Not sure debt free is a good thing !

Discussion in 'Bad Dog Cafe' started by 83siennateleguy, Aug 13, 2018.

  1. JustABluesGuy

    JustABluesGuy Friend of Leo's

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    It all seems somewhat counterintuitive doesn’t it.

    You have to use credit to get credit. People with lots of cash flow, and no debt are good credit risks and one would think should have a very high credit score, but you have to use credit to get credit.

    I’ve read that credit card companies call people who pay off their debt monthly, and pay down large loans early “deadbeats” because they don’t earn as much interest off them.
     
  2. beagle

    beagle Friend of Leo's

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    I neither have, nor wish to have, a credit score. I left all that behind when the mortgage was paid off.
     
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  3. heltershelton

    heltershelton Tele-Afflicted

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    i KNOW yer me pa! ill come ther and out drink ya!!!
     
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  4. heltershelton

    heltershelton Tele-Afflicted

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    ill punch ya in the face, just ta proove im right....
    then ill sing the lumberjack song....
     
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  5. raysachs

    raysachs Friend of Leo's

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    As nearly everyone has said, have one credit card, use it for stuff you’d buy anyway, pay it off every month,, pay no interest, but then you’ll have a fine credit score for the variety of reasons you might need a good credit score along the way. I haven’t carried any debt in about 10-15 years, but every now and then someone needs to check our credit score for something or other and that one credit cares keeps it high. The only interest I’ve ever paid on a credit card was years ago I spaced out, paid off the balanace a couple days late, and I think it cost us $20-25 or something...

    -Ray
     
    Last edited: Aug 14, 2018
  6. jvin248

    jvin248 Poster Extraordinaire

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    .

    Due to credit card fraud, Visa and M/C have gotten overly protective and if you happen to get gas at a station or buy groceries at a store in an area you don't normally shop in they may deny the payment(!), same grocery chain you use but forty minutes away because it was next to a work meeting and you grabbed a couple items on your way home. Get 'stranded' like this and ask what's the reason for having that credit card again? Drop them.

    Get a Discover card that pays you cash back not accumulates points for 'a trip' or 'a car' as they always find a way to drop off/reduce your oldest points before you use them. Link your Discover card to Amazon so when you are buying that new output jack for a used guitar you are repairing you click on 'use points' and get it for free. No calling the card people up periodically to send you a check and clear the points. Just easy to manage as long as you use Amazon for some purchases.

    Pay off the card monthly. The card monthly bill will summarize your purchases if you care to see where the money goes -- for expense reduction tracking.

    As for cars....



    .
     
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  7. 1293

    1293 Poster Extraordinaire

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    Zappos had free return shipping. My wife ordered $1200 worth of shoes. Chase froze my card. Despite really late medical payments thanks to constant insurance messups, our credit score is still about 835.
     
    Last edited: Aug 14, 2018
  8. Boubou

    Boubou Doctor of Teleocity

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    [​IMG]
    At least in my part of the world
     
  9. magicfingers99

    magicfingers99 Friend of Leo's

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    you're not just "using the credit card company", they are using you as well, they have a complete profile of your wants, needs, and desires which they sell to marketing companies, govenment entitities and university among others.
    you are not a human, you are a data point, and the more details that they can accrue around that datapoint, the more valuable that datapoint becomes to their corporate operation.

    Why feed the demons. I use my credit cards, when I can't pay any other way. Points are just a carrot hanging out there to keep you on their treadmill, running after that carrot.

    Why do you think they give away points? Just nice guys and girls looking out for a a chap like you? The financial system is built to screw the people that borrow money, it is how and why the system works, if you think you are getting anything for free, you don't understand whats going on.
     
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  10. magicfingers99

    magicfingers99 Friend of Leo's

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    sounds like she may need to buy some extra feet to use all those shoes.
     
  11. Rasmuth

    Rasmuth Tele-Afflicted

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    no action on your credit for 2 years, your score zeroes out.
     
