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I've never listened to Dave Ramsay. What's his position on credit cards? Does he deny that they're great tools if you never accrue an interest charge?

Yes, he denies all good things about credit cards.

Dave Ramsay Quote:

Myth: Aren't there positive uses of a credit card? Like rebates and airline miles?

Truth: Responsible use of a credit card does not exist. Credit card debt is a major problem in America.

There is no positive side to credit card use. You will spend more if you use credit cards. Even by paying the bills on time, you are not beating the system! But most families don't pay on time. The average family today carries $8,000 in credit card debt according to the American Bankers' Association.

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I just got the Chase Sapphire Preferred card. No fees on international purchases, 2% back on travel (airline tickets, hotels) and all restaurants. 1% on everything else. I also got 5,000 bonus points just for getting my wife a card and then 40,000 bonus points for spending $3,000 in the first 90 days.

I then transferred those miles directly to United Airlines and got my mother-in-law an almost free ticket to Germany. In three months this card has already made me about $1,000 in free money. Did I mention I have exactly $0 in debt and I haven't paid a dime in credit card interest in over 10 years? If you have any self-restraint at all, don't listen to Dave Ramsey when it comes to credit cards.

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If you have any self-restraint at all, don't listen to Dave Ramsey when it comes to credit cards.

If you had self-restraint, you wouldn't need Dave Ramsey's advice at all. He has a great system that works for those that can't see the long term value of money. It's not going to make you rich, but if you are lost and follow it, it will save you some head ache.

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I'm a big fan of Capital One's Venture Card. 2% back on every purchase which you can use for any travel expenses. No foreign transaction fees, and best of all, they waive the annual fee if you mention the Military Member Service Relief AcT.

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My lineup is:

AMEX Blue Cash Preferred: 6% cash back on groceries (up to $6K per year), 3% cash back on gas & department stores, 1% on everything else

Chase Sapphire Preferred: 2% points on travel, 2% points on dining out, 1% points on everything else, chase points are easily transferable to most airlines & hotel rewards programs 1-for-1

Chase Ink Plus: 5% points on cell phone & internet bills, 1% point on everything else

Target RedCard: 5% off of all purchases, discount taken at the register

The Sapphire Preferred came with 45,000 chase points during signup and the Ink Plus card came with 70,000 (offers vary throughout the year).

Long story short, I've redeemed hundreds of dollars in cash back, bought several round-trip airline tickets, and save 5% right off the bat at Target, and have never paid a penny in interest. Plus there's purchase protection, price-matching, rental car insurance, and a whole host of other benefits that come with many credit cards that can't be had with debit or cash.

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I check creditcards.com about once a month to look for good deals. My current lineup:

Chase Sapphire Preferred - Daily use card plus the 40,000 bonus points for signing up and spending $4,000 in the first 3 months. (First year no annual fee)

AMEX Platinum - Use it for the perks, not for domestic purchases (Priority Pass Select, Global Entry, SPG Gold, $200 airline credit, no foreign transaction fee, etc). Annual fee waived for 4 years now

Barclay Card Arrival Plus - Used it for the 40,000 bonus points at signup, plus 10% back in points when redeeming. Dropped to regular arrival with no annual fee after 1 year. First year no annual fee

Capital One Visa Signature - Used it for 40,000 bonus points at signup, dropped to regular after one year for no annual fee.

Citi Dividend, Capital One Quicksilver, and Bank Americard - Used them for the $100 free dollars for signing up, and now just let them sit.

Chase Freedom - Just a good card to have, and Chase points are better than any other points.

Amex Blue Sky Preferred - Use it for the $100 annual airline fee reimbursement on top of the $200 reimbursement from the Platinum. Annual fee waived for 4 years now.

Plus store credit cards when the deal is good. (Macys, Pottery Barn, Target, Kohls, Home Depot, etc.)

I have never paid one cent in interest or carried a balance on any card, and in the last 5 years I've made about $8,000 in cash back, travel and rewards. I track my cards and rewards on a spreadsheet to ensure I never end up paying an annual fee.

Edited by Gravedigger
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Gravedigger, I certainly believe in using credit cards for convenience & bonuses/perks, but yours is a situation that actually can bite you. Having too many open, unsecured lines of credit reduces your credit score (making it harder to qualify for and/or putting you in a higher interest tier for mortgages, car loans, etc.), and it also works against you for those loan apps in that your limit (not actual balance alone) factors in to your "total debt" (for purposes of the app).

