Buying Advice Purchasing a tractor on a credit card?

[Trillium Farm]

So, this isn't as financially irresponsible as the title may indicate.

I'm wondering if anyone has purchased a tractor using a credit card to reap the rewards points, and then immediately paid it off, as opposed to just walking in with a check?

It seems like a reasonable way to save a couple % more on a large tractor purchase. For example, the Chase Freedom Unlimited card offers 3% cash back on all purchases in the first year, up to $20,000. That's a $600 savings on a tractor. On a $30,000 tractor, split between two cards belonging to the wife and I, it's $900. That's a non-negligible amount.

Am I missing anything on this line of thinking?

As someone else said, they will not because of the fees! They'd lose at least 2% and could be as high as 5%

 

[BrokenTrack]

I do agree with your concepts ....but....
For me:

I have two cards.
One is no fee (5% Gas/groceries/drugs)
One is $65 per year (2% everything).

I put absolutely EVERYTHING I can on my credit cards!
I have been doing so for years.

Each year I get between $1000 and $1200 in cash rewards (my cost $65).
I have never paid even $.01 in interest.

Then why bother?

I am not trying to be snide at all here, I am trying to show that this is the fallacy that many people fall into.

You speak of making $1135 a year from using credit cards, but because I use cash, I get reduced rates on many, many purchases; fuel, logging supplies, building materials, chainsaws, etc.

One day I was with my wife looking at an old antique stove to go in our home that has a 1930 d馗or. The saleswoman was telling me she was having a hard time selling antique gas appliances, and thus told me, "I would sell everyone of these gas stoves for half off if I could." I happened to have $4500 in my pocket, so I pulled out the wad of cash and said, "I'll give you $700 for that stove right now."

She went for it because she had just had two stoves come back because the buyers homeowner's insurance would not cover an antique gas stove. I do not have the problem, and by paying cash, it was a "as is" sale.

That was just one purchase granted, but it happens a lot.

In another case I did not spring for the new $7000 boiler for my house, but instead bought a used one for $700; 90% savings, and they both make a house warm. The used purchase was a private person and so a credit card could not have been used.

With credit cards, the credit card company dictates to you what the deal is going to be, and on what types of purchases as well. With cash, I can ask what the deal will be. If I like it, I can then agree to it, or not. In the case of the stove it was 50% and not 3%, but on most purchases, the vendor will knock the price back because most people pay with credit cards, so they inflate the prices by 3% anyway. But lets say the stove dealer did not go for a 50% sale, I could have asked for a 35% sale, or 25% sale...the point is, I can negotiate the savings.

I have only listed (2) cash purchases totaling savings of $7000. That is (2) purchases, yet it would take 6 years of cash back rewards to equate to just those (2) purchases. This is why credit cards in every way are a bad deal.

I want you to get angry, but not at me. Get mad at the credit card companies that hoodwink us, our kids, and our country. It is NOT a conspiracy, it is just the way the crazy system works, but it need not be so. Then realize I am not doing anything special. EVERYONE can use cash and beat the crazy system that is designed to make you think you are getting a lot of money back. You are getting some I admit, but you can get a lot more by never handing it out!

This is the stove we bought saving $700 just by paying cash.

 

[the old grind]

The stove is beautiful too.

 

[RSR]

Then why bother?

I am not trying to be snide at all here, I am trying to show that this is the fallacy that many people fall into.

You speak of making $1135 a year from using credit cards, but because I use cash, I get reduced rates on many, many purchases; fuel, logging supplies, building materials, chainsaws, etc.

One day I was with my wife looking at an old antique stove to go in our home that has a 1930 d馗or. The saleswoman was telling me she was having a hard time selling antique gas appliances, and thus told me, "I would sell everyone of these gas stoves for half off if I could." I happened to have $4500 in my pocket, so I pulled out the wad of cash and said, "I'll give you $700 for that stove right now."

She went for it because she had just had two stoves come back because the buyers homeowner's insurance would not cover an antique gas stove. I do not have the problem, and by paying cash, it was a "as is" sale.

That was just one purchase granted, but it happens a lot.

In another case I did not spring for the new $7000 boiler for my house, but instead bought a used one for $700; 90% savings, and they both make a house warm. The used purchase was a private person and so a credit card could not have been used.

With credit cards, the credit card company dictates to you what the deal is going to be, and on what types of purchases as well. With cash, I can ask what the deal will be. If I like it, I can then agree to it, or not. In the case of the stove it was 50% and not 3%, but on most purchases, the vendor will knock the price back because most people pay with credit cards, so they inflate the prices by 3% anyway. But lets say the stove dealer did not go for a 50% sale, I could have asked for a 35% sale, or 25% sale...the point is, I can negotiate the savings.

