Posted on 03/03/2011 5:52:49 AM PST by TheSentry
(Excerpt) Read more at badmoneyadvice.com ...
Chances that Dave would talk to Baraqqis? 100% Chances that they will listen? 0%
“Dave takes it to the extreme. Don’t ever have a card. Never, ever, ever! Because you’re a weak person and obviously can’t handle them.”
Yeah, cuz so many people use them effectively. Yepper. That’s the ticket. If you have no consumer debt and have 6 months of expenses in savings, then you are in the top 5% (or it could be 10%) of the American populace.
Yep, credit cards sure seem to be a key to building wealth in America.....When you play with snakes, don’t be surprised when you get bit.
...you are in the top 5% (or it could be 10%) of the American populace. If you say so, I don't really worry about what other people are doing with their finances.
Your post sounds exactly like Dave and exactly like what I was complaining about: maybe you can't handle responsible use of credit, but don't think that other people can't.
That’s why I didn’t go with a HELOC, even though they were available and wouldn’t require me to actually borrow the money until I needed it — they weren’t guaranteed, and their interest rate could change after a while (I’m not worried about the house getting undervalued to the loan, because the total loan is only 50% of the current value of the house, which itself is less than half what it was “worth” a couple of years ago).
I’ve used a HELOC one time — to bridge from when I bought a new house, to when I sold the old house. I had to fix up the old house before I put it on the market, and rather than get saddled with a large 1st mortgage on the new house, I took the mortgage I’d eventually need, and made up the rest with a HELOC against the old house, (which had a pretty small amount owed by that time, as I’d had it for 15 years). I was a minor risk, since maybe I wouldn’t have sold the old house, but it wasn’t like it was a hard time to sell a house.
“I do wish DR could address those of us who struggle financially due to never ending medical expenses rather than careless spending.”
If you listen regularly, you will eventually hear him speak about it. It does come up every now and then, but you are right it is not a common theme. I wish I could remember his advice for you, but I think I am getting senile.
No, go back to what you said. You don’t like Dave’s anti credit card message, because you are one of the FEW that can use credit cards responsibly. The GENERAL rule is that credit cards are not a tool for wealth building. Yes, exceptions exist in the population, but if you are one of the few then why rail on a message that is good for the general population?
I could responsibly use credit cards too, however I don’t need to and I see no benefit of dealing with snakes.
I listen when I can, it’s just not on our local station at a convenient time for me. Maybe one of these days I’ll catch him when he addresses this.
is this the commentator who appears on fox or CNN?
the one on CNN is totally toxic.
none of them really are of value. Ortman gives piss poor and dangerous advice, the CNN advice puts people into catastrophic failure...
You can listen at any time to his free archives, located on his website. I never get to listen to his actual broadcast, but I do get to listen at some time or another. Good luck...
What he would be against is carrying over the debt.
Few people have the self-discipline to payoff their credit card debt each month.
OK, so Dave and his wife had problems with credit cards in the past, that doesn't mean that other people can't use them successfully as one of many financial tools.
And I stand by that.
Lots of things in this world are dangerous if misused: power tools, cars, firearms, etc. Should we therefore tell everyone to never, ever use those things or should we educate people how to use them safely?
You and Dave apparently believe that people can't be trusted and should therefore should never make use of what can be a very valuable tool. I believe that people can be educated to use said tool safely.
Shall we agree to disagree?
What he is against is the abuse of the credit card, which is very common.
Many people have many credit cards and just payoff the mininum of each.
Also, there is a great emphasis on having a 'great credit score' as if getting credit is some great virtue.
The virtue is being 'debt free'.
This month we will payoff our mortage-in 17years.
The Banks hate that!
Amex is more likely to be corporate. Companies don’t pay for underwear but they do pay for meals.
Discover is the best deal in credit cards but fewer places will take it.
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.
He then goes on to say: "You will spend more if you use a credit card" and "When you pay cash, you can 'feel' the money leaving you."
Again, this is Dave projecting his problems with credit cards to the population as a whole. Since my family is disciplined to pay off the card each month (with the up-thread mentioned exception of when we deliberately used it as a 'bridge loan' for new home renovation because it was cheaper & faster than any available HELOC) when we use the card it's emotionally the same as using cash since we know that we're going to be writing a check to pay that purchase off when the current billing cycle closes.
Dave's one-size-fits-all advice doesn't. Treating people like children instead of educating them is the wrong way to go, in my opinion.
Even if you are debt free, insurance companies use a credit scoring model to help determine rates.
Lower credit scores are predictive of people that may be more likely to have (higher than normal) claims on their insurance.
And I stated that few people have the self-discipline to payoff their credit cards each month.
Ramsey is using common sense priniciples, that do apply to most people in most circumstances.
So, your appeal to your own circumstances do not discount his message at all.
And it is irresponsible to claim that they do.
FWIW, there are studies showing that people who use plastic, be it credit or debit cards, spend more. Seeing the actual green backs leaving one’s possession does have an impact.
I didn’t believe it either until I tried it for a month.
So, your appeal to your own circumstances do not discount his message at all.
And it is irresponsible to claim that they do.
Not at all. Dave's position is black and white: nobody should ever have or use a credit card. Period. He leaves no room for responsible use of credit cards as a financial tool. All I've done is point out that they can be used by financially responsible people safely. If you feel that that doesn't include you, then by all means cut up your cards.
But Dave's strategy is a poor choice for people who are financially responsible since it removes a useful tool from your financial toolbox.
I've read this before and I addressed it in the post you were responding to:
Since my family is disciplined to pay off the card each month...when we use the card it's emotionally the same as using cash since we know that we're going to be writing a check to pay that purchase off when the current billing cycle closes.
I guess I should mention that the bulk of the card purchases each month are just your typical household spending: phone bill, Internet bill, propane bill, gasoline, etc. It's hard to imagine that I'm spending more my Internet service (for example) simply because I use VISA to pay for it instead of writing a check. The studies that you and Dave reference are dealing with people making more discretionary purchases which make up a small portion of our monthly charges on the card.
Again, it's all about using tools safely.
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