Must be nice to know everything there is to know SSCULLY :rollseyes: God forbid someone disagrees with you on any one point. Have fun with your cashback rewards and calling your credit card company because your payment was supposedly received late.

 

@1depd +1 to that

 

Well what did I say that was mean? Was it anything like Gotts2BMe? Hmm how bout this

Yeah I think all the condescending talk in this thread brings a lot of members of this forums true nature to light.

 

OK, to you it makes sense to keep the 1,000.00 in a saving account earning 5% ( or less ) and hold on to the same 1,000.00 on a credit card costing you 18% ( or more ), just for the sake of saving you have savings and add to it every month ?
This procedure is worth you giving up 13% ( or more ) APR on your money ?

Guess basic math is lost on you....

No, it is pointing out the flaw in your logic. You have some warped sense of fiscal responsibility.

For the 2nd, and hopefully the last time.
The last time I called the issuing bank on any of my credit cards is when I activated them years ago.
You can figure out how to post this dribble on the forum, but you cannot figure out how to setup a credit card to auto pay the full amount on the due date. Set it once and forget about it, and it is not as if it stops working for no reason ( maybe your case was your account was NSF ? )
Does not take more than 5 min, and it is not splitting atoms.
If you cannot figure out this most basic procedure, who is going to take your financial advice seriously ?
This is akin to taking your advice on which is the best boot to buy, when you don't know how to tie your laces.

 

thanks dinggus, ill have to check it out.

 

sscully once again condescending. I cant figure out how to set up a credit card on auto pay or do basic math because I disagree with you. Putting me down once again because you disagree with my opinion. Thanks for showing your true nature Im sure many on this forum are not even replying to you because they know what comes out of it-nothing but condescending dribble.

 

Im not losing 13% on my money when Im not even using any credit cards. My savings account doesn't cost 18% interest to keep the money there. If I take 1000 of my earnings and put it in an investment account I can make 10% back on that investment over my lifetime and you're getting 2% percent back on your cash back rewards who is making more money?

Lets say you take all the money you spend on your credit card over a twenty year span and add up your cash back rewards for that time period. Then you compare it to all the money in your savings account that is making you 5% as you quoted above. Are your cash back rewards more than five percent on your credit card? What if you lose your job and can't pay back the full amount and now you are being charged penalties and interest. You're cash back rewards aren't earning you more in this way.

You think the credit card companies would give these cash back rewards if they weren't making money off of someone making mistakes with their CCs? Maybe you don't make any mistakes but I don't believe in credit cards. If you want to tell me how stupid I am then fine do it all day long but I guarantee in the long run your cash back rewards will be chump change compared to investments that you made.

What do you do with your cash back rewards? Do you put them into your investments or spend them on consumable items? If you don't invest them then what does it matter? They're not increasing my net worth because I don't use them and they're not increasing your net worth because you spend them on items that don't mean anything to your net worth.
'
Its all about perspective man and the more you put me down the more I will just type right back at you we can argue til the end of time. You putting me down and the other members putting me down here just because of my opinion being different royally pissed me off and I aint taking it laying down.

Now take your cash back rewards and shove em up your ***

 

Even if it was late, last time I talked to a credit company about late payments, since I was deployed. They stated they don't submit late payment claims unless 3 months late.

---

This thread is getting trash, I wish OP's can clean it up. Let's stop arguing, take it to PM. Alex, thank you for your advice on starting off by putting away 10%, and SSCULLY, thank you for your advice in the thread and PM.

I've got alot of knowledge out of this, and I'm looking at when I PCS to switching my bills over to my CC for reward points so I can either cash out, plane tickets, rental cars, etc.

 

The point you are missing, and one of the leading financial gurus misses all the time, is financially responsible people control their spending and do not let their spending control them. They do not spend more than they have to. So they spend the same amount as you. Instead of having to pay cash for their purchases they take a small interest free loan and use that. They pay their cards off every month. They also search out cards with cash back rewards. They then either invest that cash back, or purchase something they needed to purchase anyway. Either way it goes to their bottom line and net worth.

I forget the financial guru's name, because he is so wrong, but his is great for beginners and won't hurt you financially. One the flip side he won't get you the most return for you time either. His followers seem almost fanatical in their support and do not believe he could possibly not be telling them a better way.

Gotta go to work more when I get back.

 

This was from that stupid phrase you posted :
It shows what you posted is not that wise when it comes to money.

Guess 3 times was not enough.. 4th and I am guessing not the last time:
This is just an added benefit to using the Credit card to hold on to, and collect interest as long as you can on your money.
I am holding onto the money that I spend for another 22 to 50 days collecting interest on it, as well as getting cash back. Yes some of the items do have 5% cash back on the amount at time of statement close, but let's just use 1% cash back on general items. If I did my math correctly with the little coffee I have in me:
If I make a purchase of 100.00 on my card. I still have that 100.00 in my account earning interest. Depending on the yield curve it is 1.1% to 1.7% APR.
In addition to this, the 1% cash back on that 100.00 for that month is extrapolated to 12% APR in simple interest terms.
So my $ 100.00 that I leave in my account due to using the card is earning an annualized rate of 13.1% + all for not paying cash, but using the card to make a purchase of something and having it auto-pay the full balance on the due date. No "games" no calls to ask questions, just sit on my butt and make money ( well I did have to pull out the card and swipe it instead of handing cash, and getting change back, so there could be the use of 10 more mussels to perform this... )

To quote you :
-Start practicing the good habits that wealthy people do and you soon yourself will be wealthy


I have the cash in my account for what I am buying. If I do not have the money earmarked for it, I do not buy it. I might have money for something else, but I do not cross the items. This is the part you seem to not be able to perform yourself. If you know this about yourself, then you are best not to pick up this free money. That part I commend you on, but it is the actions that you do only. The advice part....
Just the same if I were to use cash in my pocket to buy something and lose my job 22 days later. Same cash flow use case.
This is where you are not grasping the concept of responsible credit card usage. You keep defaulting back to your irresponsible usage of them, and applying it to me.
See no games, no calls to ask questions...