Recommend closing those cards you're not actively using. Hell, you could probably re-open in 6 months for more bennies, since you appear to enjoy the game....

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Jughead, that is actually a common misconception, and closing credit cards is about the worst thing you can do aside from having a balance. Having open credit cards with no balance increases your credit to debt ratio, which in turn increases your credit score. My auto loan was 0% (US Bank), motorcycle loan was 0% (GE Capital), and mortgage was 3.4% (NBOKC). There are plenty of credit card advice websites out there, and there are plenty of people with 50+ credit cards and perfect credit.

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Jughead, that is actually a common misconception, and closing credit cards is about the worst thing you can do aside from having a balance. Having open credit cards with no balance increases your credit to debt ratio, which in turn increases your credit score. My auto loan was 0% (US Bank), motorcycle loan was 0% (GE Capital), and mortgage was 3.4% (NBOKC). There are plenty of credit card advice websites out there, and there are plenty of people with 50+ credit cards and perfect credit.

Agree with Gravedigger, with one caveat. Another factor that affects your score is the average age of the credit line. So if you've been loyal to one card for 20 years, you have an average credit age of 20 years. If you go out tomorrow and sign up for 9 new cards looking to increase your credit to debt ratio, you will be drastically lowering your average credit age, which will hurt you. Just need to be smart about how you play the game.

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Jughead, that is actually a common misconception, and closing credit cards is about the worst thing you can do aside from having a balance. Having open credit cards with no balance increases your credit to debt ratio, which in turn increases your credit score. My auto loan was 0% (US Bank), motorcycle loan was 0% (GE Capital), and mortgage was 3.4% (NBOKC). There are plenty of credit card advice websites out there, and there are plenty of people with 50+ credit cards and perfect credit.

Seriously? First hit off of Google (from Equifax): http://learn.equifax.com/cs/Satellite?c=DS_General_Cont_C&childpagename=DecisionSimple%2FDS_General_Cont_C%2FDSGeneralContentTemplate&cid=1189578994233&pagename=DecisionSimple%2FPage%2FDSLayoutTemplate&ParentLinkID=1162919656130

Accounts in use. The presence of too many open accounts can have a negative impact on your score, whether you're using the accounts or not. This activity usually makes up approximately 10% of your score.

Plenty of other sources will tell you the same thing, if you care to look.

Now, it's certainly not the only factor (as the quote above indicates ~10%), and how many is "too many" is rather vague. You clearly have a good handle on your own credit and haven't suffered--so, good for you. I submit that is more about having the rest of your financial "picture" squared away (again, good for you) to the point where there's little or no effect on your tier, and a lot less about how you're somehow "helping" yourself by having multiple credit card accounts. Take your hypothetical twin with the same exact credit history & debt as you, but who does not have a laundry list of open credit cards--you may well be in the same tier, but his raw score will be higher. Under today's historically low interest rates, that's a non-issue (who cares what the raw score is? you only care what it gets you); if that picture changes and it gets tougher to achieve the top tier (i.e., higher raw score required for best interest rates), that may or may not be true in the future.

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I don't doubt that's what they say. I use USAA Credit Check monitoring and also access my credit score via BarclayCard and AMEX, I have only seen my score rise by adding cards, I've never seen it fall. Maybe I'm an anomaly in the system, or maybe like you said it's only a small factor (10%), and the term "too many" is extremely vague.

There are ways to purchase points and rewards by purchasing reloadable cash cards, like Vanilla, with your credit cards, transferring those reloadable cards to an AMEX Bluebird card and then paying the credit card bill with the Bluebird. That's a different level of point scheming, and takes time and effort. You can make thousands of dollars a year this way; there are tons of blogs about it if you're interested.

My message is simply that you can make a good deal of money and get a lot of perks from credit cards, and it's pretty easy to do. You're going to spend the money anyway, why not let these banks pay you to do it?

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Jughead, that is actually a common misconception, and closing credit cards is about the worst thing you can do aside from having a balance. Having open credit cards with no balance increases your credit to debt ratio, which in turn increases your credit score. My auto loan was 0% (US Bank), motorcycle loan was 0% (GE Capital), and mortgage was 3.4% (NBOKC). There are plenty of credit card advice websites out there, and there are plenty of people with 50+ credit cards and perfect credit.

I am not here to show you how good or bad we are at finance. You did not pay 0% for either of those loans.

