Interesting viewpoint on credit cards

[pb4uski]

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?

 

[bada bing]

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.

 

[jazz4cash]

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.

 

[LRDave]

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.....

 

[Walt34]

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.

 

[athena53]

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.....

Nah, it'll be a self-checkout with a robo-voice repeating, "Please remove item form bagging area."

 

[Svensk Anga]

So, to advance the idea that folks should feel the pain of all spending, can we now expect Ramsey to advocate for quarterly billing of mutual fund ER's and financial advisor's AUM fees, rather than have these quietly vanish from investors' accounts? It would follow that advisors in Ramsey's network will lead the way. Don't hold your breath.

 

[Walt34]

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.

Yes, I knew a guy who almost couldn't buy a house because he always paid cash for everything. He had a steady job and paid everything on time, but had never used credit so he had no credit score. As far as the credit agencies were concerned he simply didn't exist.

He finally did get the home loan, but he had to jump through a lot of hoops to do it.

 

[davismills]

Yes, I knew a guy who almost couldn't buy a house because he always paid cash for everything. He had a steady job and paid everything on time, but had never used credit so he had no credit score. As far as the credit agencies were concerned he simply didn't exist.

He finally did get the home loan, but he had to jump through a lot of hoops to do it.

Just to be fair, the credit reporting agencies are not the most reputable organizations either. We've all got a big potential black eye from the Equifax debacle.

 

[MarieIG]

Typically, I pay cash in person, and cc for online purchases. I like to hunt for bargains online. When I put a charge on the cc I'm like a catcher, standing in the field to make a catch. When that charge come in BANG, I pay it. I do NOT LIKE DEBT. PERIOD. Most months I catch all changes and my statements are zero.

Now, would I spend less without a cc? The answer is yes I would. I don't really enjoy going to stores, and would skip most shopping trips. Also, I don't have the time to get to stores to make purchases that I do online.

 

[MarieIG]

I really don't know much about Dave Ramsey, but I get the impression that his target audience are the people who ate the marshmallow before the researcher came back.

I remember that one!

 

[FUEGO]

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.....

Like the poor souls paying cash at the 24 pump gas station with 1 cashier inside.

 

[Pilot2013]

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!

You misread. I said a DIFFERENT audience than here, not a small one. In fact, my statement implies that as this audience is rather select and small, the mainstream (those folks that DON'T manage money well is apparently pretty large.) Maybe that's why his following is so large.

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 .

I'm not sure Dave Ramsey is the only bitter person....

 

[FUEGO]

Where do I sign up for the 15% cash back card?

15% is somewhat rare but 7.5% on some stuff is fairly easy throughout the year.

It varies quarter to quarter. In Q4 2017 several Chase cards (Sapphire Preferred and Reserve; Freedom) offered 10% cash back when shopping at Walmart and paying with Chase Pay (just click that instead of "credit" when checking out). I used 4 chase cards to buy $300 per card of Walmart Gift Cards for the 10% cash back (and I'll be using the GC's over the next six months or so for routine shopping). Chase Freedom offers 5% CB on various categories each quarter and Chase Pay is one of those categories (plus gas, internet, cable, phone) up to $1500 in purchases.

Spend the 10% you earn at the Chase Ultimate Reward portal on travel (air, hotel, car, etc) and it's worth 15%.

Discover offers a 5% CB card that sometimes offers double that on some categories sometimes I think. Don't have the card so not sure how it works.

 

[purplesky]

I'm not sure Dave Ramsey is the only bitter person....

Have you heard Dave Ramsey do his millionaire theme hour? Only Dave Ramsey can ruin The Millionaire Next Door. and take the fun out of achieving that milestone.

I am guessing you have not. If you ever get REALLY bored check it out and you will hear how mean spirited and disgruntled Dave Ramsey has become.

Listen to Clark Howard and its night and day. Clark Howard is a class act and is not divisive like Dave Ramsey.

Lets not make this about you and me.

We are not financial entertainers giving bad advice laughing all the way to the bank.

 

[RobbieB]

I've never heard of him or heard him. Nor Suzie. None of the hawkers or bloggers. Not gonna listen to Clark or Wade either.

I'm really happy to have missed all that noise -

Zero credit score indeed, what crap.

 

[NYEXPAT]

Why don't you just get your own credit card?

