio show that credit card companies are evil. Really? The banks are the devil.

Dave Ramsey is a financial entertainer who trolls his audience daily by being bitter about people who criticize his make it up as you go advice .
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Old 01-14-2018, 12:53 PM   #76
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It is all perfectly legit. People open an account at their bank and get issued a CC. They then ask for a second card on the account with my name on it. They pay all charges on the account ( get the rewards points) I reimburse them in cash. The downside is I am stuck with their credit limits (whereas mine would be much higher).
Interesting, but why would they agree to that? If you get hit by a beer truck before they get paid your executor might not know about the arrangement and refuse to pay them. I'm not sure I would ever do that for a friend or family member other than perhaps one of my children.

Why don't you just get your own credit card?
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Old 01-14-2018, 01:23 PM   #77
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I listen to Dave Ramsey while driving and have for years. I don't know why, but
I find the individual stories entertaining. As far as Dave's advice, it's a mixed
bag with some good advice mixed in with some horrendous advice.

With respect to credit cards, obviously there are many people who can't manage
their spending with credit cards. A lot of them would be better served
to never carry a credit card in their wallet. There is a huge difference between
never carrying a credit card and abandoning credit score maintenance altogether though

Dave's advice with respect to managing credit scores and credit in general is
100% crackpot. There is no reason to intentionally erase your credit score and
a lot of detriment. There is a lot of spending that isn't discretionary. Putting
utility bills on a credit card is a great way to maintain a credit report and get a
little cash back. There is absolutely no requirement to pay interest or maintain
debt to have a good credit score and to suggest otherwise is 100% crackpot.
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Old 01-14-2018, 02:00 PM   #78
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Just because the average credit card balance is 15k does not mean that they pay interest. I have over 12k total on 2 cards and pay no interest or fees until promo ends then i just get another cc and do a balance transfer.



What are your monthly expenses where you can generated $200 a month in cc cash back. I get 4% back each month on a 10k account which only comes out to about 35 a month.


This was my thought also. I had a Sears card for over 10 yrs with a huge balance @ 0 % as part of a customer retention promotion. I've had many others with moderate balances at 2-3%. I see cards with rates that seem to fall into 3 categories. Under 5%, 7-10%, and 15-24%. If it's over 3%, (or 3% balance xfer @0%), I'm not carrying a balance. I also use PayPal to get 0% for 6 mos. and Home Depot runs 0% promos consistently. I could've easily been swamped by credit card debit while on the accumulation phase if I had used those high rate cards.
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Old 01-14-2018, 02:56 PM   #79
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Think about this: What about when they get RFID technology (or some other technology) ironed so that all one has to do is load up your cart and walk out the door to use your credit source or bank account for a frictionless transaction. If you WANT to pay cash, there will one beleaguered cashier (maybe) with a line of other losers like you.....
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Old 01-14-2018, 03:47 PM   #80
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I've listened to Dave Ramsey many times and I think he gives sound advice to his target audience. That is not me nor this ER audience.
I've never heard his radio show but I did read his book "Total Money Makeover" (from the library) ~5 years ago. Much of it made sense for the average person who is deep in debt. That is for the most part not this group.

For example, for someone deep in cc debt he advocates paying off the cc with the lowest balance first, not the one with the highest interest rate, because he maintains that the value of the psychological boost from having one cc paid off outweighs the value of paying off one that is a few percentage points higher. From what I've read about psychology and money, he's probably absolutely correct for most people. But not those on this forum, who would attack the highest interest rate first.

So, while I don't think that all of his advice applies to me or members of the forum, I do think he's way better than Suzie Orman, who even I have to acknowledge does have a value to her respective audience. For example she "DENIED" some dimwit taking out a loan for a course that would give her a certification in elf spotting. So if someone needs to ask that question then indeed Suzie does give a value to her audience.

But the main reason I posted that video was that about 18 months ago we changed from paying mostly cash to mostly cash-back credit cards and didn't notice any changes in our spending, and I wondered if anyone else had. Apparently not, at least by the members of this forum. My faith in at least a portion of humanity is thereby preserved.
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