i suppose there is that because i'm actually pretty good at forgetting. managed to do it twice in a year and paid the ridiculous $39 late payment both times (one time if i had remembered 30 minutes earlier i would've been able to do a $12 express payment and get it in on time, but of course i didn't). it's even sadder considering i can schedule the payment online about 3 weeks ahead of time and for some reason put it off until the last minute. after the second time, though, i've started scheduling as soon as possible. however, the 1.5% back far outweighs the late payments assuming you aren't just chronically late every single month, in which case you shouldn't have a credit card. but for someone like leebigez, i don't see the point in not using a credit card. the convenience and cash back seem too much to ignore to me.
I've heard the argument about "no good debt" before, but I don't think it necessarily wise. In theory, money you invest (especially at a young age) will make you way more money in the long run then you would save from paying off a house quicker.
Most of his idea's are based on a risk assesment. If you have no debt, no mortgage, etc...then if you lose your job, you can survive a much longer time. or If you have a huge medical problem, it doesn't bankrupt you as easy. You have less of a chance to lose your home, etc.. He's all about monetary stability. Also, if you use your debit card AS a credit card, you still get all the insurance of a credit card. The idea is that even if you ARE a responsible credit card user, sometimes things come up (emergencies, job loss, etc) that can cause you to NOT be able to pay on time & cause you to get in debt. Also, studies show that people spend 15-18% more when the use a credit card than they do when they spend cash. So, using cash essentially gives you a 15-18% payraise.
Actually, Ramsey advocates that you begin investing 15% in retirement, kids college funds, etc..before you start paying extra on the house.
Probably true, but like DFWRocket says, it's all about risk. Ramsey likes to say that his research has shown that 100% of all foreclosures happen on homes with a mortgage. His whole reasoning is that you will be much more prepared for life’s speed bumps if you have an emergency fund and no monthly payments of any kind. And to tell you the truth, I can’t remember if he recommends paying off the mortgage before investing or after. He believes you can be “debt free” and still have a mortgage – but if you can pay it off, even better. EDIT: Yeah, I was wrong about the order of the steps. Investing goes before paying off the house. Rightly so, IMO.
Ah. Thanks. I like the convenience and protection of a credit card (a debit card does not offer the same protection necessarily) - the trick is to set your limit and that's all you spend. It can be hard, but it's workable.
My bad, i meant lifetime. How is that possible in a lifetime though. The average house won't earn that much.
According to the article Deuce McAllister is filing for bankruptcy. Damn!! Oh wait.... Isn't he opening a restaurant with Tmac?
Yeah, I don't agree with using a debit card over a credit card. However, his advice is for a very specific group of people who are more in danger of credit card debt than ID theft. Their credit is bad and credit cards are maxed. It's also very difficult to purchase a vehicle with cash, especially if you are payinb down CC debt. In Houston, it's just impractical to go without car and have a professional job(e.g., walking to the bus stop in a suit and waiting for a transfer in 70% humidity and 80-85 degree heat). It would be impossible to start a business or pick up investment properties with all cash for the average worker. My father used debt to start his own small business and buy strip malls. It would have never been possible without leverage.