Temptation: would you get a credit card justto get the juicy discount?

[MonkeyMama]

No one that is wealthy would say that got rich off of rewards.

Hmmm, I don't think anyone said they get rich off rewards.

Personally, I find these type rewards pretty lucrative though. Thousands of dollars over the years. Last year alone I might have made $1k in credit rewards.

That said, I don't have credit self control issues. IF you can't control yourself with a credit card, or bother to read the fine print, it's not worthwhile. I think we can all agree with that.

[littleroc02us]

Thank you, Dave Ramsey.

Yes, you won't get rich this way, but you won't get rich clipping coupons either and I don't see anyone saying that isn't worth doing. If it is worth clipping a coupon to save 50 cents, why isn't it worth taking a credit card to save $50?

I know, I preach the man someday's don't I.

Steve you know what my answer to that will be? clipping coupons and buying things with cash has no risk, but taking out a credit card and borrowing upon it is risky. The usual addition to that would be you could lose your job, pay the bill late and get a fee, you could run up your balance to high, etc.....

[disneysteve]

Steve you know what my answer to that will be? clipping coupons and buying things with cash has no risk, but taking out a credit card and borrowing upon it is risky. The usual addition to that would be you could lose your job, pay the bill late and get a fee, you could run up your balance to high, etc.....

And here is where I disagree with Dave. His advice is very good and appropriate for many, many people, but it isn't appropriate for everyone.

I have a portfolio worth nearly half a million dollars and my only debt is a mortgage for about 80K. I'm not DR's typical listener. Right now, I probably have somewhere in the neighborhood of $10,000 in my checking account. Let's say I am heading to Best Buy tonight to buy a new LCD TV for $1,500. I have the money sitting in my account ready to spend. When I get to the store, though, they offer me a 10% discount for opening a Best Buy card. So I can pay $1,500 cash or take the card and only pay $1,350. Either way, the purchase will be paid for in full within 30 days no matter what happens. I could mail in a check tomorrow. Even if both of us lost our jobs tomorrow, I would still be able to pay for the purchase in full and on time. I fail to see any risk in that scenario. Of course, I'd then close the card, destroy it and never deal with it again.

[littleroc02us]

And here is where I disagree with Dave. His advice is very good and appropriate for many, many people, but it isn't appropriate for everyone.

I have a portfolio worth nearly half a million dollars and my only debt is a mortgage for about 80K. I'm not DR's typical listener. Right now, I probably have somewhere in the neighborhood of $10,000 in my checking account. Let's say I am heading to Best Buy tonight to buy a new LCD TV for $1,500. I have the money sitting in my account ready to spend. When I get to the store, though, they offer me a 10% discount for opening a Best Buy card. So I can pay $1,500 cash or take the card and only pay $1,350. Either way, the purchase will be paid for in full within 30 days no matter what happens. I could mail in a check tomorrow. Even if both of us lost our jobs tomorrow, I would still be able to pay for the purchase in full and on time. I fail to see any risk in that scenario. Of course, I'd then close the card, destroy it and never deal with it again.

Why are you only comparing the situation to someone is doing very well???? These statistics aren't the average situation for most people, so are you saying that this is the average american? No way, according to the MSRS 87% of retiree's from the U of M don't have over 100k in retirement at age 65. Your talking about someone that is well to do, not a person who is living paycheck to paycheck. Those are a big majority of David Ramsey callers. So for the average person, paying cash and clipping coupons is always less risky then borrowing money from a credit card. That is a fact!

[disneysteve]

Why are you only comparing the situation to someone is doing very well???? These statistics aren't the average situation for most people, so are you saying that this is the average american? No way, according to the MSRS 87% of retiree's from the U of M don't have over 100k in retirement at age 65. Your talking about someone that is well to do, not a person who is living paycheck to paycheck. Those are a big majority of David Ramsey callers. So for the average person, paying cash and clipping coupons is always less risky then borrowing money from a credit card. That is a fact!

I agree. I am not the typical American at all - didn't mean to imply otherwise. I'm weird, to use DR's term. Normal is broke. (See, I can channel DR, too. )

I was just trying to make the point that while Dave's advice is generally sound, it doesn't apply to 100% of people. So when giving advice here, you need to keep in mind that some of the posters, like myself, are among that group for whom Dave's advice doesn't always apply.

If the person asking the original question was a typical DR caller, my response would certainly be different and I'd tell them no way in hell should they take out a credit card just to get a discount.

[littleroc02us]

I agree. I am not the typical American at all - didn't mean to imply otherwise. I'm weird, to use DR's term. Normal is broke. (See, I can channel DR, too. )

I was just trying to make the point that while Dave's advice is generally sound, it doesn't apply to 100% of people. So when giving advice here, you need to keep in mind that some of the posters, like myself, are among that group for whom Dave's advice doesn't always apply.

If the person asking the original question was a typical DR caller, my response would certainly be different and I'd tell them no way in hell should they take out a credit card just to get a discount.

Totally agree!

[Naz56]

Yeah, I'd go for it. The discount will probably give me a good deal anyway so why not?

[NolaP]

Maybe you can just look on ebay or somewhere else and find a discount on the items you are looking to buy that would equal the $40 reward, and then you won't need to go through the hassle of applying for the card and then canceling it. Bargain shopping is so much more rewarding than paying full price for something.

[canada94]

Just remember to pay the card off in FULL every month, it will be fine,

[Frugal]

No. I don't use credit cards, and some people get one and then the company does not honor the cash amount you are supposed to get starting out, say $100, or the discount you are supposed to receive. This is what happened to my family member. The credit card companies don't care about ripping people off; in my opinion, they are just in it for making money, like any other business. Credit cards are certainly a "tricky business", and usually end up costing you money, rather than saving money in the long run.

[debtfreeme]

Nope.

[Bades]

No. I don't use credit cards, and some people get one and then the company does not honor the cash amount you are supposed to get starting out, say $100, or the discount you are supposed to receive. This is what happened to my family member. The credit card companies don't care about ripping people off; in my opinion, they are just in it for making money, like any other business. Credit cards are certainly a "tricky business", and usually end up costing you money, rather than saving money in the long run.

I don't quite get people that don't use credit cards. How do you build up your credit, do you want to buy a house one day? I've had a credit card since I was 18, I bought my first car (23 now) and I didn't need a parent to co-sign, the car dealer said I had great credit (750).

Credit Cards are great if you don't them overtake you. My credit cards points program is also great. Over the last couple years I've accumulated over $300 in gift cards to Amazon, I love Amazon!

If you pay your CC off monthly and never miss a payment, a credit card will never cost a single cent throughout your lifetime.

[woodie96]

I always do the lowes or home depot credit card when I buy something large. When DW and I were building our deck, we saved over 280 bucks on the material. when the card came, paid it off in full. So a good savings IMHO

[woodie96]

I always do the lowes or home depot credit card when I buy something large. When DW and I were building our deck, we saved over 280 bucks on the material. when the card came, paid it off in full. So a good savings IMHO

[MegaMagma39]

Definitely not. You may save money on that one purchase, but think about all of the interest you'll have to pay over time. That is one temptation that you should absolutely resist!