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Buying things with cash

Mr Kram said:
i doubt anyone here is saying to accumulate debt to reap the reward of cash back. you pay your balance every month and the cash back is a bonus. i guess it may seem insignificant to some, but i usually get about $1800 a year from my bank.
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I wasn't really talking about going into debt to rack up points. With the financing thing I was talking about people using the "interest free financing" or "no payments for 90 days" type stuff. But charging everything also carries risk. Say you finance a shiny new Apple laptop and you charge everything on credit cards every month. Then you suddenly lose your job. The first month, you think "Just to be safe, I'll only pay the minimum payment on the card until I get back on my feet". A couple of months later, you are still unemployed and your savings are rapidly evaporating, so you put a few things on the card. Oh yeah, and you only have a couple of months let on that "12 months interest free financing" on that shiny Apple laptop. When you do finally get back on your feet, you are staring at a nice pile of debt. You didn't plan to do it, but life happened.

My point is this: taking on debt is taking on risk. I just prefer to eliminate risk when I can. I went through all that stuff, except I didn't pay the cards off every month. I had the typical attitude that if I could make the payments, I could afford it. Yeah, a lot of it was my own stupidity, but I just don't care to ever have that feeling again.
 
I rarely use my credit card and pay most everything in cash. That's because it gives me an idea of how much I'm spending and a better feeling of if I can afford it or not. The only time I use my credit card is when I cannot purchase the item in a store and/or it is cheaper to purchase it online. And then I always make sure to pay off my credit card in full at the end of the month.
 
steve2112 said:
I wasn't really talking about going into debt to rack up points. With the financing thing I was talking about people using the "interest free financing" or "no payments for 90 days" type stuff. But charging everything also carries risk. Say you finance a shiny new Apple laptop and you charge everything on credit cards every month. Then you suddenly lose your job. The first month, you think "Just to be safe, I'll only pay the minimum payment on the card until I get back on my feet". A couple of months later, you are still unemployed and your savings are rapidly evaporating, so you put a few things on the card. Oh yeah, and you only have a couple of months let on that "12 months interest free financing" on that shiny Apple laptop. When you do finally get back on your feet, you are staring at a nice pile of debt. You didn't plan to do it, but life happened.

My point is this: taking on debt is taking on risk. I just prefer to eliminate risk when I can. I went through all that stuff, except I didn't pay the cards off every month. I had the typical attitude that if I could make the payments, I could afford it. Yeah, a lot of it was my own stupidity, but I just don't care to ever have that feeling again.
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Seems to me you are just projecting your own bad experience and problems. CC's and using credit aren't necessarily a poor risk. Done properly, it helps your credit.

For what it's worth, when I charge something, I deduct it from my cash account immediately, so I always know exactly what I can afford to spend, down to the penny. In essence, I use credit cards like a checkbook. The money is deducted as it is spent.
 
RaceTripper said:
Seems to me you are just projecting your own bad experience and problems. CC's and using credit aren't necessarily a poor risk. Done properly, it helps your credit.

For what it's worth, when I charge something, I deduct it from my cash account immediately, so I always know exactly what I can afford to spend, down to the penny. In essence, I use credit cards like a checkbook. The money is deducted as it is spent.
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Probably. But I have heard enough similar stories to know I don't want to go there again. Just listen to the Dave Ramsey show or Suze Orman show and you can hear plenty of them. Yeah, I realize the nature of their shows dictates you will get the horror stories, but still. I just know this: My car is paid off, and there is now way anybody can repo it. If my house is paid off, nobody can foreclose on it. With the way things have been the past couple of years, I think that kind of security is priceless. I can live without a few bucks cash back or some travel points.
 
I'm curious about some of these high-yield savings accounts and such. My savings account is useless as far as interest rates go...like .015% or something like that. I will make under $20 in interest this year, with mid five figures sitting in the account. That's pretty pointless. I need to find a new account.

Also curious how much someone (as noted in a previous post) has to spend to get cash back of $1800. That seems pretty crazy!

