C.C. opinions

[feh]

We use our CC for everything we possibly can and pay it off each month. The convenience and rewards are great.

[Snodog]

This is one of a couple of issues where I strongly disagree with DR. The other being that you can spend 8% of your nest egg in retirement.

We use our cards for everything we possibly can and pocket the rewards. Been doing this for the last 20 years or so and have always paid off in full every month.

Its so frustrating hearing DR talk about credit cards. He's so dogmatic and refuses to believe there is ANYONE out there who can be responsible with them. And as DSteve said he always neglects to mention there are other benifits to using credit cards besides building your credit score and getting more loans.

You have been using credit cards responsibly for 4 years so I wouldn't change anything just cause someone on TV says they are always bad.

Now if you find yourself not paying off in full and/or suspect you are buying more because it is not "real money" then by all means get rid of them. You have to do what works for you.

[Ima saver]

I too, use my card and pay it off everymonth. I don't really buy a lot, but dh does. He is a builder and he gets 3% everytime he charges something at a home improvement store. He spends thousands a month, I pay the bill in full when I get it, then I apply for the cash back rewards check. I have received over $1000 in cash back since I have had the card.

[GREENBACK]

Guess I'm definitely on this bandwagon as well. I use cards for virtually everything. As for DR, he's a great motivational speaker if you're struggling with debt but he is not a great financial adviser per se.

[Broken Arrow]

This is one of a couple of issues where I strongly disagree with DR. The other being that you can spend 8% of your nest egg in retirement.

Yeah, he's taken a bit of flak for using what some (including myself) see as very optimistic market returns.

I think this part is somewhat forgivable though, because for quite some time, a lot of reputable fund managers and industry sources stated that 7%-8% annual market return was a reasonable expectation, and DR was simply following their advice.

Of course, it's much harder to convince anyone of that during this recession. I've read different sources that suggest we plan our returns using much more conservative estimates. I would look towards the lower end of the monte carlo estimates, or if you prefer, just use something like 5 or 6%.

I think shooting low is best. That way, you're more likely to be covered, and if you end up over-shooting your estimates... well, having "too much money" has never stopped anyone from meeting their investment objectives. But not having enough has.

[Snodog]

Yeah, he's taken a bit of flak for using what some (including myself) see as very optimistic market returns.

I think this part is somewhat forgivable though, because for quite some time, a lot of reputable fund managers and industry sources stated that 7%-8% annual market return was a reasonable expectation, and DR was simply following their advice.

Of course, it's much harder to convince anyone of that during this recession. I've read different sources that suggest we plan our returns using much more conservative estimates. I would look towards the lower end of the monte carlo estimates, or if you prefer, just use something like 5 or 6%.

I think shooting low is best. That way, you're more likely to be covered, and if you end up over-shooting your estimates... well, having "too much money" has never stopped anyone from meeting their investment objectives. But not having enough has.

I tend to see it as rather unforgivable seeing that many will go broke following his advice. Firecalc gives an 8% withdrawl about a 30% success rate of lasting 30 years and thats with an all-stock portfolio. Exchange the all-stock with a more realistic 50/50 stock/bond portfolio and you have about a 10% success rate.

Personally I see 5 or 6% as a little risky and plan on sticking closer to 4% as I agree it is better to shoot low and have too much than to be looking for work in your late 80's.

[Snodog]

As for DR, he's a great motivational speaker if you're struggling with debt but he is not a great financial adviser per se.

Agreed

[swanson719]

I myself would be what Broken Arrow so affectionately referred to as a Dave Ramsey zealot. Many here know my aversion to credit and credit cards is probably as bad, if not worse, than DR's. Yes, I have my sap story of growing up poor due to my parents having a huge amount of credit card debt and a low income. And yes, that has more to due with my personal belief that credit card companies are the scum of the earth than DR's similar attitude. And yes, DR is a crummy financial adviser once you are out of debt. Used responsibly, credit cards can be beneficial. But credit card companies don't stay in business from responsible people.

[Broken Arrow]

Uh... I mean no offense to anyone in particular when I say that. I think my feathers are only ruffled when somebody comes up to me and say, "You're evil for having credit cards!"

That said, I too have strong debt aversion, and I can assure you my stance towards credit cards and credit card companies are anything but warm and fuzzy.

To me, they're just business arrangements, or perhaps more like a cold war arms truce.

[swanson719]

Broken Arrow - I didn't take anything personally. I'm just a huge fan of D.R. and adhere to most of his debt handling advice. Being 22 yrs old and having no debt but a mortgage that's going to be paid off in the next 5 years is a good feeling.

My little sister is 18 months younger than me and doesn't even have a car because she fought the credit card monsters for 3 years instead of being able to accumulate the wealth spent on interest, over limit, and late fees. It's not evil to have CC's by any stretch. I treat CC's like I do guns - the gun doesn't do the damage, the person holding it does. I have more guns than I can count, but not a single CC. I've handled guns since before I can remember, but I couldn't tell you what the tangible benefits of a CC could be. Therefore, knowing full well the damage done by CC's, I tell those who are uninformed of them to stay away from CC's, the same as I tell people who don't know how to operate the safety on a gun not to even touch one.

[disneysteve]

My little sister is 18 months younger than me and doesn't even have a car because she fought the credit card monsters for 3 years instead of being able to accumulate the wealth spent on interest, over limit, and late fees.

I couldn't tell you what the tangible benefits of a CC could be. Therefore, knowing full well the damage done by CC's, I tell those who are uninformed of them to stay away from CC's, the same as I tell people who don't know how to operate the safety on a gun not to even touch one.

The gun analogy is an interesting one. If someone came to you and said they were thinking of getting a gun, would you tell them no outright? Probably not. More likely, you'd ask why they wanted one, what they knew about them, how they intended to use it, etc. If they knew little or nothing about them, you'd probably suggest that they educate themselves about them first, perhaps take a gun safety class, go to a range and learn to shoot, etc.

The same goes for credit cards. If someone told me they wanted to get one because it seemed like something they should have or all their friends have one or they keep seeing commercials for them, I wouldn't tell them to run and hide. I'd talk to them about the pros and cons of having one. I'd explain about interest and over limit and late fees and how to avoid them. I'd talk about how FICO scores are calculated and why they are important.

What are the benefits to having a credit card? That's easy.
1. No need to carry large amounts of cash.
2. Get to keep money in your account longer before paying for purchases.
3. Buyer's protection if something goes wrong.
4. Safety in case of theft or loss, unlike cash.
5. Rewards which can be quite substantial depending on your spending.
6. Special offers, discounts and bonuses exclusively for card holders.

[LivingAlmostLarge]

CC are like guns DS. Guns don't kill people, people kill people. CC don't make people get into debt, people get into debt themselves. Even without a CC, you can have student loan debt, mortgage debt, behind on utilities, car loan debt, payday loans, owing friends and family, etc.

[buster7823]

I also like the anology of C.C's are like guns but if handled responsibly they can be a good asset as well. It's the person pulling the trigger or pulling out the C.C who should be blamed for any misuse.

[boosami]

Haha, I bought a gun on my credit card this weekend...

[jeffrey]

The key is to always learn to play the game to your own advantage. If you don't, credit cards can burn you and bad. If you do, they can offer a number of advantages. For example, I just took off to Mexico and by using the credit card for the ticket purchase, I automatically received traveller's insurance for the plane flight and insurance if my luggage happened to be lost plus a way to get my money back if the airline unexpectedly went bankrupt. If I paid cash, I would not have received any of these protections.

Of course, the key as many have said before is that you have to pay off the balance in full each month.