Loan experts chime in please

[JettaKnight]

Sounds like you have the same problem as my wife and I. Lenders almost literally throw money at us to get us to use it. Not too long ago one of our credit cards sent us the 0% interest checks for 12 months and no transfer/purchase/usage fee. I promptly wrote it to myself for the credit limit and stuffed it in the bank just in case we wanted to pay for something over time. When the promotional period was over back to $0 balance it went. We didn't really need it but since they weren't going to charge us for it I figured I might as well use it even if only temporarily.

Can you get a nine month CD?

 

[JettaKnight]

Imagine my irritation to learn that my wife has a 3 point higher credit score than I do...and she has no source of income...other than me.

 

[churchmouse]

Imagine my irritation to learn that my wife has a 3 point higher credit score than I do...and she has no source of income...other than me.

And yes, debt properly managed can be a great tool.

But keep in mind those who are coming to Ramsey for help. You don't offer half a glass of wine to an alcoholic. You encourage them to abstain completely.

And this is the really hard part for a lot of folks. Total withdraw and abstinence. WE would never be able to do that. Not weak just not ones to sit on the couch in the dark with no cable/economy **** box ugly car/​no guns/

 

[russc2542]

Imagine my irritation to learn that my wife has a 3 point higher credit score than I do...and she has no source of income...other than me.

And yes, debt properly managed can be a great tool.

But keep in mind those who are coming to Ramsey for help. You don't offer half a glass of wine to an alcoholic. You encourage them to abstain completely.

So true.

Remember, credit isn't a measure of how reliable you are or how good you are at managing money. It's how much money they have/can make off of you.

 

[Hohn]

So true.

Remember, credit isn't a measure of how reliable you are or how good you are at managing money. It's how much money they have/can make off of you.

Not really. Lower credit scores are far more profitable. Hence the "sub prime" rush. And payday lenders. Credit rating is a measure of risk.

My bank isn't making as much on my 2.75% APR mortgage as they could be making off someone with a lower rating on a longer term.

 

[Hohn]

He told me there WILL be another recession because of what people are doing.

There will be another recession because business cycles. Bankers have little to do with it.

 

[HoughMade]

...My bank isn't making as much on my 2.75% APR mortgage as they could be making off someone with a lower rating on a longer term.

Well, they are, until they're not. I fear their institutional memories really are that short.

 

[Hohn]

This. In general he gives good advice, but when it comes to housing I can't disagree more. You could try to save for 30 years and buy the house you always wanted, or you could take advantage of your good credit and enjoy it 30 years earlier.

Most debt is for things that depreciate. Housing in general appreciates. If it is appreciating faster than the interest you're paying on it you're $$ ahead and you get a nice place to spend the majority of your life. Debt used responsibly can be very beneficial. That said I know plenty of people can't be responsible with their debt and don't look farther ahead than the next month or paycheck. Lenders will lend far more than most people can pay back. While some will blame the lender, I tend to blame the people who don't take responsibility for their own financial well being.

Disclaimer: I'm no financial adviser and don't usually give advice, only lay out facts. People are free to make their own decisions.


This too.

If Dave offered the advice as you represent it, I'd entirely agree. But he doesn't at all suggest saving for 30 years to get a house.

Debt/Credit CAN be useful. Absolutely. It's the single greatest enabler of getting businesses off the ground. Not to mention getting people through college.

But it also CAN be the end of you if you buy dumb things with it (i.e. depreciating assets). Your college education might be a good use of credit. Unless you are needlessly overpaying for an overpriced school and getting 100k in debt for a social work degree that will let you earn 45k.

Apart from credit getting businesses off the ground, it is also the single biggest reason that businesses fail. They get too far into debt.

There are some things I also disagree with Dave a bit on (his cash only vs credit/debit cards) for example. It may be true that spending on a card causes you to spend a bit more sometimes. But it is NOT true that nobody can manage a credit card and having one is the certain path to serfdom. I know of people that could--if they wished-- go out tomorrow and rack up 25k in credit card debt. But they reason they have such a high credit limit is *precisely* because they don't do that. And never would.

People like this can carry a card and get freebies and never pay a cent in interest. And it's a useful tool to them. But they are the exceptions that prove the rule.

And the people calling in to a radio show are not people that are in that "exception" group. For Dave's purposes and for his audience, his advice is sound.

 

[Hohn]

Well, they are, until they're not. I fear their institutional memories really are that short.

Shorter than even you feared.

 

[JettaKnight]

[h=1]Dave Ramsey Releases Official Line Of Budget Ramen[/h]