Credit card?

I would recommend Amex gold , they have a great point system.

 

A little older thread but I'm going to comment.

First of all I don't totally agree with Dave Ramsey on credit cards. I get that he has to give advice for the masses and credit cards are a huge source of debt and stress for many people. For those of us that play the rewards game and NEVER EVER carry a balance, they can work out pretty good. One slip up on not paying the balance in full and you've lost most if not all of any rewards you received.

I'm going to get rid of the only card I have that requires a yearly subscription fee. That's my Amex Skymiles card. At first I got a companion ticket and could earn enough miles to really use it. I've taken my family of 4 on trips to Peru, Guatemala, Florida, and Hawaii on just skymiles alone. Now they are going to jack the cost to nearly $500 a year and the rewards you earn are hard to spend. You have to take red-eyes everywhere and plan almost a year in advance to even find get on the plane. Good bye Amex!

I'm replacing Amex with a couple of other rewards cards for different purposes. My most recent is Sams Club MC, which has a pretty good reward for gas, dining out, and travel. Now the biggest issue I have with Sams CC is that the stupid thing isn't enabled for the Apple Wallet. I might not have gone with it if I knew before. I don't carry my wallet much anymore but always have my phone. I've survived just fine with Apple Pay (and my wife uses Samsung Pay on her Android phone).

 

Lots of crazy info in here.

Carrying a balance doesn't help your score, in fact above 1 or 2% will start dinging you temporarily.

Having open cards and not using them does help you. Number of accounts and credit age both help your score, and having a 0 balance card will lower your total credit use if you have to carry a balance on another card.

"Getting and using a credit card, but paying it off every month," WILL help your credit rating. A new credit card will ding your credit age temporarily, but again, carrying a balance does nothing, and I've never had a limit reduced on 20+ cards between my wife and I in the last few years.

If you want to make credit cards work for you, look up churning. 1-2% is a joke. $500 on $3000 is 16%(even after the annual fee it's around 12%, and most good cards the annual fee comes with other perks that pay for themselves). If you get really into it, you turn that $500 into something like British Airways points and get two roundtrip tickets to Hawaii. If you follow sites like nerdwallet and thepointsguy you find deals like the chase southwest cards - I got 130,000 southwest points and a companion pass(wife flies for free, and I fly for free with my points) for something like $130 in annual fees.

 

This is all correct. Keeping a balance on your card only makes you pay interest, it does not help your score. Ideally your credit utilization (total cc spend / total cc limit) should be in the single digit percentages, but teens are OK too.

Also, miss a mortgage payment and see what happens. One of the more immediate and detrimental ways to murder your credit.

< Finance and Accounting professional

 

Nerdwallet.com

Pay it off each month (use like cash) and you can ignore the APR.

 

If the rate matters than you probably should not be using a credit card. Credit is pretty much needed for real estate transactions and short term (1 month) emergencies. Some people use credit to purchase things they can’t or shouldn’t afford. My personal recommendation is this behavior is fraught with undo risk.

Additionally auto dealers are masters in getting people upside down on loans...while not on a credit card this has to play into affordability overall.

So because a CC is needed for things such as auto rentals or hotel reservations I would suggest a card associated with a company you do business with (example Amazon) and that offers cash back. You also must therefore pay the full balance each month or none of the advantages of cash back make any sense. If you carry a balance forward to the next month because you can’t afford to pay it in full, then you should have waited until you saved the money up front.

 

I read upside down auto loans are the highest they've ever been.

I've always wondered how that can even be a possibility, then I read many articles or posts on here with people who assume because they got approved sitting across from a guy in a tie that means they can afford what they're purchasing. The reality, if you don't have enough to cover the entire balance in the bank, you probably can't afford it. But lifestyles must be kept up so the neighbors are jealous of your garage.

 

I paid everything off house, cars etc. The cards I use give me rewards and I don't even know the rates because they are paid in full. Costco gives me 4% back on all gas purchases, Cap one has miles etc.

 

It blows my mind when I went to go buy my truck that the sales guy's first question was "what do you want your monthly to be?"

So many people are apparently going for minimum down and a friggin 72 month term that they don't care what the actual cost is.

 

I had to deal with that even through I was paying with cash as well. I didn't disclose I was until we met in the finance office as i read that could impact the vehicle cost.

I've heard 84 months is becoming common now. No wonder prices are climbing and people are upside down. People could care less what they cost as long as the monthly payment looks fine. Manufacturers are taking advantage of it and prices are skyrocketing out of control.

 

i'm not surprised. that is what they are trained to do. i was dealing with one dealer via email and they kept giving me monthly numbers without an interest rate. I had to ask for the cash price like 5 times. We were doing something else and he reverted back to the monthly. he did not make a sale. so annoying

 

I went to war with the sales guy over the total price, etc. Halfway through our deliberations, he actually stopped and said "wait, what do you do for a living?" He had a semi-scared look when I said I was the money guy.

 

this thread reminded me, i needed to request credit limit increases on all my accounts.

 

So fun story, I had a starter card from USAA that got me through college with a $300 limit. So after graduation, I call them saying that since I was a full time worker now, I wanted to raise my limit on my college card. C/Wouldn't do it, but did offer to start an account on a regular card. Oh, ok.. Well, good news! You're approved for a 14 THOUSAND dollar limit.

 

paying off a Credit Card every month does build credit, can't believe people are telling you it doesn't. You do not have to carry a balance to build credit. I chopped up my debit card and only carry credit cards around with me for a few reasons.

1. safer if i lose it
2. CASH BACK!!! 2% everything. 3% restaurants and entertainment, 4% fuel. 5% phone and internet.
3. I pay my Credit Card balance off every Friday.

Recommended cards.
1. Citi Cash Back
2. Citi Costco Card
3. Amazon Card *if you have prime it's benefits are better*
4. Any rotating category card.

bonus tip: I've opened up Credit Cards just for cashback. Example spend $3000 in 3 months and get $500 back + whatever percent the merchant was giving me cash back on top of that. Credit is meant to be utilized, if you're smart use it to your advantage!

Seriously though, do research, Credit Cards in the right hands are huge bonuses for you. Given if everyone took advantage of cards these ways companies wouldn't offer the things they do. Another mans living beyond their means is another mans treasure. Example, foreclosures.

 

It is actually good for those of us that manage our money, we get the full advantage of product availability that is artificially better because of the stupid fucks. However we must also carry costs technically disassociated from our cash behavior that is the blended costs of having so many stupid fucks in loans they can or cannot afford.
It’s an easy soapbox to clamor from after the years of hard work getting here. As a youngster I did have auto loans...for my 1986 basic Nissan Sentra I bought used in 1992, not a new taco for sure!

 

I mean, with a decent interest rate, an 72+ month term wouldn't be a terrible idea if only for the sake of cash flow. I financed roughly a third of my truck for 36 months solely because it allowed me to do other, more meaningful things with that 13K.

 

Yes, although I’m sure you realize that this behavior actually inflates the price of everything by more than just your 3% but also the 5% Visa charges the merchant to. (Hidden cost). So you really need an 8-12% cash back to truly offset the credit card effect regardless of individual behavior to pay of the non-hidden costs.
Of course, I am not as altruistic as this myself as I use a 5% cash back card everywhere except the local brick and mortar merchants I want to succeed.

 

If that rate is 0 this makes short term sense if the need to pay it in full (for instance because of an emergency) does not require use of your rainy day fund.

 

yes, I see what you're saying, but you're talking about if we rid the world of CC completely. So in the situation we're in you make the best of it.

Also, I just realized how old this thread is. I'm unwatching.