Not sure debt free is a good thing !

LOL! What a claptrap of nonsense. If you can't understand that buying three sweaters and getting one free is absolutely nothing like getting points or cash back for buying things you were going to buy anyway, I don't think there's anything anyone can say to help you.

 

please feel free to point out the errors of my logic. I am here for enlightenment, educate me, if you disagree, don't attack my argument, point out its fallacies.

Perhaps it is not me that misunderstands, but you.

 

This is on the interweb so it must be true.
"
What is an extended warranty?
The extended warranty offered by your credit card typically adds up to a year of additional coverage to eligible purchases. It mirrors the terms of the original manufacturer’s warranty — for example, if the original warranty covers only manufacturing defects, then the extended warranty will do the same.

Charge the item to your card that offers the coverage, and save your receipt and the product’s warranty documentation. If the product breaks after the original warranty expires, you may still be able to be reimbursed from your card’s payment network via statement credit or check.

These extended warranty policies don’t cover all credit card purchases. Computers, cars and items without manufacturer’s warranties are generally excluded, for example. But if you have a broken dishwasher or a malfunctioning video-game console, you’ll likely be eligible for reimbursement."

A cash purchase doesn't offer this I don't think. Hmmmmm!

Lost_N_Austin

 

You seem to be trying to equate buying on a two for one sale which has absolutely nothing to do with credit cards that offer rewards points.

@william tele (myself and others) are saying:

1) Get a CC with a rewards point component (pays you a small cash/points back based on usage)

2) Use it to purchase things you would normally buy with cash (groceries, gas, etc...)

3) Pay it off fully every month, on time. No interest, no late payments.

4) You will make some money doing this if you follow all of the steps, providing you don’t have late payments or carry a negative balance.

We do this. We have 1 card for our business and another for home. Our business expensive run anywhere from $3k - $5k per month but we pay it off every month. The domestic card buys groceries and whatnot and doesn’t run that high but it gets paid off 100% each month too. Treat it like a debit card and don’t run a balance and you will make money doing it.

We started this maybe 15 years ago and we use it for the vacation fund. On our card it can be used for hotels and air travel. Probably other things too but that’s what we use it for. Because both cards are part of a banking package, the fees are waved so as long as we don’t run a balance, it’s free to use and we get the holiday money. Not all cards do this so check what’s available.

 

Credit is just a tool, and it can be really useful. Having a good credit score could also be considered as a form of insurance, if things hit the fan it could keep you from losing the things you have worked for and paid for. A credit card gives you options if and when you travel that are hard to do without i.e. a roof over your head and a rental car. Why wouldn't you want one?

Even if you never travel, as others have suggested, a no annual fee credit card, used for things you would buy anyway (groceries, fuel etc) and paid off in full each month costs you nothing, and you get a statement each month that shows you what you spent. EZ, and you get an excellent credit score.

I have a handful of cards. All are free except an AMEX, which costs me $100 a year. The AMEX card saves me many times that amount each year because I fly so much, and never have to pay baggage fees.

 

I have found that shooting for becoming debt free does not employ a strategy for buying things on a credit card. Becoming debt free usually employs having the will power and planning to avoid buying anything on credit. It's kind like a woman trying to be just a little bit pregnant, you either are or you ain't.

 

Where I live in Canada, they used to lock the card out if you travelled outside your normal route. I used to have to call them up and let them know I was travelling so they knew I was going outside of the normal pattern. That is no longer a problem. They stopped that practice 4 years ago according to my recollection. If I travelled somewhere outside of North America I might need to but in my travels to Mexico and the US, I no longer need to let them know.

I do like the itemized statement at the end of the period. It makes it really easy to review and track expenses.

I don’t know if the Free Car thing can be done up here. I know nobody who has done that.

 

I'll do my best, however, I'm already puzzled. You said "If you disagree don't attack my argument, point out it's fallacies". Attacking your argument and pointing out it's fallacies are pretty much the same thing...but here goes.

