credit cards

[Yuhjn]

I know this has come up before, but I wanted to get a fresh look at it in a thread of it's own.

Many LHBA members are believers in the "dont own a credit card" method of living and paying for things.

I'm a big beliver in the "no debt" phillosophy myself, but I do have a credit card, carry a 0 balance, and use it all the time.

My thinking was that why wouldnt you use a credit card for all your log home purchases where you would normally be using cash/savings?

My card gives me 1% cash back on all purchases, and I keep it at a 0 balance every month, so if I spend $100,000 on building supplies, services, and everything else I need to spend money on to construct my home, that's $1000 for free!

So why would anyone not take advantage of free money?

[edkemper]

My Cabela's card gives me a percentage credit back. I always pay it off and I get to buy toys for free every so often. I'm going to have lots of credit coming by the time I'm finished with my home. The credit card is never the problem. A balance due after payment is always a problem.

[tanderson]

I had a buddy who was a finance major and he really enjoyed using credit for purchases while his own money was earning interest somewhere else. He always paid it off in full before any finance charges were applied. He was a really good guy, but passed away at 26.
I was never a finance major, or a lawyer. I have no inclination to read and no ability to understand the regular changes to my cardholder agreements. I just figure they aren't going to make changes that benefit ME. I use my credit sparingly and try to maintain the lowest balance possible.
Here's a link to a really good FRONTLINE video about the credit biz.
http://www.pbs.org/wgbh/pages/frontline/shows/credit/

[2 cents]

I am so on this bandwagon. I'm such a good user of credit cards, that they pay me to use them.

The funny thing is, credit cards are great if you don't actually need to borrow money. If you do then it's best to get something else.

I've been on both sides and I've worked myself silly to be where I am now, it's great to be on the other side and to be able to use the cards in such a way that each time I use them, I know for a fact that I can pay them, and hence I am ahead by using them now.

[Shark]

Same here.
We basically paid for most of our house on the card, but pay it off full every month. Lots of points (air miles, products etc) but no interest.

If we can't afford to pay something that would have to go on the card, it doesn't get purchased until we actually have the $$ for it. (Hence no decks or garage yet)....

It's a fact though, that most people tend to spend more if they use a credit card, compared to if they use cash for everything. (regardless if the card gets paid off every month or not).

[Yuhjn]

It's a fact though, that most people tend to spend more if they use a credit card, compared to if they use cash for everything. (regardless if the card gets paid off every month or not).

True enough. Fiscal discipline isnt something everyone has. On the other hand I would expect the % of LHBA members who can manage their money to be vastly higher than the average American. :)


Learning to manage your priorities well can lead you to anything you want in life, including a beautiful log home.

Learning to manage your expectations in life... that leads to wisdom.

[StressMan79]

why can cc's afford to pay you 1% cash back? B/C they get 3% profit on purchases, aside from a few loopholes, if a company accepts credit cards, they are not allowed to recoup that 3% by federal law. You are paying 3% more on almost everything you buy (even if using cash). It is built into the prices.

I recently read an article where they say that prices are not set, despite the "no-haggling" stance of american retail. If you are going to buy 1000 worth of tools, offer them 950 (3% markup+2% discount) and tell him you'll pay cash. They'll likely take the deal, and you save WAY more than the $10 you get from taking the cash back.

I might sound like I'm preaching, however, I am something of a pharisee. You see, I have never done this, and probably won't, but it does make sense. CC's have a racket protected by federal law.

FWIW.

[Yuhjn]

why can cc's afford to pay you 1% cash back? B/C they get 3% profit on purchases, aside from a few loopholes, if a company accepts credit cards, they are not allowed to recoup that 3% by federal law. You are paying 3% more on almost everything you buy (even if using cash). It is built into the prices.

I recently read an article where they say that prices are not set, despite the "no-haggling" stance of american retail. If you are going to buy 1000 worth of tools, offer them 950 (3% markup+2% discount) and tell him you'll pay cash. They'll likely take the deal, and you save WAY more than the $10 you get from taking the cash back.

