Looking for Financial Advice - Page 4 - Lateral-g Forums

**GregWeld** · #31 01-01-2010, 11:11 AM

Just "because".... I searched the net for a Credit Card Interest Rate calculator... and plugged in some numbers. I used a 1000.00 balance - an interest rate of 24.99% - with 2% per month payback - Monthly payment of $50... This would take you 27 payments (2.25 years) and you'd pay $306 of interest.

So if you just made a $75 a month payment instead. You'd cut your time down to 1.33 years and the interest to $184 (16 payments instead of 27)

For comparison - I'll use 1000 owed and 12% interest - same $50 payment vs $75

$1000 owed at 12% paying $50 a month takes 1.9 years (23 payments) and costs $121 in interest

$1000 owed at 12% paying $75 a months takes 1.25 years (15 payments) and costs $79 in interest

**tones2SS** · #32 01-01-2010, 01:13 PM

Quote:

Originally Posted by GregWeld

On topic a little more -- and I haven't done the math to back up my statement I'm going to make - but I think the math would back me up...

Some of these credit card companies are charging near 25% interest... so while you might feel better paying off the smallest amounts first -- the INTEREST is going to eat you alive while you're doing that.... which is why most advisors recommend you pay off the highest interest balances first.

Very good advice Greg.

I've never been in debt, but if I had been, I would attack the higher interest rates first as those seem to only GROW if you do not pay them down. Send in as much as you can to pay it off asap. If not, you are not even putting a dent into the principal amount.
GOOD LUCK!!

70rs · #33 01-01-2010, 02:19 PM

The only thing minimum payments do is make the card company more money. They do ALMOST nothing to actually pay the balance down.

IndyNova · #34 01-01-2010, 06:44 PM

I am currently in debt, but working to pay it off, but like dave ramsey says, credit scores don't mean anything. he says his score is zero b/c he pays cash for everything. i try to explain to my wife when she wants to go out and try and finance this or that, that we'll just save up and pay cash, we don't get the item right away, but we don't have that debt hanging over our heads. no one ever taught me the value of a dollar, or credit or anything like that, i learned, am learning, the hardway. my new years resolution was to become debt free, and I am going to stick to it, I am really tired of missing opportunities to get a killer deal on something because I don't have any money!!
(sorry, i didn't mean to get off track)

Vegas69 · #35 01-01-2010, 07:17 PM

I disagree with Ramsey or you, credit does mean something. That is, until you don't need it anymore. Anybody that has done it the hardway has borrowed money to get to the point of paying cash for everything. The saying is, credit means nothing if you have cash.

**Spiffav8** · #36 01-01-2010, 08:17 PM

Quote:

Originally Posted by Vegas69

I disagree with Ramsey or you, credit does mean something. That is, until you don't need it anymore. Anybody that has done it the hardway has borrowed money to get to the point of paying cash for everything. The saying is, credit means nothing if you have cash.

Agreed! This is the use it or lose it type of thing. There is a simple trick that gives you the best of both worlds...or at least I think so. I use a credit cards to pay for most everything, but I pay off the balance every month. One card gets things like the cell phone bill and cable tv charged to it and the other I use for gas and groceries type of things. Not going over the budget is the hard part. I check my credit report bi-monthly and my accounts always show a balance, yet I paid my accounts off even before the bill was due. Best part is...my credit score is rockin!

IndyNova · #37 01-01-2010, 08:47 PM

if you have the cash, why do u need credit? suppose you have something unexpected happen, and you had 5 grand out on credit cards, and you were unable to pay it, what then? if you had just paid cash, then no worries right? I mean, how many people now have to worry about paying for the christmas gifts that they bought? I guess from my p.o.v, after seeing how hard it is to crawl out of the hole credit can put you in, i just as soon not need the burden or credit cards.

**Spiffav8** · #38 01-02-2010, 01:15 AM

Quote:

Originally Posted by IndyNova

if you have the cash, why do u need credit? suppose you have something unexpected happen, and you had 5 grand out on credit cards, and you were unable to pay it, what then? if you had just paid cash, then no worries right? I mean, how many people now have to worry about paying for the christmas gifts that they bought? I guess from my p.o.v, after seeing how hard it is to crawl out of the hole credit can put you in, i just as soon not need the burden or credit cards.

I see your point, but say you want to buy a house...do you really have that much free money that you can just buy it? Those types of big ticket items you need credit to get and the better your credit the better the interest rate, etc. If you can go out and pay cash for a car or daily items that's awesome. A lot of people seem to see a lot of credit as good credit, which just isn't true. You can make small accounts work really well for you if you play your cards right.

ProTouring442 · #39 01-03-2010, 04:45 PM

Quote:

Originally Posted by IndyNova

if you have the cash, why do u need credit? suppose you have something unexpected happen, and you had 5 grand out on credit cards, and you were unable to pay it, what then? if you had just paid cash, then no worries right? I mean, how many people now have to worry about paying for the christmas gifts that they bought? I guess from my p.o.v, after seeing how hard it is to crawl out of the hole credit can put you in, i just as soon not need the burden or credit cards.

Your sword cuts both ways. What if you suddenly had to spend 5 grand for something you could not do without, to repair plumbing you could not repair yourself, as an example, and you did not have the money because you only pay cash and had no means to gain any sort of time payment?

We use our one credit card, and always pay it off, this has given us very good credit. It has also enabled us to get a Lowe's "project card" when we needed it to finish our home in order to put it on the market. We have no way of extending the date we put it on the market as we need to have it sold and closed by April. Without credit, made accessible to us because we pay everything off and thus can both afford the "loan" as well as the payments if everything were to go south and our home did not sell.

Credit is a tool. Like any tool, if used recklessly, or if abused, it can cause serious damage or injury to the user.

Happy New Year!
Bill

Northeast Rod Run · #40 01-08-2010, 07:06 PM

people that aren't rich NEED credit. there is no such thing as not needing credit. I learned (am still learning) the hard way. I have about 6 or 7 credit cards. I use them all (some too much at times), but only carry a constant balance on one of them.

I make a decent wage, but I am far from affording a very comfortable living. I'm not one of those people that live paycheck to paycheck, but I have to watch my pennies now and again.

I am in the process of buying a house right now, and I can only afford a small downpayment, so no one can tell me that your credit score doesn't mean anything. I just found out my credit score and it's just a touch over 800, so you mean to tell me that someone with no credit is going to come close to getting the same interest rates that I get? That isn't going to happen. no way.... no how...