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try giving them your real name instead of your BODN moniker...might help them locate your account.

Some of the best advice I ever heard Dave Ramsey give: "I've never talked to any millionaires that got rich by racking up reward points using a credit card."

Here's what I do, I find a card with a great deal (like $400 or $500 for spending $3,000 in 3 months) and I use that card exclusively until I reach the target dollar amount. Once I reach the target do

It's not just ten minutes of your time though, is it? Unless you are using these cards for one-time purchases, you still have to devote time to picking what card you are going to spend on what purchases at set locations, and then make sure you stay within your budget in making those purchases, then pay off the balance on the card(s) to ensure you don't pay interest. Again, that takes time.

Question for you guys that use multiple cards every month... do you ever carry a positive balance on them? Maybe this is the way my mind works, but if I had a card that I only used for groceries, I could maybe make sense out of it by making an automatic monthly payment to that card of what my monthly grocery budget would be, and then just make sure I don't spend over that amount. Even that added effort isn't worth the $30-40 I'd make in the 5% cash back, but it's the only way I could make sense of it. As it stands now, we take out cash every week, and of that cash we have a set amount we spend per week on groceries (among other things). When that money is gone, it's gone. No overspending, no credit balances. It's not that we were ever undisciplined in our spending, but it simply prevents it from happening in the first place.

Here's what I do, I find a card with a great deal (like $400 or $500 for spending $3,000 in 3 months) and I use that card exclusively until I reach the target dollar amount. Once I reach the target dollar amount, I cash out my benefits and move on to the next card, or go back to my go-to daily use cards like Chase Sapphire preferred or Chase Freedom if there aren't any good deals running. If I am buying plane tickets to Thailand or making big purchases, it might take me a month to hit the dollar amount, if I am not making big purchases, it might take me the full 3 months.

If I am taking a trip where I want to use up the free airline credits on my Amex cards, I will bring those cards with me and buy seat upgrades or drinks or movies or whatever just to use those benefits. For the Amex platinum, I might use it on two or three trips before I hit the $200 airline credit limit. Either way, the refunds post before the bill is due, so I pay it as soon as the refunds post, then put the card in the drawer until the next year.

At no point have I ever carried a balance on any card, because I don't want to ever pay a cent of interest. I have also never paid an annual fee, they are either waived for military every year, or I get the first year for free, then drop the card down to the non-annual fee version at the end of the year.

This might all sound like a lot of work, but you can easily manage all of it on your iPhone while taking a dump.

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For the record, I haven’t had a car payment in almost 8 years and have paid cash for four decent cars in that time.

While I agree it is unwise to carry a lot of debt, you probably lost money with this plan. Debt free doesn't always equal most fiscally advantageous.

Also, it sounds like you're assuming people with multiple credit cards have a lot of debt; that's not always true. The Amex Platinum requires that you pay it off each month. Considering it was free, that thing paid for itself in one sitting at an airport lounge with an open bar.

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While I agree it is unwise to carry a lot of debt, you probably lost money with this plan. Debt free doesn't always equal most fiscally advantageous.

I probably did "lose" money by executing a debt-free budget. Like I said in my post, I'm okay with that considering the opportunity cost of time to keep track of expenses spread across multiple cards with the amounts/period of time constraints as Gravedigger described. We have been doing just fine--that couple hundred, even a few thousand, that we "missed out" on by not using credit cards doesn't affect our lives because we weren't counting on credit card companies to supplement our income to begin with.

Also, it sounds like you're assuming people with multiple credit cards have a lot of debt; that's not always true. The Amex Platinum requires that you pay it off each month. Considering it was free, that thing paid for itself in one sitting at an airport lounge with an open bar.

Didn't mean to sound like I was equating multiple credit cards with a lot of debt. What I have seen a lot of though is fellow officers living outside of their means as I described (too big a house/mortgage, car payments, student loans, vacations, etc). And those same people use multiple credit cards, as you guys are describing.

As for the airport lounge perks...again, given the alternative, I'll soak up the cost of my own beers at the airport and avoid dealing with AMEX and the rest of them. No hard feelings toward them, just a choice we make, and like I said in my post earlier, I like keeping things simple. Besides....probably best I don't get too melty faced before a flight.

