Borrowing

[Broompilot]

Have been listening to XM and Bruce in the evenings. Although I would much rather prefere to be debt free than borrow $ I think he proves a good point that I have always argued and on here as well.

Borrowing is not bad as he pointed out.

Not Managing it is what is bad, I have always looked at it as something not to be managed but eliminated. Both have good points.
He also mentioned how easy it is for this to become a nightmare if not taken serious and how quick it will turn into a Stupid Tax.

So I ask all the Dave Ramsey fans out there is he really that correct? Is credit and credit card useage all that bad? I find using a credit card out from Wilco for there 5% rebate on fuel a $ saving tool, paid off every month in full, one Visa for emergencies and one for me personaly when I want to. Is that so bad if they they are paid off every month?

 

[arkjarhead]

I'm no expert but I would think paying it off every month and staying on top of it could help improve your credit. My first credit was while I was in the service. A visa card through capital one with a $500 credit limit. Id usually take my girlfriend out to eat and a movie on it once amonth and then pay it off. it helped me out being you with no credit.

 

[Moot]

Broom, I'm not a Dave Ramsey fan (no XM radio) but I think using credit cards as a financial tool is great. Especially ones that give reward points or fuel discounts. But like you said, the trick is to be able to manage your credit cards. That means paying it off in full each month. Never carry over a balance. If you need a loan you can get better rates from a street corner shylock than a credit card company.

 

[fastman_1]

My way that works for me is a Fuel Card, paid off each month and Cash for everything else,






































Owner/Operator since 1979
Expediter since 1997
B Unit Semi Retired
Somedays are Diamonds and Somedays are Stones
Home is Wherever you Park.
The Price of Freedom is Written on the Wall.

 

[arkjarhead]

I've known a couple of people with extremely good credit who have a no intrest credit card. That be the way to go if you could. At least I would think so.

 

[TeamCaffee]

Broom,

Dave's policy is if you use a credit card you take on a lot of risk. Even though you pay it off every month what happens if next month there is a catastrophe? You cannot pay off the credit card and then you have that mess. The other problem he discusses is that if you make all of your purchases with a credit card you have a tendency to spend more then you would if using hard cash.

That being said yes we do use a credit card but for very little and yes we pay it off every month. We feel confident that we can do this but you cannot predict the future and you can have that catastrophe that wipes out all of your savings and you have nothing left to pay the credit card bill.

Another thing Dave talks about is the FICO or I love debt score. I feel as if we are between a rock and a hard place as we will not be able to pay cash for our next truck. So we have to try and keep some sort of credit score and the only way I know how to do it is use the credit card. We sure the heck are not going to purchase something on credit.

 

[pelicn]

I guess you could say we are "modified" Dave Ramsey followers. We have a credit card, but it is paid off each month. We have an emergency fund so that we don't have the "OMG I don't have the money and have to use a credit card" issue.
As far as the "I love Debt" score, What do you need a good credit score for, if you pay everything in cash?

 

[jeffman164]

I buy everything with credit cards . Pay in full each month. If didn't have the $ in bank - then wouldn't but it. Pretty simple concept. LOVE the $ benefits from the rebates !!!!!!

 

[LDB]

I like Dave Ramsey and I pretty much agree with him. I do disagree about the credit card though, provided you pay it off in full every month. You have to make sure you are buying nothing with it that you didn't already budget as a cash expense. By leaving the cash in a savings account at your bank drawing laughable interest and getting the reward from the credit card you come out ahead. At the end of the month, if an emergency happens, you are no worse off than if you'd pulled bills out of an envelope and handed across the counter to pay. You were only paying for regular monthly cash budgeted items anyway. The problem is people don't have a budget so they don't know what they have allocated and what they don't. They use the credit card for whatever looks good and whatever the whim du juor is. Then they can't pay it off before the interest starts. Once that happens they're screwed.

Leo Bricker, 73's K5LDB
OOIDA Life Member 677319, JOIN NOW
Owner, Panther trucks 5508, 5509, 5641
EO Forum Moderator
----------
Support the entire Constitution, not just the parts you like.

 

[mrgoodtude]

>I like Dave Ramsey and I pretty much agree with him. I do
>disagree about the credit card though, provided you pay it
>off in full every month. You have to make sure you
>are buying nothing with it that you didn't already
>budget as a cash expense. By leaving the cash in a savings
>account at your bank drawing laughable interest and getting
>the reward from the credit card you come out ahead. At the
>end of the month, if an emergency happens, you are no worse
>off than if you'd pulled bills out of an envelope and handed
>across the counter to pay. You were only paying for regular
>monthly cash budgeted items anyway. The problem is people
>don't have a budget so they don't know what they have
>allocated and what they don't. They use the credit card for
>whatever looks good and whatever the whim du juor is. Then
>they can't pay it off before the interest starts. Once that
>happens they're screwed.
>
>Leo Bricker, 73's K5LDB
>OOIDA Life Member 677319, JOIN NOW
>Owner, Panther trucks 5508, 5509, 5641
>EO Forum Moderator
>----------
>Support the entire Constitution, not just the parts you
>like.

You are the rule and not the exception Leo..
Great post and great feedback as I listen to DR every night at 3AM to 6am and I have for 4 years..
Problem is I keep listening...
WTF
Mike

 

[Paul56]

>So I ask all the Dave Ramsey fans out there is he really
>that correct? Is credit and credit card useage all that
>bad? I find using a credit card out from Wilco for there 5%
>rebate on fuel a $ saving tool, paid off every month in
>full, one Visa for emergencies and one for me personaly when
>I want to. Is that so bad if they they are paid off every
>month?

It depends on how the credit card is being used.

If the charges are in the budget and the card is paid off in FULL every month, then it really does not matter if you charge $100 or $50,000.

Credit card for emergencies is also acceptable, but we have funds stashed away to pay-off an emergency credit charge. Personally, I would not want to see that emergency charged carried from month-to-month.

Just make sure and pay it off in time too. One time a few years back we missed the deadline by one day and were dinged $800 in interest. Might as well have been throwing $50 bills out the window as we were rolling down the highway.

 

[ATeam]

An alternative to using credit cards as an emergency backup is, of course, to maintain financial reserves that you can use instead of a credit card. People here in the Open Forum have recommended keeping enough money in the bank to cover three to six months of expenses.

Drivers with good credit have the additional option of establishing a line of credit with the bank. If temporary cash flow problems develop, the line of credit can be tapped at rates far better than credit cards provide.

The most obvious solution of all is to live within your means. Don't spend money you do not have. Make it first and buy what you can afford. That does not rule out debt for things like a house or truck, but be dead certain to keep the payments within the range you can afford.

 

[rmctt2]

Heres A Good One For You Guys ......
My roomate who is 76 yrs old and has a credit score of 764 ( He just recieved report from Equifax ) , he recieved a letter from his car Insurance Company last week and he lost his Premium Discount because according to them his Credit is fair and he has not applied for any new credit in last 6 months...
What a F..... Joke !!!
A score of 764 , people dream of that !!!
How do these Insurance Companies rate people ????
I told him to dump the lousey company ( Name of Company to be nameless---One of the Larger, well known Ins. Companies )
I got a chuckle out of this because he always bugs me about my terrible crtedit !!!! LOL
Thanks
P.S.
Does anyone know of a Loan Company that deals with People that have not too good Credit , I want to purchase a New Sprinter ???
Thanks