chapter 13 bankruptcy

[nathanm]

FYI guys even if you pay the balance off every month you still pay interest on 30 days worth of debt which is compounding interest.  Calculate the dollars it took for your boss to get 375,000 miles.  Chances are he's paid more than those flights are worth in interest on the card over the 12 months.  

No you don't. Credit cards have a grace period. If you pay them off every month by the due date, you pay no interest. If you learned that from Ramsey, he's a bigger idiot than I thought.

Edited to add: There may exist cards that don't have a grace period on purchases. I haven't ever seen one. If you take a cash advance, you do pay interest from day one.

[izmophonik]

I hate to break it to you but you're not making any money off of Discover.  You do get 5% cashback on SOME purchases..not all.  On top of that you aren't getting 5% compounded.  You're getting 5% simple interest...big difference.  Lastly, Discover is getting your money at 1% - 29% compounded every day.  The credit card companies will not lose money on you.  The only thing you're making is somebody else rich.

[Cats Cats Cats]

No you don't. Credit cards have a grace period. If you pay them off every month by the due date, you pay no interest. If you learned that from Ramsey, he's a bigger idiot than I thought.

Edited to add: There may exist cards that don't have a grace period on purchases. I haven't ever seen one. If you take a cash advance, you do pay interest from day one.

People get "charge" cards and credit cars mixed up.  They also don't know what a "charge" card really is.  Most think American express  charge cards start charging interest immediately, etc.  You do have to pay them off every month (although they have introduced the option to finance purchases over $250).  I do pay some fees for certain cards for the "rewards".  I only do so if it is in my benefit.  Anyway, debt is a tool.  You can either gain from it or you can lose from it.  No, it isn't like gambling the house doesn't always win (you go bankrupt).  Although, I guess they do always win because they always make money.  You can "make" money as well, its the people with debit cards and pay cash that pay the higher prices due to transaction fees that lose.

[Cats Cats Cats]

izmophonik you have no clue what you are talking about.  You only pay interest if you don't pay 100% within the grace period.  You will then accrue interest on any new purchases the next month.  If you have a bill of $100 and you pay $99.99.  (after the grace period) any new charges that month you will pay your interest rates on those charges immediately.  They used to charge you interest on up to 2 months of new charges but I believe they stopped this with the credit card reform.  As long as you pay it off you don't pay any interest.

[Gaspar]

It's not really rigged against you in a way that matters if you pay off your balance each month. All of the banks I deal with automatically draft the money out of my bank account on the due date. (I have them set to take the minimum and I manually pay the rest, just in case of a dispute or fraud I hadn't caught yet)

Since I only use one or two cards a month for expenses (one for personal stuff, the other for work-related stuff), the time aspect is minimal, and as I mentioned previously, it makes me money.

My boss is one of the most pro-cash people ever, but he still uses credit cards simply because he can run a few hundred thousand bucks a year through them buying things he's going to immediately turn around and resell and get rewards out the wazoo. 375,000 frequent flier miles a year will save you a lot of money on airplane tickets. $3,000-$10,000 (depending on what promos run in any given year) in cash is also pretty nice.

Edited to add: He also tells you to do silly things like closing old cards. That's not a good idea unless you're paying an annual fee. Age is one of the big contributors to your score, and whether he likes it or not, your good score gets you cheaper auto insurance, a lower interest rate on your mortgage, and saves you from having to pay deposits on utilities, among other things.

We have caught Chase, Capital One, and Barclay(Apple Credit) in mistakes and double charges on our cards several times.  Especially Barclay!

Changes in rules and rates on cards that you no longer use can negatively affect your credit.  Reducing the amount of revolving debt and closing higher interest cards that you no longer use will positively affect your score.  "Activity" on a card is viewed healthy and responsible.  "Inactivity" or idle cards score negatively.

Keep your oldest accounts open, but only if they offer a reasonable rate.  If you are offered a better rate, contact your existing credit card and attempt to bargan with them.  Threaten to close the account if they do not lower your rate.  This works about 110% of the time.  If you are like me pay off your balance each month, mention that you are considering making a big purchase and want to do it on the card that gives you the best interest rate.  This make them super horny.

The less you use a card the more that card company will market to you in attempts to get you to use their service.  Each time they increase the amount of materials sent your way for marketing purposes, they increase the opportunity for fraud and identity theft.