The cash back is from the transaction fee they charge the merchant to use the system.
When a credit card is used to make a charge, the merchant pays the credit card system 1.25 % to 3% for using the system.
The credit card companies are giving back 1% of this, in hopes people do irresponsible things like you, and carry a balance. If people were responsible with their credit card usage, all these cash back deals would go away ( or they never would have be designed ).

The stupid part was on your comment of "Pay yourself first then your bills. Dont pay all your bills and then save.".

It goes into the account just like any other interest, at the end of the day, cash back rewards are really just interest on your money. The sum of the small amounts add up over time. There are things you don't do to save 15.00, but these are corner cases.
Why would one do financial planning based upon spending interest ?? questions like this make me scratch my head.
There are promotions that are not cash back. Mobil had a deal a few months back, register the card you use ( the one that my speed pass has on it ) and they sent you a gas card for a percentage of your purchases in a date range. The 10 min to fill out the form netted me a 75.00 gas card. That I spent, but it replaced 75.00 earmarked for fuel that got left in the account, so in reality I made the 75.00. I would have spent it with or without the gas card.

The perspective of what ?
You are posting sound bites and stupid phrases that you think is solid financial advice. Your friends might be impressed with these little nuggets of wisdom, but they are rubbish.
Look at this post, you just added in 2 more to the list.
Financial planning on spending interest while working ??
That is going to get you nowhere, basically running in place.

Actually I take my annualized rate of 13.1% + on my money, and shove it my account.
As I posted before, please leave this free money laying around for those of us smart enough to pick it up.

I am practicing the good habits that wealthy people do.
Your attitude is a self inflicted wound in the battle of the widening gap of the haves and have nots.
If you would be an adult and exercise some responsibility, you too could be on the other side of the fence. At the very least study the book you posted you have. Using it to level your kitchen table is doing you no good.

 

Scully please clarify this for me:

To keep the math simple lets say your CC gives you 1% and your checking gives you 1 %. Lets say you have $1000 in bills each month. If you pay your bills with the credit card at the beginning of your billing cycle and pay the card before the end of the cycle to avoid charges you will get 1% cash back. 1% of $1000 is 10 bucks. At the end of the year you have made 120 bucks from your CC cashback program because you paid 12000 in bills with your CC. That is still 1%. Your checking account also gave you 1% on the money because you were able to leave it in the bank longer instead of spending it on your individual transactions. On that $1000 per month or $12000 per year you made $120 bucks interest. That is also 1%.

Please explain to me how you were able to increase that to 13%??

I will admit that math is not my strong suit but I think I got it right. You made a total of 2% not 13%.

 

I was giving an Annualized APR on the amount that I charged in that one month time frame, instead of pulling cash money out of my pocket to compare it to an investment as was asked for by Alex_4.2L.

The way I got there:
Think 1 month CD.
If you deposit $1,000.00 into it, and get $ 10.00 back at the end of the month and that is it, the CD is closed bank hands your money back to you.
Did you earn 1% APR or 12% APR ?

Add to this question, the $1,000.00 went to pay for something at the end of the CD, so it is gone.

You still only made 1% on your money, but the annualized rate is 12% on that 1,000.00 that you do not have anymore.

Did I do that wrong ??

Could be, I still do not have enough coffee in me.

 

You earned 1% in that example not 12%. APR is dependent on the time period for which the loan is calculated. Because you are basically just doing one month loans from your CC it is still 1%. So your net gain is 2%. 1% from CC cash back plan and 1% from checking/savings.
It is still free money but as soon as a mistake is made, a payment is late or a fee charged the house of cards falls over. You definitely have to be disciplined and have a budget which by Alex's own admission he is not.

 

I sort of cheated on my $200 cash back number. They gave me $150 to start the card, so I only actually made about $75 in 3-4 months. I put approximately $1,500 - $2,000 worth of gas/food/bills on it every month.

 

Correct. I never said it earned 12%., I said it earned 1%.
The question I asked above :
Don't know if you mean to clip my post at this point or not, but you answered what the money earned, not what was the APR on the money. Two different questions.

The value APR is independent of the length of the loan or investment.
When you are using APR numbers, everything is calculated at the rate for the same length of 12 months ( Annual Percentage Rate ).

In terms of simple interest ( need to keep it simple interest, not compounded as what is being discussed is on a per month basis ) which is a better APR ?
1. Earning $ 10.00 on $ 1,000.00 for 1 month
2. Earning $ 180.00 on $ 1,000.00 for a year and a half ?

Example #1 you earn 1% on your money
Example #2 you earn 18% on your money.
They both pay 12% APR ( again simple interest not compounded interest, which is APY ).

That is true, the gain is 1%.
I have never said other wise.
Need to pay attention when the percentage is labeled with APR.
Percent gained is only the same as APR ( simple interest terms ) when the length is 12 months.

I have never denied that this is for responsible people.

Those that say they can budget without a credit card, but the moment they get a credit card it falls apart, are people that spend every last dime of what is in their pocket.
They know they have A to Z bills every month, but what is left over is spent every month.

Auto-pay setup removes the late payment issue.
The only mistake that can be made is not following the budget.
I could never understand why a 10 year old can follow 13 steps that are written down, where someone that has the ability to shape the future of the country by voting cannot.