I have seen so many friends talk about the Money Makeover by Dave Ramsey. I was curious about it so I borrowed it from my friend down our street. I love self help books. I remember when I first started having kids, I was constantly reading books about how to discipline in love. Anywho...I was happy to know we have already been doing the things he suggests. I'm really enjoying it. Given...I'm only a little over halfway through the book but, so far so good....all except for 1 thing.
I can't get over all the negativity about Credit Cards. I believe it's wise for those who use CC foolishly to cut them up and get rid of them. I know that he says 75% of airline miles are never redeemed etc.etc...I've read that but I see what has worked for us and I don't agree with it.
We use our CC like a debit card. As soon as I make a purchase I take it out of our checking account, just like I would a debit card. We pay it off every month (because it's already out of our checking account, of course I match the #'s first). We have never had CC debt, we don't pay late fees or any other penalties because like I said, the money is already taken out to pay it off every month. The difference is, at the end of the year we have over two hundred dollars in cashback to use for Christmas. Whereas, the interest from the bank would be umm...two bucks? umm....2 bucks to 200 is a big difference. I feel like I'm using the CC company instead of them using us. Make sense?
We have been doing this for the last six years or so. We don't use our CC for emergencies...that is what the rainy day/emergency fund is for. We don't buy frivolously either. Like I said before, we use it like a debit card. So that's my disagreement, thoughts anyone?
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6 comments:
That is a really good point and an excellent example of self control. I think it's all about finding what works best for us.
We use our credit cards in exactly the same way. Ours is through Amazon, so every year our entire Christmas, as well as birthdays are paid for. It's awesome. Also, using credit cards responsibly is a great way to build your credit. It's worked great for us.
Sandra, I totally agree. That is how we use our credit card, and it is the only way to use a credit card. Anyway else I agree with Dave Ramsey though because used those ways it is irresponsible.
We got this book for our wedding and has helped us get out of debt a lot quicker than we could have by ourselves. I think generally the book was written for those that do have issues with credit cards or credit in general and not for those that are wise with their money. I agree with you that CC's can be great for rewards and such, I just think he probably was keeping in mind those that have little self control, when he wrote the book and I think for those it is best not to even have the temptation a CC can bring. We have 2 just for big emergencies (bigger than our emergency fund) and sometimes we're tempted to use it for something we want now that we don't necessarily need at this time. But this all stems from getting married later in life and having a lot of things that we wanted that we didn't need and couldn't afford at the time. Maybe one day we'll be responsible enough to have a rewards card without the temptation of using it unwisely. :)
IF you can be disciplined like you guys are, then that's awesome. But people like us are not that disciplined and always end up spending more than we should and say we'll pay the rest, but we never did. So, we are like most people in America that he's really talking to and don't have one at all. Most people in America are NOT disciplined enough.
Mark and I do it very much like you do. We don't pay late fees, we pay everything in full every month. It's how we build our credit. We don't go out and buy things unless we know we have the money to buy it. Recently we've had some car troubles and have needed help from family to pay it off, and our "rainy day" funds are practically depleted. But, I guess that's expected in our state...but we still try to be smart with our purchases. No new couches for us on a CC...no matter how much we want them. :)
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