[izmophonik]

Two words:

Pay Cash.

Mutual funds are paying me more money than any of you fools think you make by using plastic.

Enjoy.

[nathanm]

Two words:

Pay Cash.

Mutual funds are paying me more money than any of you fools think you make by using plastic.

Enjoy.

I fail to see what your mutual fund has to do with anything. The same amount of money goes out the door whether I pay cash or use a credit card, so long as the card(s) is/are paid in full each month. I just get some extra back for using the card.

[izmophonik]

We're not translating Mayan script here.  You pay cash, save/invest and don't use credit cards.  The results are obviously on the up side.  If you use credit cards, you're obviously not making the most out of your money.

[nathanm]

I hate to break it to you but you're not making any money off of Discover.  You do get 5% cashback on SOME purchases..not all.  On top of that you aren't getting 5% compounded.  You're getting 5% simple interest...big difference.  Lastly, Discover is getting your money at 1% - 29% compounded every day.  The credit card companies will not lose money on you.  The only thing you're making is somebody else rich.

If you have a credit card, I strongly suggest you read your agreement. Everything you stated is incorrect. The interest compunds monthly if you don't pay it off each month. You pay zero interest if you pay in full each month.

Do I really need to provide my statement to prove this to you?

To take my boss as an example, he pays a $35 annual fee on his starwood amex credit card (it's worth it for the extra .25 miles a dollar) and gets north of 300,000 miles a year while paying zero interest because he pays in full each month.

Google 'credit card grace period'.

[Cats Cats Cats]

If you use credit cards, you're obviously not making the most out of your money.

This is why I laugh at Dave Ramsey.  The goal isn't to make you have money.  The goal is to keep you afloat so you can keep tithing.  If I had "waited" until I had the cash to buy a house, buy inventory for my business, etc.  I would still be doing nothing but making 2% (if I got lucky) on a CD.  It would probably be another 10 years before I would be able to start building a business.  Then I couldn't expand using credit so I would have to rely solely on income to operate.  If I ran low on cash one month?  Lets just shut down the business, its over. 

[nathanm]

This is why I laugh at Dave Ramsey.  The goal isn't to make you have money.  The goal is to keep you afloat so you can keep tithing.  If I had "waited" until I had the cash to buy a house, buy inventory for my business, etc.  I would still be doing nothing but making 2% (if I got lucky) on a CD.  It would probably be another 10 years before I would be able to start building a business.  Then I couldn't expand using credit so I would have to rely solely on income to operate.  If I ran low on cash one month?  Lets just shut down the business, its over. 

Yes, when used responsibly debt can make you a lot of money. One of my clients has borrowed over a billion dollars over the years to buy, start, and expand businesses. I strongly doubt there is anyone on this forum with even a quarter of his net worth.

That doesn't mean that the use of debt to finance consumption is in any way a good idea. No matter how much you borrow, you still only have whatever you've got coming in every month to spend, since you gotta pay the money back at some point. Obviously it doesn't help your cash flow any if you're spending part of that income on debt service and that outstanding balance isn't bringing in more than you're paying in interest.

[GG]

Check these folks out, they are the real deal.  BBB Accredited

http://www.debtreductionservices.org/location-tulsa

They will get your interest rates reduced and you make one monthly payment.   

I know some people who have had great success with them.   

They are a non-profit.   

[TUalum0982]

thanks for the info everyone.  Greatly appreciated. This time last night, my only thought was bankruptcy after researching online.  Today is a different story.  Reading on the forums mentioned above and making a few phone calls made quite a bit of difference.  I called Chase and though they closed the account, they lowered my payments to 165 month with 2% interest for 5yrs instead of 13.49% and a minimum payment of 189.  No prepayment penalty and shouldnt affect my credit too negatively.  Time will tell I guess.  Now if the other lending institutions will be as helpful as chase was!

[Conan71]

Yes, when used responsibly debt can make you a lot of money. One of my clients has borrowed over a billion dollars over the years to buy, start, and expand businesses. I strongly doubt there is anyone on this forum with even a quarter of his net worth.

It's kind of gauche to make comments like that. But the last member who is likely wealthier was banned   See what it got him/her?

[Cats Cats Cats]

It's kind of gauche to make comments like that. But the last member who is likely wealthier was banned   See what it got him/her?

A lot more free time.