I might sound like I'm preaching, however, I am something of a pharisee. You see, I have never done this, and probably won't, but it does make sense. CC's have a racket protected by federal law.

FWIW.

Well you've said yourself it's built into the prices even when you pay cash. Then you said you read an article that suggests haggling with the guy at Home Depot about the price of that skill-saw or whatever. Then you finished it up by saying you dont, and wont, do this yourself.

So first I would say that if you're buying from Jim's local hardware store, owned and operated by Jim, for 45 years, that you can probably haggle quite a bit about the price. But when you online-order that demo-hammer from harbor freight, Jenny the girl who replies to your emails, is unlilkley to give you the "old timers" discount on your purchase.

I pay cash for things all the time. It's often a very good way to get a great deal. Nothing like waving a wad of cash in front of the nose of someone who's CraigsList add you've dropped by about.

So I'm not saying you shouldnt pay cash when it's advantageous to do so. I'm saying should do that, and additionally you should pay with a CC when it's advantageous to do so.

But I'm an oppertunist, not an idealist.

[2 cents]

one of many jobs i've had in the past was at a pro camera store. it's a small privately owned store that is still in business, and it's still where all the pros in town go.
anyway, you can get an account there, and if you pay your account off early in the month, you get a 2% discount.. but only if you pay cash or check, not by credit card.
when i worked there i had an account, tended to purchase used stuff, had a small employee discount, and paid my account early and by check.
they would also haggle prices there, and were known for their sales people not getting commission.
even with all that, when working there i found that often we really just couldn't beat some of the big guys on price. but some people would buy from us anyway just on principle.

so stuff like that can still be done. you just have to keep your eyes open for where and when it can be done, and whether or not you are still getting the best deal at that point.

you can even get extra discounts at Goodwill, it's called club goodwill, you pay $10 and they give you a card that gives you 10% off allthe time and 25% off on your birthday. who would have thought, they are already dirt cheap.

2 cents
(the cheapest--ha)

ps-- i worked for the camera store but not goodwill, if it matters to anyone.

[WillandHelen]

I recently read a book on starting a small business while setting up my own timberframe company. It outlined why credit cards are great for the consumer and terrible for the retailer because the credit card company will almost always go to bat for the consumer. After all the debit card horror stories I hear. And the need for something plasic these days...I'm sticking with the credit card.

[Timber]

debit card horror stories? you mean the quadrillion dollar pack of cigarettes? I wonder if there is that much money in the entire world together? well the way there printing it ....maybe they can get that high

[Timber]

debit card horror stories? you mean the quadrillion dollar pack of cigarettes? I wonder if there is that much money in the entire world together? well the way there printing it ....maybe they can get that high





<a href="http://www.guardian.co.uk/world/2009/jul/16/man-buys-cigarettes-23-quadrillion">http://www.guardian.co.uk/world/2009/jul/16/man-buys-cigarettes-23-quadrillion</a>

[Yuhjn]

Nice link Timber.

I dont like debit cards either. Nothing standing between my little checking account and the big corporate bastards I'm giving my # to. I'd rather let my CC company charge me $50 for a fraud claim and be done with it than worry about getting someone to replenish the balance of my checking account.

[patrickandbianca]

Cash in hand works for big box stores also.
Lowes - 700 dollar fridge for 630. It was to easy. I said that it was to expensive, can you drop the price. 10 minutes later they are loading it in my truck.
KMART - 500 dollar outdoor furniture. 400 dollars. One tiny scratch (10 % off), store managers discount (10 %).
Please note. I wasnt rude, or aggressive about this which seemed to help.
I am MUCH more likely to ask for a discount at a big box store than a mom and pop store. Mom and pop are probably holding on by a thread and they need 10 percent of the value more than me.
I got few thousand off a truck that was ALREADY a few thousand less than KBB, from a dealer, because I had cash.

Patrick

[StressMan79]

I did tell one store (local) what I could get [rope] for. He came within 1 cent/foot, and I didnt' have to go down to seattle to get it. Saved me time, cost me $6. their normal per foot price was > double the reduced price.

I payed with debit card.

-Peter