Edit: I didn't address the exact thing you quoted, which was the purchasing of the cars. We buy pre-owned vehicles so as not to take the instant hit in devaluation inherent with a brand new car. I researched the hell out of the year/make/models/trim for those vehicles (as Gravedigger pointed out), I figured out my bottom-line price (below retail), and then offered that amount and no lower. I found the negotiating to be easier when you tell them outright you aren't interested in financing, we are either going to cut a check or walk to the other dealership that has the same vehicle we want and see if they are interested. Trust me, I didn't lose money on those deals.

As far as the 0% financing deal goes... I don't fully own that car until it is paid off, regardless of interest. If I was financing it, I'd want to have that money put aside somewhere to pay it off in the event I experienced a loss of income. If I have that money put aside, I might as well just pay for it in cash and skip the financing tomfoolery. I know, the "loss of income" concept is probably remote, but it is also not unheard of, and it makes for a pretty worry-free life when you own your vehicles outright.

Edited by Champ Kind
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As far as the 0% financing deal goes... I don't fully own that car until it is paid off, regardless of interest. If I was financing it, I'd want to have that money put aside somewhere to pay it off in the event I experienced a loss of income. If I have that money put aside, I might as well just pay for it in cash and skip the financing tomfoolery. I know, the "loss of income" concept is probably remote, but it is also not unheard of, and it makes for a pretty worry-free life when you own your vehicles outright.

Agreed with everything you said but this. The cash that you are paying for that vehicle with (a strictly depreciating asset) you cold be using to invest in something, anything really that appreciates. Even if that something (bonds, CDs etc) does not beat inflation it is a better use of your cash than an asset that strictly depreciates.

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Agreed with everything you said but this. The cash that you are paying for that vehicle with (a strictly depreciating asset) you cold be using to invest in something, anything really that appreciates. Even if that something (bonds, CDs etc) does not beat inflation it is a better use of your cash than an asset that strictly depreciates.

I don't consider a vehicle an "asset". It's just a mode of transportation. I don't expect anything I own for that purpose at this point in my life to go up in value. Are you saying that financing makes it any better? In that situation, I'm continuing to pay for something that is losing value *as* I'm paying for it, interest or not. My assertion that it's not "mine" until I no longer owe anything on it still makes sense to me.

Besides that, as far as investing in anything else that appreciates, we have a set percentage that we put away for retirement. We've also set realistic expectations as to what those contributions will look like at various phases of life starting at age 55 based on some (very) conservative rates of return. I'm not worried that paying cash for a good deal on a car is negatively affecting our portfolio, or even our ability to plan a vacation in the short term.

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You pay 15k cash for a vehicle on day zero.

I take out a 60 month, 0% loan.

I plop that same 15k cash in an interest bearing account and withdraw every month to make my loan payment.

In 5 years, we both have a paid in full, used vehicle. I have made money. You have not.

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You pay 15k cash for a vehicle on day zero.

I take out a 60 month, 0% loan.

I plop that same 15k cash in an interest bearing account and withdraw every month to make my loan payment.

In 5 years, we both have a paid in full, used vehicle. I have made money. You have not.

If you're earning enough interest to fund a car loan, are you not also paying tax on the earnings?

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Read it again.

I'm not "earning enough interest to fund a car loan"

We both start with the same 15k lump of cash.

We both pay zero interest/financing fees.

I have interest income (that I'm happy to pay taxes on). You do not.

Yes, I'm paying more tax than you .... But I'm paying tax on income that you don't have. I'm still way ahead in the end.

It's definitely anti-ramsey. But it's not hard to understand.

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You pay 15k cash for a vehicle on day zero.

I take out a 60 month, 0% loan.

I plop that same 15k cash in an interest bearing account and withdraw every month to make my loan payment.

In 5 years, we both have a paid in full, used vehicle. I have made money. You have not.

Who's giving 0% loans on used cars?
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You pay 15k cash for a vehicle on day zero.

I take out a 60 month, 0% loan.

I plop that same 15k cash in an interest bearing account and withdraw every month to make my loan payment.

In 5 years, we both have a paid in full, used vehicle. I have made money. You have not.

Math doesn't lie. You are in fact correct.

