Interest rates and Sears card ripoff

[Whitey]

I could pull money out of savings to cover it but leaving the balance the $11 in interest I have to pay will be nothing compared to the amount I save this month because I'M CHEAP and freak out about the cc balance, thereby saving money in the process, haha.

I'm not being a wise-guy, but I'm not following you in this sentence. Are you saying if you used your savings to get the refrigerator you'd only have $11 left or the $11 is the interest you'll pay on the card?

I'm not going to tell you what to do, but just know that the technique you are using very rarely works out in favor of the consumer.
If you were charging and paying off $10,000/month then I'd consider it, but for basic living expenses, the math doesn't work out.

If everything you charge netted you 5% back, you'd earn maybe $30-$40/month.

Then watch what happens if you carry a balance just one time in the next 12 months. All of the sudden your 5% cash back benefit turns into a 25% interest charge and all the work you did to beat the credit card company is gone.

[paddlenbike]

My "logic" often makes no sense to people, so you're not the first. To keep things simple, I do payoff my credit card every month. I'm going to accrue $11 in interest this month, one time only. Credit card interest rate is irrelevent to me for this reason...I usually make $200-300 per year in rewards from using the credit card and most years pay $0 in interest. This year I will pay $11 in interest, no biggie.

[Scuba]

Haven't read the rest of the replies.. but most of the credit cards these days have interest free (or very low interest) for the first year. Its all special promotions just to suck you in. However, if you read the fine print you'll see that that if you miss a payment the interest rate will skyrocket like a bitch.

After all the debt my parents got themselves in I'm just way to0 scared to even get a credit card. I trust myself somewhat but, at the same time I don't.

[Whitey]

My "logic" often makes no sense to people, so you're not the first. To keep things simple, I do payoff my credit card every month. I'm going to accrue $11 in interest this month, one time only. Credit card interest rate is irrelevent to me for this reason...I usually make $200-300 per year in rewards from using the credit card and most years pay $0 in interest. This year I will pay $11 in interest, no biggie.

Again, not being argumentative, just making conversation.

You are the perfect example of why this logic is flawed. You are guaranteeing me that you will NOT pay a single penny in interest to credit cards moving forward.

BUT, the whole point of this thread is that you got caught with an unexpected expense and needed to charge the refrigerator. Some other things came up and here you are carrying a balance. Now you are guaranteeing that nothing will come up next month and the cards will be paid off. It just doesn't work.

You are a new home owner. You have no way of anticipating something going wrong with the house, no one does. It's imperative that you have funds set aside for these surprises. If not, you can expect to pay interest on whatever service or appliance that needs replacing.

No one is going to care if someone has granite counter tops or a new bathroom if their hot water heater doesn't work.

[Whitey]

Haven't read the rest of the replies.. but most of the credit cards these days have interest free (or very low interest) for the first year. Its all special promotions just to suck you in. However, if you read the fine print you'll see that that if you miss a payment the interest rate will skyrocket like a *******.

After all the debt my parents got themselves in I'm just way to0 scared to even get a credit card. I trust myself somewhat but, at the same time I don't.

Smart kid.

[paddlenbike]

You are a new home owner. You have no way of anticipating something going wrong with the house, no one does. It's imperative that you have funds set aside for these surprises. If not, you can expect to pay interest on whatever service or appliance that needs replacing.

Whitey, I agree with you whole-heartedly. I am not interested in talking about my finances here in front of my friends, but I can assure you I have savings and an excellent financial planner and I am simply looking for a better vehicle for my daily expenses. My last credit card probably cost me $20 in interest for the seven years I've had it and I have net several hundred dollars each year in rewards just for using the card. It's a great way to itemize spending and I have also used past statements as proof of payment when I otherwise did not have a receipt for a warranty claim. I am not trying to sound snarky, I love the fact that you hate credit cards probably more than I do, but I have found that it works to my benefit in lieu of paying cash or using an ATM check card, which, if stolen/compromised, pulls directly from your account rather than through the buffer that is the credit card company. I think our school system should hire you to teach our children some financial planning.

[4x4mike]

All I heard was "better vehicle," "several hundred dollars" and "works to my benefit."

1992 Oldsmobile


The description says it's for sale. Use this years cash back and flyer miles to go pick it up, done.

[paddlenbike]

Better yet Mike, I'll pay double what he's asking and be sure to put it on my 25.99% interest Sears card.

[Whitey]

I am not trying to sound snarky, I love the fact that you hate credit cards probably more than I do, but I have found that it works to my benefit in lieu of paying cash or using an ATM check card, which, if stolen/compromised, pulls directly from your account rather than through the buffer that is the credit card company. I think our school system should hire you to teach our children some financial planning.

Your not coming off as snarky, and I definately don't want to sound like I'm preaching.

I've made many financial mistakes and abused the hell out of credit cards in the past. You name it, I've done it from charging college classes to getting cash advances at 30% interest. So I've definately walked the walk. Im 32 now and it's been maybe 5 years since I've used a CC.