On topic anyway...I try to pay for almost everything with debit card, or cash for small purchases. My debit card has rewards points. I think I've made only like $50 in the last year. I don't think I can pay the mortgage with a debit card, and I have most of my bills pulling out of my checking account directly, rather than going through the card. I started this after I went through a phase of losing my debit card almost monthly and having to go change all those auto-pays. I use my credit card for some larger purchases, but usually pay it off within a couple of months (these are just to be safe...even if I have plenty of cash). No debt except for the mortgage.
 
samiwas said:
I'm curious about some of these high-yield savings accounts and such. My savings account is useless as far as interest rates go...like .015% or something like that. I will make under $20 in interest this year, with mid five figures sitting in the account. That's pretty pointless. I need to find a new account.

Also curious how much someone (as noted in a previous post) has to spend to get cash back of $1800. That seems pretty crazy!

On topic anyway...I try to pay for almost everything with debit card, or cash for small purchases. My debit card has rewards points. I think I've made only like $50 in the last year. I don't think I can pay the mortgage with a debit card, and I have most of my bills pulling out of my checking account directly, rather than going through the card. I started this after I went through a phase of losing my debit card almost monthly and having to go change all those auto-pays. I use my credit card for some larger purchases, but usually pay it off within a couple of months (these are just to be safe...even if I have plenty of cash). No debt except for the mortgage.
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Well, with interest rates being in the tank, you really can't find a true high yield savings account. I have watched my ING savings account slowly dive down to a bit over 1%. The key is to use the online banks like ING or Ally. Most brick and mortar banks aren't going to keep up with them. Ironically, my main checking account gives a better interest rate (3%) than any of my savings accounts.
 
I never, EVER pay with cash, and always have little cash on me. I prefer debit cards more, as they're widely accepted, you don't have to walk around with a large sum of cash in your pockets, and if you lose it, you can call and have it canceled immediately, whereas if you lose cash, it's gone and you're out money.

However, debit and cash are similar, since I never really 'owe' anyone anything - the money on my card is the money I work for, not credit.
 
samiwas said:
I'm curious about some of these high-yield savings accounts and such. My savings account is useless as far as interest rates go...like .015% or something like that. I will make under $20 in interest this year, with mid five figures sitting in the account. That's pretty pointless. I need to find a new account.

Also curious how much someone (as noted in a previous post) has to spend to get cash back of $1800. That seems pretty crazy!
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My credit union checking account pays 3.01% interest on balances up to $25K.

I put about $3K/mon on my AMEX and earn about $600/yr. cash back.
 
ideal.dreams said:
I never, EVER pay with cash, and always have little cash on me. I prefer debit cards more, as they're widely accepted, you don't have to walk around with a large sum of cash in your pockets, and if you lose it, you can call and have it canceled immediately, whereas if you lose cash, it's gone and you're out money.

However, debit and cash are similar, since I never really 'owe' anyone anything - the money on my card is the money I work for, not credit.
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I don't know about everybody else in this thread, but when I talk about paying cash for stuff, I usually mean using my debit card. I don't go pay my electric bill or internet bill with a wad of cash. I pay all my bills electronically using my bank's bill pay service. I used to use cash to pay for stuff like groceries, clothes, etc because it really helped out with the budgeting. As I got better with budgeting, I got away from that. I do almost always have cash on me, though. I've been stuck places that don't take cards or have a card system go down so I like having the backup.
 
I'm an avid user of a credit card so I can get the 1% cashback. It's not much, but it's free money. It's almost more convenient 90% of the time. I also always pay off my balance in full at the end of each month.
 
steve2112 said:
I wasn't really talking about going into debt to rack up points. With the financing thing I was talking about people using the "interest free financing" or "no payments for 90 days" type stuff. But charging everything also carries risk. Say you finance a shiny new Apple laptop and you charge everything on credit cards every month. Then you suddenly lose your job. The first month, you think "Just to be safe, I'll only pay the minimum payment on the card until I get back on my feet". A couple of months later, you are still unemployed and your savings are rapidly evaporating, so you put a few things on the card. Oh yeah, and you only have a couple of months let on that "12 months interest free financing" on that shiny Apple laptop. When you do finally get back on your feet, you are staring at a nice pile of debt. You didn't plan to do it, but life happened.

