Cashback cards are the best. Biggest bang for your buck! The BMO Harris Bank cash back is not too bad either, 5% with a quarterly limit of $2500 and no annual fee. Annual fee is a ripoff.
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- Thread starter VicBee
- Start date
Cashback cards are the best. Biggest bang for your buck! The BMO Harris Bank cash back is not too bad either, 5% with a quarterly limit of $2500 and no annual fee. Annual fee is a ripoff.
Why need cash? I have no cash and can pay everywhere with my bank card. Contactless or with a code. No cost.
In Europe in several countries all shops, or businesses are by law obliged to accept payment by bank card at no cost. We use bank cards instead of credit cards, except for a few specific payments or garantees like renting a car, plane tickets and webshops. I never have even 100 EUR cash with me. So no risk of losing a lot of cash.
Bank cards can only be used if you have money in the bank,or if you have received a creditline from your bank.
I wonder if they give a special APR for AMP customers.
I use the credit card for the insurance, extra warrantee, cash back and keeping track of expences. I suppose I could use my debit card as there is no fee with my banking package but I would give up the other perks.
You pay off the entire balance 1 month later by the due date but if you REALLY can't, you try to consolidate it and refinance it with consumer loans at much much cheaper interest rate. You can sometimes do a balance transfer to another credit card that's having a promotion for 0% interest on balance transfers (MBNA has this ALL the time. They basically earn a balance transfer fee) or another payment arrangement offered by the card issuer. The bottom line is you do NOT pay the huge 19%, 20% interest rate that's on the card itself. This is what cripples your finance and you hear those stories of people who have to take longer time to pay off their credit card debt than paying off their mortgage. It's because they didn't manage their finances properly. Those double-digit interest rates is ok if your balance is small and you forgot to pay for just 1 month then it's no problem, you pay it off right away the next month. With the interest at 20%, on a balance of $3.5K for 1 month, the interest is just $0.2 X 3500 X 1/12 is about $58.33. It's very manageable. But if you have accumulated a huge balance of let's say $35K let's say, even for 1 month, 20% interest rate will incur you an interest amount of $583, and that's just 1 month. Imagine if you have been in arrears of 2, 3 months then that interest amount quickly becomes almost $2K and that's when the credit card debt starts to get out of control. You cannot let things get out of control. Just like when you incur losses in your trading, you need to do a stop-loss. It's the same thing here. You need to stop-loss this credit card debt that's growing at 20% interest daily. How do you stop-loss a credit card debt? You either pay the entire balance off as quickly as you can, do NOT pay just the minimum amount and (not or) you refinance it with loans with cheaper interest rates just like how you refinance your mortgage. People all know how to refinance their mortgage by shopping for a cheaper mortgage rate but they do not know how to refinance their credit card debt. They think the amount is small so they can just pay it off slowly. No a credit card debt might be a small amount but it's at 10 times the interest rate so it's growing 10 times faster than the mortgage. The mortgage might be in a much larger amount but the interest rate is much much lower so at the end it amounts to the same thing. When your credit card amount outstanding is 5 digit for several months, at 20% interest, it's really become a second mortgage if you just pay the minimum amount required. The good thing is it's an open mortgage that you can refinance at any time. Just like for a mortgage, you shop around for cheaper consumer loans with lower interest rate and you use it pay off the ENTIRE balance of the credit card debt that's incurring the 20% interest rate and then you pay off the consumer loan that's at a cheaper hopefully much cheaper interest rate that should be much more manageable until it's paid off and then you can splurge again on credit card by replacing another 4 discs of your Mercedes or better buy another Mercedes on your credit card.
There is no caveat. You just manage it. Credit card is absolutely FANTASTIC! But just like anything that's fantastic, you have to manage it.