However, what is USAA paying on money market accounts right now? 0.69 percent? On 20-30k over 5 years were talking about how much money in real dollars? I'm too lazy (and drunk) to do the math right now, but I've done it before and it just wasn't worth the hassle to not pay cash and be done with the car buying transaction. But if it's worth your time, then please enjoy the spoils.

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With a 0%, 5-year, $25,000 loan, you save about $1,800-$2,000 over the life of the loan if you figure in inflation (~3%). That's no small chunk of change. With low interest rates and high inflation, it almost doesn't make sense to pay it off quickly. I might as well use Year 2020 dollars which are worth less than Year 2014 Dollars.

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Another anti-Ramsey here, although I wish like hell my in-laws that live paycheck to paycheck and are paying off several small purchases (TV, fridge, 2 cars, motorcycle) would listen to him.

I've got the Hilton VISA. My wife and I travel a lot, and in the last three years I've stayed in free rooms in NYC, Amsterdam, Budapest, Nashville, Berlin, DC, Cologne, London, Dublin and a few others I can't remember. I put everything on it and pay it off each month. With technology these days, it's all automatic, I don't even have to look at a bill (just browse what I bought every few weeks or so to prevent wife or fraud buffoonery). Zero time, and what is essentially a free timeshare in my pocket.

I also double the warranty of anything I buy, and get free rental insurance when I travel. Saying that cash is simpler is one thing, but arguing that it's somehow better than using credit responsibly doesn't add up.

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I make $400 to $500 per month on credit card cash back. I have the "old" Amex blue card that gives 5% cash back on groceries (including the Commissary). I buy about $1000 per week of Visa gift cards at my local grocery store, then use the gift cards to buy money orders at Wal-Mart. I deposit the money orders in my bank, pay Amex, and wait for the cash back to arrive.

I also buy all non-groceries exclusively in Visa gift cards. That gives me about 3.8% cash back on things that aren't groceries. It seems pretty elaborate, but I have it down to a process that fits with my daily life.

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The loophole is still open, but hard to find. The "old" Amex Blue still exists:

http://www.flyertalk.com/forum/manufactured-spending/1535970-old-amex-blue.html

It gives unlimited 5% cash back at grocery stores, gas stations, and major pharmacies. There are reports that Amex will shut you down after spending $50K, but I'm still going strong past that for my anniversary year.

As far as fees, I pay $5.95 to activate a $500 Visa gift card. Walmart charges $.70 for a $1000 money order. So, for $1000 of gift cards at a grocery store, I'm making $38 in profit after fees. It's more if I need gift cards for Amazon, Home Depot, etc that don't charge activation fees.

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I make $400 to $500 per month on credit card cash back. I have the "old" Amex blue card that gives 5% cash back on groceries (including the Commissary). I buy about $1000 per week of Visa gift cards at my local grocery store, then use the gift cards to buy money orders at Wal-Mart. I deposit the money orders in my bank, pay Amex, and wait for the cash back to arrive.

I also buy all non-groceries exclusively in Visa gift cards. That gives me about 3.8% cash back on things that aren't groceries. It seems pretty elaborate, but I have it down to a process that fits with my daily life.

So you're spending between 10 and 15k per month? I've got a better 'free cash' plan. Ditch the cash back rewards, spend between 9 and 14k per month, pocket the $500 difference between the two plans, and spend your free time on your boat instead of in the Walmart money order line (that's a scary place to be).

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The other option is buying cash re-load cards and transferring that money to an Amex Bluebird card (which is free). You only have to pay the fee for the re-load card ($3.50-$7), there is no fee to transfer the funds to your Bluebird, and you can load it online, and pay your credit card bill with it.

Why? Because Wal-Mart sucks.

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I make $400 to $500 per month on credit card cash back. I have the "old" Amex blue card that gives 5% cash back on groceries (including the Commissary). I buy about $1000 per week of Visa gift cards at my local grocery store, then use the gift cards to buy money orders at Wal-Mart. I deposit the money orders in my bank, pay Amex, and wait for the cash back to arrive.

I also buy all non-groceries exclusively in Visa gift cards. That gives me about 3.8% cash back on things that aren't groceries. It seems pretty elaborate, but I have it down to a process that fits with my daily life.

Did we just get spammed?

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