My point is this: taking on debt is taking on risk. I just prefer to eliminate risk when I can. I went through all that stuff, except I didn't pay the cards off every month. I had the typical attitude that if I could make the payments, I could afford it. Yeah, a lot of it was my own stupidity, but I just don't care to ever have that feeling again.
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Two ways to look at it. If you take that 90 days same as cash or floating the stuff with a credit card not because you don't have the money but for the interested or cash back is another story. When I charged something to my CC I think of the money is spent and therefor can not spend it any more. It is locked up and gone. The only difference is who is going to gain the interested on that money.


Now lets assume you bought that apple computer and then you lost you job. You are still out the money. So if you run out of cash the funds have to come from somewhere.

I personally like I said use my CC as more of a cash management tool. Last month I had it float $3500 and this money it is floating about $1000 in school expenses. I have the money in my savings right now to pay for it and I will be paying it. Hell on that $1000 AMEX will of been effectually floating it for 2 months. I will not pay a penny of interested on it.
 
steve2112 said:
I wasn't really talking about going into debt to rack up points. With the financing thing I was talking about people using the "interest free financing" or "no payments for 90 days" type stuff. But charging everything also carries risk. Say you finance a shiny new Apple laptop and you charge everything on credit cards every month. Then you suddenly lose your job. The first month, you think "Just to be safe, I'll only pay the minimum payment on the card until I get back on my feet". A couple of months later, you are still unemployed and your savings are rapidly evaporating, so you put a few things on the card. Oh yeah, and you only have a couple of months let on that "12 months interest free financing" on that shiny Apple laptop. When you do finally get back on your feet, you are staring at a nice pile of debt. You didn't plan to do it, but life happened.

My point is this: taking on debt is taking on risk. I just prefer to eliminate risk when I can. I went through all that stuff, except I didn't pay the cards off every month. I had the typical attitude that if I could make the payments, I could afford it. Yeah, a lot of it was my own stupidity, but I just don't care to ever have that feeling again.
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This shouldn't happen because you should have 6-12 months of expenses saved, and you should cut back immediately after losing a job to stretch it further. So you would have enough money to immediately eliminate credit card debt
 
CaoCao said:
This shouldn't happen because you should have 6-12 months of expenses saved, and you should cut back immediately after losing a job to stretch it further. So you would have enough money to immediately eliminate credit card debt
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This was a few years ago, and believe me, I learned a painful lesson. Before all that, I was a typical American. I had very little savings and was mostly concerned the monthly payment, and living paycheck to paycheck. Since then, I have paid off everything except the student loan and have about 3 months expenses in the emergency fund (and growing).
 
RawBert said:
I'm all about debit or cashola. I despise credit cards. I have one for emergencies, but never use it.

Look at the ad below. It's likely for a credit card. They're trying to hook you.
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If you are financially solvent, and have a bit of common sense, it's a perfectly fine way of paying for goods - flexible, cash back opportunities, payment protection, and the ability to save money in a high interest account longer than if it's debited immediately.

To be honest - I'm just repeating what the helpful posters above me said, but all in one sentence, lol.

Some sensible people here :) Good advice folks!
 
steve2112 said:
I've never heard any wealthy person say they made their fortune with cash back rewards. In the long run, it doesn't matter much. Plus, there are debit cards with cash back and perks.
...
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You may not make your fortune with cashback rewards, but you can bee sure that those who have earned their wealth are taking advantage of every angle to 'leverage' their money. These would include using credit cards that offer rewards, and then paying off the cards in full each month.

Several years ago (oh, who am I kidding? several decades ago ...) there was show about the Lifestyles of the Rich and Famous hosted by Robin Leach (I had to google that! Honestly!). He used an Amex card - and not the credit card, but the charge card** - to pay for the show expenses. Everything. Equipment rentals, travel, food... the whole production company was financed by that Amex card. Why? Because Amex cards offer travel rewards for plane travel, hotel stays, upgrades, theatre tickets, etc. Robin Leach used all those travel points to leverage the fabulous places that the show could cover.