Jughead, that is actually a common misconception, and closing credit cards is about the worst thing you can do aside from having a balance. Having open credit cards with no balance increases your credit to debt ratio, which in turn increases your credit score. My auto loan was 0% (US Bank), motorcycle loan was 0% (GE Capital), and mortgage was 3.4% (NBOKC). There are plenty of credit card advice websites out there, and there are plenty of people with 50+ credit cards and perfect credit.

I am not here to show you how good or bad we are at finance. You did not pay 0% true interest for those loans. You paid interest on those loan even if it was in fees (most likely). No one says "hey, please take this money. I don't want anything for giving it to you. I am just glad I could help."

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I am not here to show you how good or bad we are at finance. You did not pay 0% true interest for those loans. You paid interest on those loan even if it was in fees (most likely). No one says "hey, please take this money. I don't want anything for giving it to you. I am just glad I could help."

Dear God you guys sure are skeptical of the benefits of good credit. Yes, banks do give 0% financing to people with good credit, it happens all the time, and there are no financing fees involved. I could have bought my motorclye easily with cash, but only a Dave Ramsey follower would pay cash when a 0% loan is available.

It looks like Suzuki (GE Capital) is still doing 0%, and I bought my bike 3 years ago: http://www.suzukicycles.com/offer.aspx

Here are some current 0% auto loans: http://best-car-deals.buyerreports.org/0-apr-car-loan-deals

I am not posting shit about credit cards for affirmation; my setup works really well for me, so I'm not changing it. When I commissioned I had a debit card, and that was it. It wasn't until I met some financially-smart Captains that showed me how to work this game in my favor, and I have been collecting on it for years. I don't get a commission or bonus from signing people up, but I do like to help others realize the potential out there to get free shit for doing nothing special. That is the American way, after all.

Pay cash for shit, use debit cards, buy a used Honda Accord...I really don't give a shit what people want to do with their money. Just don't think that's the only game in town.

Edited by Gravedigger

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I am not here to show you how good or bad we are at finance. You did not pay 0% for either of those loans.

I am not here to show you how good or bad we are at finance. You did not pay 0% true interest for those loans. You paid interest on those loan even if it was in fees (most likely). No one says "hey, please take this money. I don't want anything for giving it to you. I am just glad I could help."

zero percent interest is zero percent. There are no fees associated with zero percent that I know of. According to the below there are other factors to be aware of though which sounds like general business/buying sense.

http://www.bankrate.com/finance/auto/0-car-loans.aspx

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Dear God you guys sure are skeptical of the benefits of good credit. Yes, banks do give 0% financing to people with good credit, it happens all the time, and there are no financing fees involved. I could have bought my motorclye easily with cash, but only a Dave Ramsey follower would pay cash when a 0% loan is available.

It looks like Suzuki (GE Capital) is still doing 0%, and I bought my bike 3 years ago: http://www.suzukicycles.com/offer.aspx

Here are some current 0% auto loans: http://best-car-deals.buyerreports.org/0-apr-car-loan-deals

I am not posting shit about credit cards for affirmation; my setup works really well for me, so I'm not changing it. When I commissioned I had a debit card, and that was it. It wasn't until I met some financially-smart Captains that showed me how to work this game in my favor, and I have been collecting on it for years. I don't get a commission or bonus from signing people up, but I do like to help others realize the potential out there to get free shit for doing nothing special. That is the American way, after all.

Pay cash for shit, use debit cards, buy a used Honda Accord...I really don't give a shit what people want to do with their money. Just don't think that's the only game in town.

Haha-I love credit, despise dave Ramsey but also no there is no such thing as a free lunch. If you pay 0% apt Suzuki, GE capital etc is making it up somewhere else. Either you paid a higher up-front cost or gave away some benefits. I am sure your credit helps you, but if you signed a 0 % interest loan they made money somewhere. Otherwise they wouldn't be in business.

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I have defended DR before, but I keep an open mind. The credit card stuff looks good, and I do dabble in some rewards programs. I think his point is, eventually, you will pay interest, and the they win. Probably not this group though, just the rest of the USA. I second the 0% interest thing, you paid for it somewhere, I would think usually in overall cost.

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I have defended DR before, but I keep an open mind. The credit card stuff looks good, and I do dabble in some rewards programs. I think his point is, eventually, you will pay interest, and the they win. Probably not this group though, just the rest of the USA. I second the 0% interest thing, you paid for it somewhere, I would think usually in overall cost.

I think that its pretty obvious that the great majority of Americans pay credit card interest EVERY month. The rewards programs wouldn't be there if they didn't. Their loss is my gain.

