Not really. In this day and age, you need credit. The best advice is get a credit card and don't spend more than what you have in your bank account.
Your best advice assumes most people that get a credit card will not spend money they don't have in a bank account. If they had the willpower to do this, they can meet my conditions for getting a credit card in a couple of years or less. Had a friend just buy a house a couple of years ago with no credit. It was a pain for him working with the bank, but it happened. For other things, credit is only "needed" for those that should be able to meet my conditions easily with willpower.
But it is the best advice. Use a credit card as if it's cash. You'll have many more advantages with a credit card than someone who doesn't use one.
Thanks for this, super helpful. Just so we're clear, if I use my chase sapphire reserve card exclusively on travel and dining, then im getting 3 points back per dollar, and even applying the "non-luxury" conversion rate of 1.4c per point, that's 4.2% cashback vs a 2% cashback for the doublecash card, correct?
Your advice is only the best for people that spend less than they make. From a quick search, that is about 40% of Americans.
Giving good advice is about understanding who you're talking to and what is realistic and meeting people where they are rather than where you think they should be. There is no single "best advice" for most topics.
Amex Platinum business card. 100k sign up bonus. Sure it costs $450 $200 airline credit a year Global Entry/TSA precheck Plus you get 50% back on your point usage at the moment, great deal. 5x points on flights
If you cannot control yourself to spend less than you have, you have bigger trouble than credit cards. I have several credit cards and never carry a balance, I get a little reward for using the cards, seems perfectly good to me.
Just to add to this, CSR is a little different in terms of point usage. You are correct in the 3 points per dollar on travel and dining but for point redemption, if you use it on flights, it's a flat 1.5 cent redemption. CSR points are actually converted into dollars when used for flights so it doesn't matter what airline you're choosing. Chase is effectively converting your points back into dollars for your use. This has the side benefit of ensuring that your booking is a proper paid booking instead of an award booking which means you earn frequent flyer points and loyalty status. For someone like me who has pretty good medallion status with Delta, I get a nice multiplier effect on paid bookings (both in terms of FF points and status). Other credit cards that require you to transfer points means that you end up just making award bookings so frequent flyer points or loyalty status improvements. Also all things being equal, a paid traveler is treated better than an award traveler so you're less likely to get bumped (and possibly beaten up) like the guy on the United flight.
True, but I've never heard of any situation where spending more than what you have in your bank account as good advice. Obviously investment or education opportunities don't apply to that.
Do people actually buy crap on credit cards they can't pay for? Serious question. I have no running balance each month and use it as a form of reward for points.
Everyone I know does this as well, I have no idea why people would buy crap they cannot afford on credit or not. Credit balance is the worst form of financial self punishment.
Of course not - but lots of people have trouble managing money. For them, having a credit card is a danger because it can send them down a bad path. Of course they do - how exactly do you think credit cards make money? http://www.cnbc.com/2016/12/13/us-households-now-have-over-16k-in-credit-card-debt.html The average family that holds a credit card balance has one of $16,000.
Chase Ultimate Rewards portal allows you to earn multiplier points for shopping. Upwards of 30x points (flowers or chocolate covered strawberries). But some solid ones like 4x for nike or kohls, 10x for sephora, etc. Bout to get mothers day points and get some stuff for wifey and I.