Because I do not want one! I am enjoying my personal economic freedom.

 

[pb4uski]

That's fine and good but I'm not sure that I would be so high and mighty and proud of it if in order to travel internationally I had to piggyback on someone else's credit.

 

[Sunset]

How do you use cc's that are in other people's names and not get arrested? (maybe I shouldn't ask?)

Easy as pie... .....

I'll occasionally use DW's CC (with her permission), but they don't know that at the grocery store, or the gas station.

They never ask to see it, even though it has flowers on the card

I just slide the card in, and scribble a wiggle to sign, and off I go with $80 groceries and $30 gas making my getaway.

The issue here in the US is a chip card does not require a pin number, so if any dropped CC is ready to be used. In Canada, you need the 4 digit pin number instead of signing so dropped CC's are fairly safe.

 

[FUEGO]

Because I do not want one! I am enjoying my personal economic freedom.

If you're listed as an authorized user on someone's account (what it sounds like you're doing) then the credit reporting agencies most likely have that card on file for you and the account owner's credit activity will most likely be reported on your credit report. YMMV of course but that's how it generally works with authorized users.

 

[hopefullyoneday]

Like the poor souls paying cash at the 24 pump gas station with 1 cashier inside.

Those people are usually buying something else along with gas like cigs or soda.

 

[Car-Guy]

I use CC's for the convenience. I do a lot of on line purchases and pay most monthly bills VIA CC. MUCH easier than writing checks and wondering if they will get lost in the mail (that's another thread). If my "in store purchase" is ~$50 of more, I'll usually use a CC. The use of a CC doesn't influence my purchase decision at all. (Honestly I seldom look at the price of things anyway. if I want it, I buy it.) Hey and the 1.5% cash back is just free money.

 

[mountainsoft]

We pay for daily expenses like groceries and gas with our debit cards. Everything else goes on the credit card. I rarely use cash for anything, in fact I usually have less than $5 in my wallet. I pay off our credit card as soon as possible, and have never paid CC interest.

I'm sure there is some truth to spending more with plastic than cash. But I don't see my spending habits changing much if I used cash, it would just be more inconvenient.

In many cases, cash isn't even an option. Our bills are all set for autopay. I don't pay cash for those, and haven't written a check in many years. When we shop online, you basically need to use a credit card.

As for his Disneyland reference, I think people tend to spend more on vacations in general. I know I've wasted money on useless junk just because we're having fun. But this is part of the amount we budgeted ahead of time for the vacation. It's recreation. I could have blown it on a movie, dinner out, or something else with no real lasting value.

For daily expenses, I rarely even pay attention to what things cost. I need to fill up my gas tank, so I pay whatever it comes to. We buy the groceries we need, plus those unplanned splurge items that find their way into our cart. Most of the time I couldn't tell you how much the total was, so paying cash instead of debit or credit wouldn't make any difference.

We are far from wealthy, but we have zero debt, and don't really worry about money. As long as the bills get paid and we can save a little for retirement and emergencies, I don't worry about the small stuff.

 

[samclem]

Listen to Clark Howard and its night and day. Clark Howard is a class act and is not divisive like Dave Ramsey.

+1. His show is entertaining, he and his staff do solid research to dig up truly useful tips, and his humble approach and self-deprecating humor are a welcome relief to many other talkers.

 

[ERD50]

I won't bother to quote any individual, but there have been many posts in response to criticism of Dave Ramsey, pointing out that his audience is not the typical ER forum member.

I get that. But the issue that I stated, is that he doesn't explain that not using credit cards (to use an analogy) could be looked at as a "training wheels" phase. And that there are advantages to getting off the training wheels. To just describe CCs as being bad, bad, bad, w/o also noting the potential benefits is dishonest and a disservice. To use another analogy, it's like saying since you can cut yourself with a knife, do not use knives they are bad. A tool is a tool, it can be used or misused. Learn to use the tool if you can (and don't use it if you can't). But don't take a one-size-fits-all head-in-the-sand approach to it. That's just stupid.

+1. His show is entertaining, he and his staff do solid research to dig up truly useful tips, and his humble approach and self-deprecating humor are a welcome relief to many other talkers.

I've heard of Howard, but never caught any of his programs, will look him up sometime, thanks.

-ERD50