There is no way to make the above make sense. I'm not buying anything I don't want or need. I bought one sweater and my CC company adds a fraction of that sum to my hotel credit. I'm not spending thousands of dolars to get $20 back, I don't care for dougnuts and it's not a carrot, it's free lodging.

Of course it's marketing, but has nothing to do with how much you spend. Of course you'll get more points or cash back the more you spend, but even the annual budget of a normal family will reap weeks of free lodging or points without costing a thing. And it's about percentages. Finance companies make their money from people who are not disciplined enough to pay their balance every month. In spite of people who do pay off every month...and the charge offs of deadbeats...the percentages of people who carry a balance and pay high interest keep them well in the black.

There is no argument that big business is designed to screw stupid people. You have to pay attention. The amount of overpayment to businesses, health care, utilities and etc. is obscene. You have to look at every bill and check every dollar or you WILL get screwed...but it won't be because you use a credit card to build up free lodging or cash back by paying for things you want or need.

 

So...if you want to buy a new car and your money is sitting somewhere drawing 5-10% and because you have excellent credit you can get 2% financing on the car? Why would you give away the money?

 

Cash is king.
Debt free is good. imho

 

Yes, financing can be a good tool as well, if you have the money on hand and the discipline to do it right.

When we sold our townhouse and bought our house (13 years ago), we remodeled it right at the get-go. Tore up the floor, pulled most of it down to the studs, rewired, insulated, drywall, flooring, and put in a new kitchen. I did all the work so we could afford it and I’m barely recovered from it now but we financed the appliances at zero interest for 5 years on about $7,000 for the new stove, dishwasher, fridge and convection microwave hood fan. We had the money and put it in a 5 year term deposit so that once the 5 years was up, we paid in full and made some money on the interest. It wasn’t a big win but a few hundred bucks. They of course are betting that we wouldn’t pay in full after the deadline and would pay big interest charges.

 

Like you said, in one financial decision you made a few hundred dollars. If you move through life watching every dollar and maximizing every opportunity, it compounds. The world today is trying to get every cent it can from everyone and our material needs include expensive electronic gadgets and other things we never "needed" in the past. You just have to decide how to get as much as you can the best way you can.

 

I have been in the exact situation you describe, and I did indeed pull the money and pay for the car. I don't like debt period. I do use a credit card to pay for some things, but it's paid the day the bill comes. Yes I still pay bills the old fashioned way, even though it makes no sense to! It is doubtful that all but very few on this board have even known the poverty I experienced as a child. When I buy something, I don't want to have even the remotest chance that someone might take that something away from me for defaulting on payment.

When my son bought his Vette, he paid for it. Though someone might steal it, (I hope not) no one is going to repossess it. I do not profess to be right in my thinking, but to think any other way would not be me. As I've stated before, I was once joined to a woman who if she had stumbled onto a 90 foot steamship just outside Mojave California and could have bought it on the promise to pay, she would have snapped ii up in a heartbeat. Her motto was to set a budget that contained no room for error, and then exceed it by at least fifty percent. I don't like debt. I finished paying for some of her budget philosophy seven years after the demise of our union.

 

I can fully understand you're reasoning and reasons for it. I admire anyone for being debt free. This can be looked at in two ways though. When I use someone else's money to my advantage I don't actually consider it "debt" if I have the ability to pay that balance with money I have in investments. It's just managing finances.

You were advancing the argument that it's good to be "debt free" and I certainly agree with that statement 100% and that it's better than owing money you don't have.

 

Well, you know since I reread your post I got to thinking. At my age, if someone would be dumb enough to sell me a car on the credit at one or two percent interest, I should maybe take advantage of that and buy me a new car, and see if I could manage to go ahead and drop dead on 'em before I paid it off and complicate the shilt out of things!

 

I'm thinking "CORVETTE"...

 

On my way!

 

So you drop dead and Toto gets stuck with the rest of the payments.

 

Way I figure it, it's every man for his self when it comes to hand grenades, cars, and debt. Besides, old Toto ain't no dummy, he'd just drive around in it lookin' for dates 'till he found him a rich widow woman to make the payments!