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Debit Cards: $50 spending limit per purchase on the horizon?
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David Incorporated Esq.
Member
For the first 15 years of my 30 year mortgage I was investing the difference in a fund returning 8% on average. I now have a huge amount of money in this fund at 15 years making money for me and you're playing catch up.jmdajr said:
I use my credit card regularly too. Credit cards let you spend money you don't have. It gives you debt. How you can argue credit isn't debt is beyond me. Having to owe money is having debt. The problem with saying everyone should use credit cards is because lots of people can't use them responsibly, and they fuck up the economy and their lives. Maybe if you watched someone destroy themselves with credit cards you would understand. They are a great tool but they are not what anyone should be told to solely use.CrankyJay said:
MightyHealthy
Banned
Food stamps are on "EBT Cards" now...eznark said:
jmdajr said:
What? No. I'm not talking about getting hit by a car or some shit like that but shifts in the market and what not where getting a 30 year loan might be better than a 15 year loan, then perhaps refinancing later on (if we're talking about a mortgage).
btkadams said:
...we're saying that credit cards are great IF you use them responsibly. I have 50 dollars to spend. I want two dvds that cost 20 dollars each. I use my credit card knowing that I'll have that 50 dollars to pay off the 40 dollar bill I'll get.
the_log_ride
Member
CrankyJay said:
And debit cards, it seems.
Alucrid said:
yeah sure, all that is possible I suppose. If you get in on a low interest rate for 15 you will win though.
Alucrid said:
Sure ,it can be. Really, I'm just pissed at banks forcing you to get them. I mean they are not holding a gun up against your head, but that shit isn't cool man. You should use your debit card any way you want.
WOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOW
at this thread. Credit card haters and "lol debit cards" elitists? WTF?
I use debit cards for smaller purchases ( < 100 or 150 or so) because I can't be bothered to have tons of little payments (restaurants, most disposable purchases, etc) on a credit card statement that I will end up paying using my same checking account tied to my debit card anyways, building marginal credit, and any sort of rewards are minimal at best.
To me its like driving to Miami from New York while growing through San Francisco.
Larger purchases, even if I have the money, I'll put on my credit card for all the reasons stated. Usually I'll pay it off completely as soon as I get my statement.
This makes perfect sense to me. To exclusively use one or the other seems really weird.
Wish I saw this thread earlier.
at this thread. Credit card haters and "lol debit cards" elitists? WTF?
I use debit cards for smaller purchases ( < 100 or 150 or so) because I can't be bothered to have tons of little payments (restaurants, most disposable purchases, etc) on a credit card statement that I will end up paying using my same checking account tied to my debit card anyways, building marginal credit, and any sort of rewards are minimal at best.
To me its like driving to Miami from New York while growing through San Francisco.
Larger purchases, even if I have the money, I'll put on my credit card for all the reasons stated. Usually I'll pay it off completely as soon as I get my statement.
This makes perfect sense to me. To exclusively use one or the other seems really weird.
Wish I saw this thread earlier.
David Incorporated Esq.
Member
No, you don't "catch up". I just did math, and I didn't want to do math.jmdajr said:
250k mortgage at 5% interest.
15 year loan is 19xx a month (360k paid), 30 year loan is 13xx a month (480k paid). Investing the difference in a fund returning 8%, only for the first 15 years will leave you with an account worth 220k. You could then drain that account, pay off the rest of your mortgage and still have a hefty sum of money left in that account that could accumulate. You wouldn't do that though, because if you let it sit it would be worth >700k at the end of your mortgage.
Goro Majima
Kitty Genovese Member
All this talk of taking out loans to invest money into mutual funds, etc. is giving me flashbacks of 2007/2008.
There's a lot of risk involved with taking on a large amount of debt and then expecting your investments to increase substantially year to year. Also, if you're dependent on your annual salary, I can't say that it would be a bad thing to pay off most of your debts especially in this job market. Plus there are a lot of taxes that have to be paid on your capital gains when you go to cash out.
If it really was so easy as to take out a loan at 6% and invest it at 8% with little risk, banks wouldn't even bother lending people the money at 6%. That extra few percentage points is essentially the risk that the borrower has to take on.
