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Originally Posted by dealsaver
Dave Ramsey isn't the worst of the financial Guru's, but I certainly wouldn't follow all of his advice without figuring out if it makes sense for you first(like paying off low interest low balance credit card accounts before high interest large balance credit accounts. That's nuts!) . Personally, I think it's foolish to pass up an opportunity to take advantage of 0% credit card offers or other forms of low interest debt when you invest the proceeds at a higher guranteed rate and know how to manage your credit properly. Plus credit card rewards cards can used to enrich your life by earning free cash, free travel, free college savings, etc. I would be materially worse off financially if I followed all of Dave Ramsey's advice.
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Dave Ramsey's advise can't get people into trouble, there isn't anything wrong with it. Getting out of debt is only a good thing--and from what I've listened to his advice is pretty spot on. There are some people in the world (such as you) that can have enough self discipline and motivation to use credit cards for rewards and continually pay off the higher interest accounts regardless of amounts owed. Although if there is a balance on those cards, you aren't "earning" anything anyway, I fact I'm assuming you realize.
Most people want to see their balances go down quickly so they keep with it, and I believe his advice to be advisable for the average person. If there are two accounts, one with a balance of $1500 at 15 percent interest and one with a balance of $500 and a 12 percent interest rate, I'd pay off the one with 500 to get it out of the way, then apply that payment to the other outstanding balance. Would I be "losing" some money to interest on the other account? Sure, but I'd be seeing the lesser one go down much quicker, so I'd stay on course. In the grand scheme of things, you have to STAY on the program and losing a few dollars here and there isn't a big deal. Just like switching money from bank to bank for .5 percent interest. . .waste of time IMHO.
And getting credit card offers for zero percent so you can transfer balance is a risky game indeed as one late payment sends you into "default" and with that a much higher APR--heck, sometimes if you pay late on ANY type of payment they "default" you. If you have to do that more than once you're just moving your debt around and not really attacking it anyway. I'm of the belief that if you have credit card debt you get rid of all of them until its paid off, and who needs another credit card anyway? Lol. That said, the zero percent transfer DOES work for some people and it makes perfect "money" sense, but the average transferee doesn't utilize it correctly, which is why they send them out en masse. The bottom line is this: people have to take action with a plan they will stick with, and for most people that isn't usually the one that makes the most money "sense" but rather emotional "sense".