Debit vs. Credit Cards

[KennyG]

We've been through this before. There are two kinds of low interest financing. One is fully provided by the manufacturer. It doesn't make any difference to the dealer whether you finance or pay cash. The other requires "dealer participation" and then the dealer can knock some off the price if you pay cash. Just ask the dealer and he will tell you which it is. (Auto dealers are required to disclose if there is dealer participation but for some reason, tractor dealers don't seem to be.)

 

[Torvy]

We've been through this before. There are two kinds of low interest financing. One is fully provided by the manufacturer. It doesn't make any difference to the dealer whether you finance or pay cash. The other requires "dealer participation" and then the dealer can knock some off the price if you pay cash. Just ask the dealer and he will tell you which it is. (Auto dealers are required to disclose if there is dealer participation but for some reason, tractor dealers don't seem to be.)

Dealer Participation is about the interest rate. In the 'auto' world, that means the dealer gets up to 2% of additional interest rate. The dealer would have zero interest in taking cash when he could make more participating in the loan.

There is another form of low interest that most people cannot wrap their heads around because it means looking at the portfolio beyond one deal. Banks and other financial institutions must balance their portfolio with low risk to offset high risk. High risk makes the money, low risk keeps the auditors happy. Lenders offer zero (or below market) rates to people who don't need the loan, but have excellent credit.

At the end of the day, while it is true there is no such thing as a free lunch, many of us can pay a lot less if we take those 'free' deals.

 

[tallyho8]

I have several credit cards that I use for special purposes. One card is for gas purchases and restaurants. It gives me 5% back on gas and 3% on restaurant purchases. Another one is for groceries and gives me 2% back. Another is for travel and gives me 3% back. Another is for Home Depot, Lowes and Office Depot and gives me 3% back. I have a Paypal Debit card that I use for everything else. It can be used for debit with your pin number or for credit with the money coming right out of your account either way. I only use it for credit because I get 1 1/2% back using it that way. I have never paid 1 cent of interest or fees for any of these cards as I pay everything off monthly.

I try not to be judgmental but there is no way I would hand my credit card to someone who looks like this, period.

 

[goeduck]

Okay, I will be judgmental. HOLY CARP!

 

[Jstpssng]

I understand where you guys are coming from. However, 40 years ago my parents never would have trusted a guy wearing his hair in a ponytail.

 

[jyoutz]

I understand where you guys are coming from. However, 40 years ago my parents never would have trusted a guy wearing his hair in a ponytail.

George Washington wore a ponytail.

 

[two_bit_score]

Okay, I will be judgmental. HOLY CARP!

That shade of orange really bothers me too.

 

[two_bit_score]

I understand where you guys are coming from. However, 40 years ago my parents never would have trusted a guy wearing his hair in a ponytail.

Say whatever you want but I hope we never get to the point that tats like that on someones face is a sign of trustworthiness.

 

[lman]

I guess his ears are off-limits.

 

[goeduck]

I guess his ears are off-limits.

Yes, why not more tats on his ears and while they are at it on the whites of his eyeballs. His nose has some room for more expression. Freaky, Creepy.

 

[3Ts]

I had a longtime childhood friend that went that route. I distanced myself from him many years ago. One day, about 10-15 years ago, he calls me out of the blue and starts telling me that he's on permanent disability from a large shipping company that screwed up his back(true), he was making a living as a used luxury car salesman (true), and a professional ticket scalper (also true). His wife is a Doctor (true). They live in a 3000+ sq ft house on 5 acres in a gated community, have 7 Italian racing hounds, 5 plasma TV's (those were big back then, and all true). He's driving a 2 year old beemer worth $50K. Then he springs this on me....

They're $600K in debt (15 years ago that was a lot).

They pay minimum payments on everything. They don't have children. If they don't like something or don't feel like paying for it anymore, they just return it. That includes the house.

...