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  12. NashvilleDeluxe

    NashvilleDeluxe Tele-Holic

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    Ugh...I resisted chiming in for a while, but the conversation is getting dumbed down again.

    Back to the original statement...debt-free is a GREAT thing, especially if you don’t have deep pockets or strong, secure income. There are tangible side-benefits to the discipline it takes to get and stay there.

    We’ve been debt free for years, but both were broke for years post-university. Today, we use the home line of credit to pay cash for USED cars and when life kicks you in the hiney (new fencing around the paddock). She keeps a points-reward credit card that we zero each month (just paid for two airline tickets with it).

    Neither of us is a frivolous spender, and we’re happier living on our own cash than using other people’s money (I have a BBA and she an MBA, so we understand the allure of OPM).

    Our jobs are entirely different; she’s self employed and has to fund her own retirement, and I only keep 50% of what I earn, but have an indexed retirement waiting at the end of it all.
    Much of it depends on YOUR situation, but the one blanket statement I can make is that it is much less expensive to be debt free than to pay a premium on the things you need (house, car, education, emergency funds). Once you get on the plus side of debt, life gets easier, and certainly less stressful.
     
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  13. buster poser

    buster poser Tele-Holic

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    It's only the mortgage for us now; cars are paid for, etc. I don't really *need* credit--not sure that many do--but marching our FICO from the high 600s to north of 870 took no more work than borrowing sensibly + paying on time over a period of about 20 years; I don't aim to let it slip. I also don't aim to take on debt any time soon (unless my old F150 finally gives up the ghost... I spent about six large on it this year just trying to avoid getting another one).
     
  14. magicfingers99

    magicfingers99 Friend of Leo's

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    if you think you make money by buying stuff with your credit card, you really don't understand what your are doing. Its like buy 3 sweaters get one free, nothing is really free in that statement, they just amortized the cost of the 4th sweater over the prices of the other 3. There was no free sweater, despite what you thought. If you have to spend a thousand dollars to get 20$ back, you could have saved a thousand dollars by just giving yourself 20 bucks. Its a carrot. jeez if I just buy another 1,000$ worth of donuts, I'll get anothter 20$ back.

    Its not finance, its marketing. and the only people it makes any sort of sense for is people who can churn tremendous amounts of cash per month, like 50,000 per month, then you might get a little something back that is substantial, but if you have the means to burn 50k per month, maybe that 12k per year you're getting isn't really that much, when you could earn that same amount in interest by just sitting on the money.

    Everybody loves points cause their "free" even people who understand nothing in life is free, somehow thing points are "free" cause the bank told me so. Banks make car salesman look honest. Look at Wells Fargo if you want to see just how slimey big banking is.

    There's alot of kool-aid in the world, and a lot of thirsty people. I'll drink water thanks.
     
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  15. bottlenecker

    bottlenecker Friend of Leo's

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    Well if you really want to be debt free, why do you need a good credit score?
     
  16. Area51

    Area51 Tele-Holic

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    Yeah, I've pretty much always been debt free. However, when I paid off my house my credit score went down. It's a weird system we have.... Fortunately, it doesn't take too long for it to recover.
     
  17. notmyusualuserid

    notmyusualuserid Friend of Leo's

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    And mine. I've never had a credit card transaction declined anywhere in the world

    I don't know if I find that comforting or worrying...:)
     
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  18. noah330

    noah330 Friend of Leo's

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    Your mistake wasn't getting out of debt, it was closing your credit lines. Had you left your cards open your score probably wouldn't have dropped.
     
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  19. teledude66

    teledude66 Friend of Leo's

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    I'm the last to be giving financial advice, but where does all the money go that you were paying debts with? If you keeping paying that money to your savings account, barring unforeseen problems, that money would pay for whatever you "need" credit for. The only thing I could see needing credit, that you couldn't handle on your savings, would be serious medical issues, and even then I doubt a good credit score, or credit in general would matter.
     
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  20. rcole_sooner

    rcole_sooner Poster Extraordinaire

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    I like the demons.

    :twisted:
     
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