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Haha-I love credit, despise dave Ramsey but also no there is no such thing as a free lunch. If you pay 0% apt Suzuki, GE capital etc is making it up somewhere else. Either you paid a higher up-front cost or gave away some benefits. I am sure your credit helps you, but if you signed a 0 % interest loan they made money somewhere. Otherwise they wouldn't be in business.

You're confusing revolving credit with a car loan. A 0% APR loan on a car, or computer, or vacuum cleaner is not only a real offer with no strings (most of the times), it's fairly common. You see them offered by either the manufacturer (the actual Ford corporation, not the dealer) or the retailer (Newegg.com), rather than an third-party bank.

The benefit to them is that they sell the car, mattress, or computer today that you, the interest avoiding consumer, would not have bought until next month if you were paying cash. It's not much different than an infomercial offering 4 easy payments of $9.99. Less pain up front makes you more likely to buy now.

Even the credit card companies, contrary to popular belief, are thrilled to have someone like gravedigger use their credit card on everything and pay it off each month for no interest. Don't forget about transaction fees; they may not be charging you, but they are charging the retailer.

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Also, watch out for the "60 months interest free" on a 72 month loan. They usually throw all of the 60 months of interest on the 61st month of the loan. Most people don't read this fine print. Pay everything off within the 60 months and you're fine.

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You're confusing revolving credit with a car loan. A 0% APR loan on a car, or computer, or vacuum cleaner is not only a real offer with no strings (most of the times), it's fairly common. You see them offered by either the manufacturer (the actual Ford corporation, not the dealer) or the retailer (Newegg.com), rather than an third-party bank.

The benefit to them is that they sell the car, mattress, or computer today that you, the interest avoiding consumer, would not have bought until next month if you were paying cash. It's not much different than an infomercial offering 4 easy payments of $9.99. Less pain up front makes you more likely to buy now.

Even the credit card companies, contrary to popular belief, are thrilled to have someone like gravedigger use their credit card on everything and pay it off each month for no interest. Don't forget about transaction fees; they may not be charging you, but they are charging the retailer.

TINSTAFL, but sometimes you can get a third party to pay for that lunch.

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TINSTAFL, but sometimes you can get a third party to pay for that lunch.

Yes, the retailers pass those costs onto everyone, including those paying cash. I would like to thank all the cash paying DR followers for subsiding my credit card rewards! Edited by Butters

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You're confusing revolving credit with a car loan. A 0% APR loan on a car, or computer, or vacuum cleaner is not only a real offer with no strings (most of the times), it's fairly common. You see them offered by either the manufacturer (the actual Ford corporation, not the dealer) or the retailer (Newegg.com), rather than an third-party bank.

The benefit to them is that they sell the car, mattress, or computer today that you, the interest avoiding consumer, would not have bought until next month if you were paying cash. It's not much different than an infomercial offering 4 easy payments of $9.99. Less pain up front makes you more likely to buy now.

Even the credit card companies, contrary to popular belief, are thrilled to have someone like gravedigger use their credit card on everything and pay it off each month for no interest. Don't forget about transaction fees; they may not be charging you, but they are charging the retailer.

I am aware of the difference. O% Apr is to get you in the door and buy the vehicle (insert noun) at their planned price and not one cent lower. If you are willing to pay interest through their banks you can buy the same thing at an even lower price bit the overall cash paid, accounting for inflation, is still the same. Yes, some people prosper off of other people actually not paying off their balances but it isn't you the consumer, it is the shareholder.

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I am aware of the difference. O% Apr is to get you in the door and buy the vehicle (insert noun) at their planned price and not one cent lower. If you are willing to pay interest through their banks you can buy the same thing at an even lower price bit the overall cash paid, accounting for inflation, is still the same. Yes, some people prosper off of other people actually not paying off their balances but it isn't you the consumer, it is the shareholder.

Not always true, though a savvy dealer will try to make you think that.

Most times the agreed price and the financing are separate for the 0% deals. The 0% financing comes from the manufacturer, not the dealer or his partner bank, and is not affected by price since the manufacturer charged true invoice regardless of what the dealer convinced you to pay.

Now, the dealer will try to keep the price higher by any means, to include implying that the low financing rate somehow merits a higher price. A skilled buyer will go into the dealer claiming he does not plan to finance, negotiate the cash price to a defined number, then ask about manufacturer 0% financing. They'll fuss, but not enough to make you leave.

Again, this only works for manufacturer incentives, since their target is volume.

Edited by Lord Ratner

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