[** A credit card assumes you are going to let a balance roll over month to month. The cc company makes it's money off the interest. A charge card is supposed to be paid in full each month, and the cc company makes it money off the annual fees and the merchant fees.]
 
Some people pay with cash a lot for a few reasons.
1. When you want a soda, and the machine only takes bills or coins, it really sucks to not have bills or coins.
2. Cash is hard to trace. If you buy something with a credit card, someone could find out about it by examining you statements.
3. Because retailers pay a fee to use credit services, you might can ask for a small discount (1-2%) for paying in cash.
4. Under the table sales cannot really be made with anything except cash.
 
.JahJahwarrior. said:
Some people pay with cash a lot for a few reasons.
1. When you want a soda, and the machine only takes bills or coins, it really sucks to not have bills or coins.
2. Cash is hard to trace. If you buy something with a credit card, someone could find out about it by examining you statements.
3. Because retailers pay a fee to use credit services, you might can ask for a small discount (1-2%) for paying in cash.
4. Under the table sales cannot really be made with anything except cash.
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For these reasons, I believe that within the next 50 years there will be no more "cash" -- only cash eqivalents like debit cards. The government does not like anonymity. Disposable cell phones(not associated with the identity of the owner) are already being done away with in some states.
 
barkomatic said:
For these reasons, I believe that within the next 50 years there will be no more "cash" -- only cash eqivalents like debit cards. The government does not like anonymity. Disposable cell phones(not associated with the identity of the owner) are already being done away with in some states.
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We think alike. Thanks for saving my fingers the work.

Reference the "attempt" to have companies send your entire pay cheque to the government, from whence they will issue you your net cheque, or, dare we say, a digital amount to your bank.

Link.

First they got rid of all bills over $100, in the alleged quest to better trace drug money through electronic transfer. Soon there will be no more bills, period.

Barter will come back to it's original meaning. A cow for an acre of wheat.

How will they stop that?? Stay tuned. :rolleyes:
 
I'm looking to buy a new car with cash up front. Preferably the kia optima, a honda accord or Honda civic. I want to know what's the best way to go about this ?
 
marrlinee said:
I'm looking to buy a new car with cash up front. Preferably the kia optima, a honda accord or Honda civic. I want to know what's the best way to go about this ?
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Most new cars are sold with manufacturer subsidized interest rates, but some give you a rebate if you choose to pay cash. Sometimes the dealer has more flexibility with price, if you pay cash, but it depends on the car.

It's a waste to turn down 1% for 4 years, if that's the only option. In that case, you may want to take the financing and invest your money in a safe dividend yielding utility stock.
 
Most "small" purchases like food, clothing, random knick knacks are always paid with cash. For larger purchases like electronics, anything made by Apple or the ever popular car repairs are generally paid with credit.

I generally use my card for most things as I like to build up points/rewards that way and it's almost always paid off at the end of the month. It's basically the same as paying with cash in that setup but with a little extra bonus.

But, never hurts to live within your means and pay with cash. Credit does come in handy for some people so long as they don't go crazy with it.
 
I almost always use my credit cards. I have 3 of them: Discover more, Express, and Chase slate. I use the discover for almost everything. The chase is just there for "emergencies" because of the generously high limit Chase gave me. :cool:

I love my Discover card, I just wish that the categories stayed the same 5% gas year round would be amazing. Instead they have revolving categories every few months like groceries and restaurants....basically anywhere you will most likely use the cards.

My debit card stays in my wallet almost always. I never touch it cause it gives me zero benefit to use it.

The key is to pay in full every month. Never spend what isn't in your bank account. If you live paycheck to paycheck that's when CCs are a horrible deal and that's how people get into debt.

Cash is a huge inconvenience. I hate when people go from store to store at the mall and pull out their wallets at the counter and haveto fiddle with the bills. Or when they take their time looking for "exact change" like they're going to be saving money. :rolleyes:
 
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