Also, if a person had taken this advice in 2000 and invested in most anything, my understanding is that they more than likely would have broken even due to the housing market collapse. Which would mean that if you were having to pay 6% on the loan of this investment, you would have lost money.
There's a lot of risk involved with taking on a large amount of debt and then expecting your investments to increase substantially year to year. Also, if you're dependent on your annual salary, I can't say that it would be a bad thing to pay off most of your debts especially in this job market. Plus there are a lot of taxes that have to be paid on your capital gains when you go to cash out.
If it really was so easy as to take out a loan at 6% and invest it at 8% with little risk, banks wouldn't even bother lending people the money at 6%. That extra few percentage points is essentially the risk that the borrower has to take on.
Also, if a person had taken this advice in 2000 and invested in most anything, my understanding is that they more than likely would have broken even due to the housing market collapse. Which would mean that if you were having to pay 6% on the loan of this investment, you would have lost money.
Baraka in the White House
2-Terms of Kombat
Yeah fuck that noise.
+1 credit unions.
Whether or not which payment method gives you what rewards is kind of irrelevant. The problem is banks has every incentive to discourage use of a system that essentially prevents you from spending what you don't have in lieu of one that lets you get neck deep in debt. I'm not saying it's the bank's fault that people are irresponsible with money, but you'd have to be more than a little naive to pretend that their motivation is as altruistic as, "But you'll get more rewards on credit hmmmm?"
+1 credit unions.
Whether or not which payment method gives you what rewards is kind of irrelevant. The problem is banks has every incentive to discourage use of a system that essentially prevents you from spending what you don't have in lieu of one that lets you get neck deep in debt. I'm not saying it's the bank's fault that people are irresponsible with money, but you'd have to be more than a little naive to pretend that their motivation is as altruistic as, "But you'll get more rewards on credit hmmmm?"
CrankyJay said:
Well I'll admit my credit card is a citi student card, so interest rate is terrible and rewards are meh. I haven't paid a cent in interest though.
I could probably be approved for a better card now that I'll build up some credit, but haven't had a lot of incentive to.
Still use my debit card more regularly.
\CrankyJay said:
sorry, i'm not meaning to jump the gun. it's just if i lived in the states my brother would be absolutely fucked by this news. he cant take out a loan or mortgage for another 7 years because his credit is so fucked. debit is a must for people like him, and i still find it useful too. he got into tens of thousands of dollars in debt by 20.
his original post said that people shouldn't use debit cards. i argued why people shouldn't just be told use credit. some people can't. EDIT: my brother is 24 and can't even get a credit card.Alucrid said:
CrankyJay said:
Well I have a 3000 dollar limit so if I incur a semi-high expense I at least have that.
TBH i don't even know how to look up my reward point balance. lol
EDIT: Figured it out. I don't incur enough expenses in a year (student on a fellowship) to really rack up any worthwhile rewards, but nice I guess.
David Incorporated Esq.
Member
Okay what did you do differently?jmdajr said:
TheChewyWaffles
Member
CrankyJay said:
Please explain yourself.
David Incorporated Esq.
Member
GAF is the worst forum I've been on for people not reading the thread.BigNastyCurve said:
Shit's nine pages folks, at least read the last two before you post.
TheChewyWaffles
Member
jmdajr said:
The math doesn't prove out your assertion.
Marty Chinn
Member
Wow, I had no idea there were so many people who don't understand credit cards. One thing that doesn't seem to have been mentioned is the nice thing about a CC is in case of an emergency. My CC has a pretty high limit which I never even come close to reaching on a monthly basis since I like to pay off my CC in full every month, but it sure is nice to know that in case of an emergency, I have that high limit at hand at my disposal. You wouldn't have that option with a debit card.
Here's how my shit is:
I use my debit card for everything (tied to a checking account with complete overdraft protection), but use it as a credit card (so I accrue points for my reward system). I usually keep a nice buffer of money in it so I never get too low.
I keep a credit card with a 3000 dollar balance, but never use it. Except for emergencies like car repairs, home repairs, dental procedures, prostitutes or things like that.
I do use credit cards when I buy furniture, home electronics, etc. Get those 0% financing deals or discounts they offer if you use their credit card. Pay it off, then close it out.
Last I checked, my credit score is in the mid 700's.
That's not how everyone should do it, but it's a system that works for me.