I have only listed (2) cash purchases totaling savings of $7000. That is (2) purchases, yet it would take 6 years of cash back rewards to equate to just those (2) purchases. This is why credit cards in every way are a bad deal.

I want you to get angry, but not at me. Get mad at the credit card companies that hoodwink us, our kids, and our country. It is NOT a conspiracy, it is just the way the crazy system works, but it need not be so. Then realize I am not doing anything special. EVERYONE can use cash and beat the crazy system that is designed to make you think you are getting a lot of money back. You are getting some I admit, but you can get a lot more by never handing it out!

This is the stove we bought saving $700 just by paying cash.

View attachment 615854

Yeah, but if you whipped out your credit card, instead of cash, you could have saved 51.5%, instead of just 50% on the stove!!

Your examples deal with negotiating price, as opposed to the benefits of using credit. Yes, sometimes you can negotiate better with cash. In particular, when buying used, where must people can't even come up with the money for bigger ticket items without financing.

But, for most fixed price items from retailers, there is rarely if ever a discount for paying cash, which are the items I think most are referring to here. In those instances, you might as well take the 1-3% cash back you can get, and then pay off the card in full each month. That has always been my strategy, hence the question to begin with.

 

[Diggin It]

One day I was with my wife looking at an old antique stove to go in our home that has a 1930 d馗or. The saleswoman was telling me she was having a hard time selling antique gas appliances, and thus told me, "I would sell everyone of these gas stoves for half off if I could." I happened to have $4500 in my pocket, so I pulled out the wad of cash and said, "I'll give you $700 for that stove right now."

She went for it because she had just had two stoves come back because the buyers homeowner's insurance would not cover an antique gas stove. I do not have the problem, and by paying cash, it was a "as is" sale.

With credit cards, the credit card company dictates to you what the deal is going to be, and on what types of purchases as well. With cash, I can ask what the deal will be. If I like it, I can then agree to it, or not. In the case of the stove it was 50% and not 3%,

This is the stove we bought saving $700 just by paying cash.

That's a load of hooey.

The CC companies have contract terms, but they don't care about the price. Shopkeeper could have sold the stove to you for the same $700 and only paid fees on that amount. You got it for that price because the shopkeeper wanted to get rid of it, not because you offered cash.

 

[grsthegreat]

The items I use cc for will NOT offer cash discounts. In my own company I do not offer cash discounts. I offer veteran and senior discounts only. Cash is a pain in the butt. My bank charges for large cash deposits...not to mention the government paperwork needed for large cash deposits. I still remember the time Sears refused to accept a $100 bill from me due to the large supply of fake bills out there. I like my 2% refunds from materials I get. Don’t care whet anyone says. I carry no balance and I pay no yearly fees on my cards. Good luck buying from amazon or eBay with cash.

 

[mred2]

I thought the comment about the home insurance was interesting. So I have a $300,000 house, with insurance. If my house gets blown away, I get a new house. If no insurance, no house. I know of few houses today that are less then $150,000.

 

[grsthegreat]

I thought the comment about the home insurance was interesting. So I have a $300,000 house, with insurance. If my house gets blown away, I get a new house. If no insurance, no house. I know of few houses today that are less then $150,000.

tell me about it. My place is valued at around $800,000. There’s no way I wouldn’t have home insurance, and my place is fully paid off. Home insurance is a cheap cost as far as I’m concerned.

 

[atsah]

I find credit cards to be useful, I use one for just about all my monthly expenses and online purchases and get money back, always paid off each billing cycle. I like using cash to pay for large items and to people that have worked for me on my property and purchasing used items. I always get a deal if I have a roof installed, windows etc paying cash..

I like the convenience and security, putting my debit card or routing/account numbers out for all to see and track isn't something I do..

 

[sodamo]

I agree, the right combination of cash and credit. Recently took kids on vacation, cruise etc on credit cards and pain off no interest. Didn’t get offer to pay cash with a discount. Airline was all points and the required $$ for taxes etc. 2 1st class tickets to mainland, 2 more to return. 3 economy seats for family from DC to Anchorage, 3 more return from Vancouver. Almost painless and no way to buy via cash and get a discount. I keep enough cash on hand to bargain locally, but about 99% of our stuff is on a card and paid off same billing period.
I sincerely doubt that one can totally, 100% live a full cash only life anymore, someone has a CC in the household. There is a cost for money almost regardless of its form, mailing checks, making cash payments in person, CC. Just going to the bank to get cash has a cost. Of course we tend to minimize stuff like that. Most people (not all) that focus on cash have challenges accounting for how/where their money was spent, my CC statement gives me very good tracking for budget.