I had a financial advisor one time tell me that I was in better financial shape in the low 5 figures than his clients that were in the 7 & 8 figure bracket. I was surprised and introduced me to how other people handle money.

...

At the end of the day, while it is true there is no such thing as a free lunch, many of us can pay a lot less if we take those 'free' deals.

Our credit score did drop thirty points when the retailers cancelled two of our cards for non use. But it did not bother us. We don't intend to borrow money at our age.

The credit score is used for more than a loan interest rate. It also affects the rate you pay for insurance and a few other things. We've been retired now for awhile and have no debt. House & vehicles paid off, etc. And we watched our credit rating start to fall. We needed a new car so we ended up financing it even thou we had the funds to pay for it. We got a low interest loan and paid it off early. Keeps our other fees low as well so it ends up being a wash.

 

[scootr]

Borrowing and paying back is the best way to boost your score. My wifes score is near perfect and nobody spends more money than she does

 

[RSKY]

We also finance large purchases on vehicles. It they are offering you 0% and you draw 3%... Well every penny counts.

If we don't use a card for six months I tell the wife to buy something on it. Keeps them happy.

RSKY

 

[RSKY]

To give an example. We bought close to $80 worth of New Year's Eve party stuff at Sam's Club yesterday. Paid less than $5 actual cash. The rest was paid for by cash back from the Sam's card we use for gas and meals. This doesn't happen all the time, but often enough to make using the card worthwhile. When you retire and live on a fixed income you have the time and incentive to figure things out like the proper way to use credit cards.

RSKY

 

[deserteagle71]

To give an example. We bought close to $80 worth of New Year's Eve party stuff at Sam's Club yesterday. Paid less than $5 actual cash. The rest was paid for by cash back from the Sam's card we use for gas and meals. This doesn't happen all the time, but often enough to make using the card worthwhile. When you retire and live on a fixed income you have the time and incentive to figure things out like the proper way to use credit cards.

RSKY

I think your good times regarding cash back are about to end...

Congress Is Trying To Pass a Bill That Will End Credit Card Rewards Programs

This month, congress will vote on a bill to eliminate almost all the funding for popular credit card reward programs like cash back and travel points. This Legislation would allow retailers to process...

www.yahoo.com

 

[NoTrespassing]

I think your good times regarding cash back are about to end...

Congress Is Trying To Pass a Bill That Will End Credit Card Rewards Programs

This month, congress will vote on a bill to eliminate almost all the funding for popular credit card reward programs like cash back and travel points. This Legislation would allow retailers to process...

www.yahoo.com

Leave it to my senator DICK Durbin...

 

[Torvy]

Some day they will learn (what am I saying?) that the law of unintended consequences will do more harm than any perceived good they could hope to do.

This will just further hurt the economy.

 

[lman]

History has proven that Durbin and his accomplices don't care about their constituents or the economy.

 

[Jstpssng]

I think your good times regarding cash back are about to end...

Congress Is Trying To Pass a Bill That Will End Credit Card Rewards Programs

This month, congress will vote on a bill to eliminate almost all the funding for popular credit card reward programs like cash back and travel points. This Legislation would allow retailers to process...

www.yahoo.com

From the article;

The real winners of the passing of this bill will be large retailers who do billions of transactions a year–increasing their profits at the cost of the consumer.

This doesn't even make sense.

 

[Torvy]

From the article;


This doesn't even make sense.

Let me explain it. Right now, those huge retailers spend millions, if not billions, on transaction fees. They pass those fees along to customers in the prices of their goods. The law reduces or eliminates the fees, but does nothing to change prices. Hence, the bigger your business, the more additional profit you stand to make when fees are capped or removed.

Effectively, the bill will move money from the banks and give it to the retailers. In reality, the banks will have to recoup the lost revenue and will eliminate incentive programs, increase annual fees, and tighten credit.

What lawmakers in all countries and of all political persuasions seem to forget is that businesses cannot simply eat losses. Ultimately, all business expenses are paid by customers, employees, and shareholders.