I use my debit card for everything (tied to a checking account with complete overdraft protection), but use it as a credit card (so I accrue points for my reward system). I usually keep a nice buffer of money in it so I never get too low.
I keep a credit card with a 3000 dollar balance, but never use it. Except for emergencies like car repairs, home repairs, dental procedures, prostitutes or things like that.
I do use credit cards when I buy furniture, home electronics, etc. Get those 0% financing deals or discounts they offer if you use their credit card. Pay it off, then close it out.
Last I checked, my credit score is in the mid 700's.
That's not how everyone should do it, but it's a system that works for me.
PflargBlarg
Member
jmdajr said:
If you use the same numbers that he did your math is going to be the same. What did you change to come out ahead?
The Technomancer
card-carrying scientician
I swipe a debit card, but always select credit option. What does that make me?
*very confused*
*very confused*
Zomba13
Member
I didn't know debit cards were so hated.
I don't get the hate.
And the protection/fraud stuff. My card was compromised (don't know how) and I was notified by my bank in the morning of suspicious transactions (I didn't notice as I had not checked my balance that day/the day before). They stopped the card, sent a new one first class and got all my money back in like 2-3 days or something.
Reason I don't have a credit card is because I'd rather pay with the money in my account now (or as soon as the transaction goes through) than wait till the end of the month to pay.
I don't get the hate.
And the protection/fraud stuff. My card was compromised (don't know how) and I was notified by my bank in the morning of suspicious transactions (I didn't notice as I had not checked my balance that day/the day before). They stopped the card, sent a new one first class and got all my money back in like 2-3 days or something.
Reason I don't have a credit card is because I'd rather pay with the money in my account now (or as soon as the transaction goes through) than wait till the end of the month to pay.
Or you could invest wisely, save wisely, make large down payments on large purchases, take a loan/mortgage on the difference and pay it off ASAP.
You don't need to compromise your long term savings in order to purchase equity. You can have long term savings as well as liquidity, and you don't NEED a credit card for it.
You just need to be responsible. I don't have any need for a credit card because I am building up a long-term savings portfolio as well as enough liquid assets that I can depend upon to reduce loan periods and principals to a minimum for larger purchases. That is the responsible thing to do. Save for the long term, and maintain liquidity to limit the accumulation of long-term debt
You don't need to compromise your long term savings in order to purchase equity. You can have long term savings as well as liquidity, and you don't NEED a credit card for it.
You just need to be responsible. I don't have any need for a credit card because I am building up a long-term savings portfolio as well as enough liquid assets that I can depend upon to reduce loan periods and principals to a minimum for larger purchases. That is the responsible thing to do. Save for the long term, and maintain liquidity to limit the accumulation of long-term debt
depths20XX
Member
I have pretty great credit and got a home loan just fine. Never used credit cards. I did pay off a car and have been paying student loans though. I don't think they're necessary for building credit as there are other ways of doing that.
I would like to get a credit card just to get those free airline miles though. Pretty good deal on some of them.
I would like to get a credit card just to get those free airline miles though. Pretty good deal on some of them.
Baraka in the White House
2-Terms of Kombat
ToxicAdam said:
Just to build on this, I've never even owned a dedicated credit card and have only used credit on dinky purchases where I was buying gas or food in places where debit wasn't working.
Credit score: 740
CC's aren't the end-all, be-all to financial fitness.
ok, it's really bugging me whenever i read threads dealing with money.
is it actually spelled "checking" in america? i live in canada and i always see chequing. it feels wrong when i read checking lol. do you spell cheques (as in "i'll write you a cheque") as checks too? i'm genuinely curious.
is it actually spelled "checking" in america? i live in canada and i always see chequing. it feels wrong when i read checking lol. do you spell cheques (as in "i'll write you a cheque") as checks too? i'm genuinely curious.
Baraka in the White House
2-Terms of Kombat
btkadams said:
Checks in 'murica.
WanderingWind
Mecklemore Is My Favorite Wrapper
btkadams said:
Checks. Checking.
btkadams said:
Yes https://www.bankofamerica.com/deposits/index.action?body=check_overview
Fake edit: beaten badly!
How is this for an example:
"You are writing checks your body can't cash."
vs.
"You are writing cheques your body can't cash."
More bad ass the American way!
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