Someone told me that nothing is free in this world. For most things I would agree. Anything that is usually free comes with a cost. It might be a hidden cost, but usually if you dig down deep enough you can find one. So are credit cards used smartly the last free lunch. Say you buy only the stuff you would normally and instead of cash you use plastic. Let’s examine all the freebies you get with plastic. This all assumes that you will payoff your balance in full at the end of each month. You get an interest free loan. You get a host of consumer protection. The best thing you get is valuable rewards. Just a brief side note today I received my double cash card. I just could not leave that .5% on the table. ( I was using a quicksilver card). I know all the Dave Ramsey disciples will coil in hatred of plastic but it is just dumb not to use plastic. Back to the main point so what is the cost of using plastic. There is none I can see…let me know if you disagree
I have a couple of problems with Dave Ramsey. I will say he is good for people that have no control of their money and are just always in crisis mode. But for the person that does control their money his advice is just bad or really almost dangerous. If a person does not have a credit score, they will pay higher insurance premiums. If a person has no credit score, they will not be able to borrow money for a home mortgage at the best rates. I just think the responsible use of credit is a good thing and it only benefits the user. We can argue that our Fico should not determine what we pay for insurance but right now it does and I like to save money.
I just thought of some keys for wealth building. Don’t borrow money to buy depreciating assets. Pay yourself first. When I say pay yourself I mean to please save some money. I would prefer it in a tax advantaged account like a 401k, Ira or Roth IRA. Also please contribute at least the minimum to get the employer match. Start early and don’t waste any time. If you change jobs or start a job and don’t have access to a 401k for a year please go ahead and open or contribute to an existing Ira. They are so easy to open.
Do you ever wonder if what you wonder about is normal? Is it even possible to have a completely honest conversation with anyone?
Have a goodnight