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You pay off the entire balance 1 month later by the due date but if you REALLY can't, you try to consolidate it and refinance it with consumer loans at much much cheaper interest rate. You can sometimes do a balance transfer to another credit card that's having a promotion for 0% interest on balance transfers (MBNA has this ALL the time. They basically earn a balance transfer fee) or another payment arrangement offered by the card issuer. The bottom line is you do NOT pay the huge 19%, 20% interest rate that's on the card itself. This is what cripples your finance and you hear those stories of people who have to take longer time to pay off their credit card debt than paying off their mortgage. It's because they didn't manage their finances properly. Those double-digit interest rates is ok if your balance is small and you forgot to pay for just 1 month then it's no problem, you pay it off right away the next month. With the interest at 20%, on a balance of $3.5K for 1 month, the interest is just $0.2 X 3500 X 1/12 is about $58.33. It's very manageable. But if you have accumulated a huge balance of let's say $35K let's say, even for 1 month, 20% interest rate will incur you an interest amount of $583, and that's just 1 month. Imagine if you have been in arrears of 2, 3 months then that interest amount quickly becomes almost $2K and that's when the credit card debt starts to get out of control. You cannot let things get out of control. Just like when you incur losses in your trading, you need to do a stop-loss. It's the same thing here. You need to stop-loss this credit card debt that's growing at 20% interest daily. How do you stop-loss a credit card debt? You either pay the entire balance off as quickly as you can, do NOT pay just the minimum amount and (not or) you refinance it with loans with cheaper interest rates just like how you refinance your mortgage. People all know how to refinance their mortgage by shopping for a cheaper mortgage rate but they do not know how to refinance their credit card debt. They think the amount is small so they can just pay it off slowly. No a credit card debt might be a small amount but it's at 10 times the interest rate so it's growing 10 times faster than the mortgage. The mortgage might be in a much larger amount but the interest rate is much much lower so at the end it amounts to the same thing. When your credit card amount outstanding is 5 digit for several months, at 20% interest, it's really become a second mortgage if you just pay the minimum amount required. The good thing is it's an open mortgage that you can refinance at any time. Just like for a mortgage, you shop around for cheaper consumer loans with lower interest rate and you use it pay off the ENTIRE balance of the credit card debt that's incurring the 20% interest rate and then you pay off the consumer loan that's at a cheaper hopefully much cheaper interest rate that should be much more manageable until it's paid off and then you can splurge again on credit card by replacing another 4 discs of your Mercedes or better buy another Mercedes on your credit card.
There is no caveat. You just manage it. Credit card is absolutely FANTASTIC! But just like anything that's fantastic, you have to manage it.
What happened I have more than one Mercedes?
I doubt it. AMP is not into consumer loan segments. They are more of a discount brokerage. I think of them as the IB for just futures.
Same process. Rinse and repeat, up to your ability to pay over time. If you can't afford to pay it even over time, don't buy it. There you go.
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what happened if I like to buy stuff?
Virtu, credit card is really cash except you don't have to give it right away when you buy stuff. It's no different from a debit card in terms of payment. We are NOT paying more or spending more, beyond our financial standard as you say just because all of sudden we are using a credit card. Some people do but that's because they don't understand the concept of credit cards properly and they are not using it correctly. If you pay off the entire balance on the credit card by the due date just like how you paid with your debit card right away, there is NO interest rate; that 20% interest rate that you see on the credit card does NOT apply. It's as if it's not there. The 20% interest rate only kicks in if you did NOT pay off the full balance by the due date then whatever portion that you didn't pay off gets charged 20% interest.
It CAN cost you 20% interest but it doesn't mean it will for sure in reality. I can count on one hand the number of times that I have paid that 20% interest and I have used credit cards for 20+ years on everything. In North America, you can pay with a credit card everywhere even in little corner stores if they accept it. It's like a debit card but you just don't pay right away. And I get to earn interest on the cash that I keep in the account for this one month that I don't pay plus I get the added protection of not needing to pay if the purchase was made out of fraud or the purchased product was bad which I wouldn't have if I had paid with a debit card because that purchase amount is taken from my account right away.
But if it's for controlling impulsive buying, you can still control it even if you use a credit card. Debit and credit cards are just methods of payment; it's what you use to pay for something that you have already decided to buy. It's NOT a method of determination to determine whether you should buy something or not in the first place. Not using a credit card just because it will tempt you to impulse buying is like saying I shouldn't have sex because it will get me to be obsessed with sex.
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