What age to be a millionaire?

[Elkmagnet]

I’ve had three conversations with people with good credit tell me they never pay for airfare by using CCs to earn points. They pay off the cards every month. Demographics of the people are similar and I believe they are paying off the cards.

I don’t use CCs so I was a little stunned. Am I missing a perk I should chase or to hell with CCs? I haven’t run out to get a perk CC yet nor had the conversation with my wife.

If it's not broken don't fix it!

 

[TOGIE]

I’ve had three conversations with people with good credit tell me they never pay for airfare by using CCs to earn points. They pay off the cards every month. Demographics of the people are similar and I believe they are paying off the cards.

I don’t use CCs so I was a little stunned. Am I missing a perk I should chase or to hell with CCs? I haven’t run out to get a perk CC yet nor had the conversation with my wife.

i mean, it is free money. use your credit cards for all of your spending, treat em like cash, and keep the spending in the budget and as long as the CC has no annual fee it's literally just free money. so why not?

i think miles rewards are dumb, but that's just me. in this context i do think cash is king - i take all of our credit card cash rewards and pile them straight into a S&P500 ETF every month.

 

[Deleted member 52098]

i mean, it is free money. treat your credit cards like cash and keep the spending in the budget and it's literally just free money.

i think miles rewards are dumb, but that's just me. in this context i do think cash is king - i take all of our credit card cash rewards and pile them straight into a S&P500 ETF every month.

If you pay off a card each month, you'd be silly not to use a credit card. One its the ultimate fraud protection when compared to fraud on a debit card. Two, those perks can add up.

I use a 2% cash back for our personal use and my business uses United Mileage plus. I've flown out family, taken spotaneous trips and even flew the wife and I to Italy and back first class using nothing but points.

Pick cards that work for your individual lifestyle, pay em off each month and watch the benefits accrue (perfect credit, cash back / points)

 

[Deleted member 28227]

Those are shockingly low numbers for "household"

 

[SAJ-99]

Did you not just post two graphs that show people are paying twice the % of their disposable income on CC interest in 2023 vs 2013?
I'm confused on what your argument is?

Not arguing rates didn’t go up. I’m asking you to 1) stop making up numbers like 9%. And 2) look at the number relative to income or some measure of assets. You can’t just look at the expenses of an income statement and flip out. On average we are still in good shape. But yes, the poor are worse off than the rich. Spoiler alert, that is always the case when it comes to money.

 

[mtmiller]

I’ve had three conversations with people with good credit tell me they never pay for airfare by using CCs to earn points. They pay off the cards every month. Demographics of the people are similar and I believe they are paying off the cards.

I don’t use CCs so I was a little stunned. Am I missing a perk I should chase or to hell with CCs? I haven’t run out to get a perk CC yet nor had the conversation with my wife.

I haven't paid an interest fee on my AK card (only card I have) in at least 15 years, though I think there is a $95 annual fee. Flew to King Salmon last year for $74 (I upgraded seat on a couple legs). I will be doing the same again this year.

Credit cards are for the disciplined.

 

[Lilhowie83]

To be serious for a second you guys might be sick at what is driving the home refinancing industry right now.
People are refinancing 2-4% home loans to7-8.5% in order to pay off very large CC debt. That and divorce is literally carrying the industry in our area and still the national CC debt went from 900 billion last fall to 1.3 trillion now.

My step mom asked me last week if she should refinance her house from a 2% interest rate to around an 8% rate, all for the sake of throwing her credit cards on the house. My jaw hit the floor at her stupidity. I'm sure my dad was rolling over in his grave.

 

[Elkmagnet]

Not arguing rates didn’t go up. I’m asking you to 1) stop making up numbers like 9%. And 2) look at the number relative to income or some measure of assets. You can’t just look at the expenses of an income statement and flip out. On average we are still in good shape. But yes, the poor are worse off than the rich. Spoiler alert, that is always the case when it comes to money.

So if CC debt was bad in 2013 then as an adjusted % it's twice as bad now. You just posted two graphs when put together show that. Its not just the amount of money borrowed its also the cost of credit you need to look at.
FYI at some point I had a cc with a 9.99 rate. I'm not sure if that was the apr or not. The fees could easily have brought it in line with your graphs.
Im not sure how I'm flipping out.

 

[cgasner1]

All I’ll throw in here is not to write off the military as an option for young people. It’s not just HS diploma vs College degree vs Trade School. One can spend a few years figuring out life before choosing which route to go, or make a career out of it.

I’m garbage at school. Always have been. I love learning, but hate sitting in class and doing homework. I had to repeat a lot of classes in college. Without the GI Bill, I never would have made it through.

Thanks for doing that. Sure wouldn’t hurt to have more people enlisting

 

[Elkmagnet]

What’s worse is the number of people who try to clear debt that way didn’t do anything to change habits so when they run those cards back up they don’t have a fall back plan, now they have a bigger house payment and double the debt

This. People are going to make mistakes but dammit when you get in a hole stop digging!

