What happens if you don't have enough credit to buy the watch?

[nrubenstein]

Dumbest thing I have ever head. Grow up before commenting.

He's being a bit of a jerk, but he's right.

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No, not a dumb comment. It's smarter to be able to purchase something outright than pay interest monthly. Being able to afford the monthly payments on a CC debt still means you're living beyond your means.

This is not exactly correct.

People who are smart with money will rationally evaluate the costs and benefits of carrying the debt. People who worry about the monthly payment get screwed because they don't understand the underlying basis of that payment. What's the interest rate? What is the cost of the item? What other conditions are there? You can have a "low" payment and still be paying 20% interest. Or more.

Obviously carrying credit card debt is, as a rule, not going to be a good thing if there is a choice. The rate is just too high.

 

[JayLenochiniMac]

Ever bought an expensive price of furniture, like a leather sofa?

Sure and I've paid it off when the CC statement comes (and reap the cash back). I don't carry a balance.

 

[kilcher]

Dumbest thing I have ever head. Grow up before commenting.

You're telling me to grow up because I don't believe in credit card debt?

I'm 41 years old, I have no debt, my cars are paid off, my house is paid off, and I have considerable amounts of money in college funds and retirement. All because I don't make monthly payments on things I bought but couldn't really afford. Not only are you paying interest but you're also missing out on all of the money you could have over time if it were invested. That's something most people don't take into account.

If you think it's better to buy something on credit and make monthly payments vs. paying cash (or saving until you can pay cash) then I guess we'll just have to agree to disagree.

 

[shenfrey]

What happens if you don't have enough credit to buy the watch?

You're telling me to grow up because I don't believe in credit card debt?

I'm 41 years old, I have no debt, my cars are paid off, my house is paid off, and I have considerable amounts of money in college funds and retirement. All because I don't make monthly payments on things I bought but couldn't really afford.

If you think it's better to buy something on credit and make monthly payments vs. paying cash (or saving until you can pay cash) then I guess we'll just have to agree to disagree.

No I a telling you to grow up and stop laughing at people who prefer to make monthly payments. There is no right or wrong way to pay for things. At your age id expect you to know that and to be more respectful.

 

[nrubenstein]

You're telling me to grow up because I don't believe in credit card debt?

I'm 41 years old, I have no debt, my cars are paid off, my house is paid off, and I have considerable amounts of money in college funds and retirement. All because I don't make monthly payments on things I bought but couldn't really afford. Not only are you paying interest but you're also missing out on all of the money you could have over time if it were invested. That's something most people don't take into account.

If you think it's better to buy something on credit and make monthly payments vs. paying cash (or saving until you can pay cash) then I guess we'll just have to agree to disagree.

With a paid off house, you have a lot of money sunk into something that could be invested in your retirement.

To be clear, I completely agree that toys should be bought with cash.

However, zero debt isn't necessarily the best choice, either. The cost of not carrying a mortgage is the net return that you could earn by having that money in the stock market.

Likewise, paying cash for cars can be especially expensive, what with the *heavily* subsidized lease/purchase options, and very cheap unsubsidized loans. You could invest that money instead of locking it in a depreciating asset.