 

[SAJ-99]

So if CC debt was bad in 2013 then as an adjusted % it's twice as bad now. You just posted two graphs when put together show that. Its not just the amount of money borrowed its also the cost of credit you need to look at.
FYI at some point I had a cc with a 9.99 rate. I'm not sure if that was the apr or not. The fees could easily have brought it in line with your graphs.
Im not sure how I'm flipping out.

You keep implying there is a problem. The data says there is no problem and it looks like business as usual, and the market agrees. I'm sure it is a problem for some specific individuals, but that is not the point. I don't think credit card balances are the thing that is holding those people back from hitting $1million.

 

[Elkmagnet]

You keep implying there is a problem. The data says there is no problem and it looks like business as usual, and the market agrees. I'm sure it is a problem for some specific individuals, but that is not the point. I don't think credit card balances are the thing that is holding those people back from hitting $1million.

I am. The data doesn't say that it says people are paying twice as much in interest. (That's the money that is being thrown away every month). Also a larger amount of the population is refinancing their homes to pay off CCs. Hurting their future spending power and financial security.
I'm not going to convince you to put the two charts together and do the math.

 

[brymoore]

If you pay off a card each month, you'd be silly not to use a credit card. One its the ultimate fraud protection when compared to fraud on a debit card. Two, those perks can add up.

I use a 2% cash back for our personal use and my business uses United Mileage plus. I've flown out family, taken spotaneous trips and even flew the wife and I to Italy and back first class using nothing but points.

Pick cards that work for your individual lifestyle, pay em off each month and watch the benefits accrue (perfect credit, cash back / points)

Ugh. I know you’re right. I’d be a little hypocritical in telling my kids never use CCs and then breaking out Visa to pay pizza.

I need to do some math. Free flights to Maui are a good incentive.

 

[Exhausted]

I am. The data doesn't say that it says people are paying twice as much in interest. (That's the money that is being thrown away every month). Also a larger amount of the population is refinancing their homes to pay off CCs. Hurting their future spending power and financial security.
I'm not going to convince you to put the two charts together and do the math.

As a small point of clarity, the second chart shows what interest rates are, not that those are the rates being paid by all with balances. As discussed above, I have several credit cards and all of them have an interest rate near or above 20% nowadays. But I don't pay interest on any of them because I pay them off everything month. Depending on when my balance is pulled, it could $0 or it could be $10,000+ which skews the first chart but not the second.

TLDR: Just because the companies have high rates doesn't mean everyone is paying them. You can't just combine the 2 charts.

To @brymoore I'm a small time guy (not a millionaire as I voted in the poll lol) and my main CC paid me about $2,000 last year straight into my Fidelity trading account. It's not a huge chunk of change, but it's free.

 

[jryoung]

I need to do some math. Free flights to Maui are a good incentive.

We've run our business on a BofA Alaska Airlines Visa for 20 years now. My credit limit is about 75% of my typical monthly spend, which forces me to make bi-monthly payments. Funny enough, BofA called me this morning and asked me if I wanted to increase my limit since I spend more. I said no, it forces me to avoid interest while I get free tickets from SJC to OGG.

 

[Irrelevant]

Ugh. I know you’re right. I’d be a little hypocritical in telling my kids never use CCs and then breaking out Visa to pay pizza.

I need to do some math. Free flights to Maui are a good incentive.

We've never paid for a flight, but we do go with the @TOGIE approach and just get 2% cashback then use it to buy the flights (but could theoretically buy anything else). Two trips to HI and one to greece.

 

[mtmiller]

Pick cards that work for your individual lifestyle, pay em off each month and watch the benefits accrue (perfect credit, cash back / points)

I have lots of issues, one being I can't wait for my monthly statement. I check my account weekly and just pay pay it electronically plus a few bucks. Not unusual to be in the black on my CC statement. Like I said, issues.

 

[rjthehunter]

Ugh. I know you’re right. I’d be a little hypocritical in telling my kids never use CCs and then breaking out Visa to pay pizza.

I need to do some math. Free flights to Maui are a good incentive.

For reference, I have 3 credit cards. I just checked rewards on one of them, and I have earned more than $3,000 in rewards on it since I opened it up in 2020.

I've never carried a balance on any of them.

 

[Elkmagnet]

As a small point of clarity, the second chart shows what interest rates are, not that those are the rates being paid by all with balances. As discussed above, I have several credit cards and all of them have an interest rate near or above 20% nowadays. But I don't pay interest on any of them because I pay them off everything month. Depending on when my balance is pulled, it could $0 or it could be $10,000+ which skews the first chart but not the second.

TLDR: Just because the companies have high rates doesn't mean everyone is paying them. You can't just combine the 2 charts.

That's a fair point depending on if the chart is of balance carried or just current balance. It's likely the latter. Definitely adds nuance to the discussion.

 

[buckbull]

The fraud protection alone is enough benefit to use a CC over a debit card. I use an Amazon CC for everything I can. Make a minimum of $30 per month on the rewards program. Sometimes alot more if I have a major expense. I pay it off monthly.