Comments on: Your credit card interest rate doesn’t matter http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter/ Personal finance blog for college students, recent graduates and everyone else -- including entrepreneurship -- for getting rich. Featured in the Wall Street Journal and New York Times. Sun, 12 Feb 2012 18:46:58 +0000 hourly 1 http://wordpress.org/?v= By: Bala http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter/#comment-104644 Bala Wed, 29 Jul 2009 09:36:52 +0000 http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter#comment-104644 hi, what a junk article, do you think that you have conveyed something Great.if you think so, then there is something wrong with your thinking process itself. Inwhich way the article and the topic heading co-relating . hi,
what a junk article, do you think that you have conveyed something Great.if you think so, then there is something wrong with your thinking process itself. Inwhich way the article and the topic heading co-relating .

]]> By: Olivia http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter/#comment-68165 Olivia Thu, 31 Jul 2008 02:04:22 +0000 http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter#comment-68165 Well, you should know if you have great self control it is also wonderful to use balance transfer offers for car loans. I have really good credit and do get the "great low rates on cards" so I am one of those that also gets the 18 month 0% offers or 1.9% offers for 12mths. Most recently I got an offer of 0% for 12 months. In the past 10 years I have bought two cars totaling $45,000 and used balance transfer offers. I have paid less than $400 to 500 to do this, total for these cars including interest and transfer fees. This is a steal. No, I did not have much saved up either. Anyway, think about the interest on a $20,000.00 car @ 7% for 1 Year. That is around $1,400 for the 1st year alone. YUCK! SO...Think about it. The low rate is definitely important. The difference is that you don't need the flexibility of carrying a balance past one month, but some people do. Personally, I only use them for car loans because I do better than saving up or financing through the bank or credit union. Sounds like you need to just cut your credit cards up and use a debit card. I am a little confused as to why you are giving this kind of credit card advice though. Afterall, all you need for an emergency is a debit card, anyone can run it as a credit. I never give out my pin number and always run it as a credit, everyone knows that. Check with your bank. That way when you tell people interest rates don't matter it will be because you don't have one, instead of the fact that someone elses may be lower than yours. It just sounds like to me you are fed up with a few braggarts that told you your rate was too high. Can't really blame you for that either though. They can be pretty annoying. Met one this past weekend. GOD BLESS!!!! Well, you should know if you have great self control it is also wonderful to use balance transfer offers for car loans. I have really good credit and do get the “great low rates on cards” so I am one of those that also gets the 18 month 0% offers or 1.9% offers for 12mths. Most recently I got an offer of 0% for 12 months. In the past 10 years I have bought two cars totaling $45,000 and used balance transfer offers. I have paid less than $400 to 500 to do this, total for these cars including interest and transfer fees. This is a steal. No, I did not have much saved up either. Anyway, think about the interest on a $20,000.00 car @ 7% for 1 Year. That is around $1,400 for the 1st year alone. YUCK! SO…Think about it. The low rate is definitely important. The difference is that you don’t need the flexibility of carrying a balance past one month, but some people do. Personally, I only use them for car loans because I do better than saving up or financing through the bank or credit union. Sounds like you need to just cut your credit cards up and use a debit card. I am a little confused as to why you are giving this kind of credit card advice though. Afterall, all you need for an emergency is a debit card, anyone can run it as a credit. I never give out my pin number and always run it as a credit, everyone knows that. Check with your bank. That way when you tell people interest rates don’t matter it will be because you don’t have one, instead of the fact that someone elses may be lower than yours. It just sounds like to me you are fed up with a few braggarts that told you your rate was too high. Can’t really blame you for that either though. They can be pretty annoying. Met one this past weekend. GOD BLESS!!!!

]]> By: Basiex http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter/#comment-42426 Basiex Sat, 01 Dec 2007 03:54:04 +0000 http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter#comment-42426 The 3% transaction fee wipes out any profit one can make on a low interest card. Basiex The 3% transaction fee wipes out any profit one can make on a low interest card.
Basiex

]]> By: Laura http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter/#comment-41945 Laura Mon, 26 Nov 2007 20:46:56 +0000 http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter#comment-41945 I have a credit card with 18.99%. I don't mind too much as I get cash back and I pay the balance in full. Thanks for posting an article that has common sense. I have a credit card with 18.99%. I don’t mind too much as I get cash back and I pay the balance in full. Thanks for posting an article that has common sense.

]]> By: Jonathan van Clute http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter/#comment-250 Jonathan van Clute Thu, 24 Aug 2006 21:26:48 +0000 http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter#comment-250 Forgive me, but in my opinion this post and the sentiments expressed in it, are dead wrong. One thing is absolutely right however - your credit card interest rates DON'T matter, but not at all for the reasons expressed. They don't matter because if you use it like the very powerful tool it is, your credit card can make you lots and lots of money. If you borrow say $3000 on a credit card at 2.9%, and use that money as the down payment on a rental property that costs $30,000 and pays you $400 per month in rent, you have effectively just given yourself a 2.9% second mortage - something simply not possible ordinarily. This means you will have gotten into a "no money down" deal, that puts additional cash in your pocket every month, net of expenses, management, everything. Think I'm making those number up? Think again. I have 4 such properties right now with more coming regularly. Paying off your credit cards every month being good for your credit is ALSO a total myth. Anyone who has actually put this into PRACTICE knows that the best way to increase your overall credit picture as far as credit cards goes, is to use them, and pay them off over 3 months or so. How do I know this? Well, I'm no guru... but I would say I'm an "expert" based on experience, not based on what I write on the internet. I paid off a Chapter 13 bankruptcy in January of 2006 (this year - just 9 months ago!) As of a month ago, I had a 718 FICO score. How on earth do I have a 718 score fresh out of bankruptcy? Working the system. Using the rules of the system to my advantage. I have one credit card only, and it had a 700 limit. By using it and paying it down over a couple months at a time, I now have a $1500 limit on that card and could probably get other cards if I wanted to, which at this point I don't (by the way, the best number of credit cards to have is 3). My partner and I are professional, full time real estate investors. We don't do "fix & flip" or speculate in crazy markets like our home in Northern California. We buy RIGHT, and we make money - consistently. We make returns of 1000 to 3000% (yes, THREE THOUSAND PERCENT) on our cash, when we even use our own cash. This is NORMAL. We also bought a house in the San Francisco Bay Area with 20% equity in it when we walked in the door, then we cleaned it up a bit and added another 100k to the value. But there are no shortage of people who tells us that we can't do what we do. If only they new or were willing to listen... So in closing... please do not believe everything you read ESPECIALLY on the internet. When it comes to your financial future, you need to do your own homework and get as many different points of view on the subject as possible, and you need to be in many different investment vehicles in order to find the one(s) that suit you best. Personally, I like to make infinite% returns, which is quite easy when you learn how to produce positive cash flow without using any of your own money. Oh also I would say that a very valuable book for us has been the eBook available at www.learnaboutcredit.com - we put into practice what he writes about and saw immediate results to our credit scores, limits, and overall comfort with utilizing credit to its fullest extent. Happy investing everyone! Jonathan van Clute www.CashFlowRealDeals.com Forgive me, but in my opinion this post and the sentiments expressed in it, are dead wrong.

One thing is absolutely right however – your credit card interest rates DON’T matter, but not at all for the reasons expressed.

They don’t matter because if you use it like the very powerful tool it is, your credit card can make you lots and lots of money.

If you borrow say $3000 on a credit card at 2.9%, and use that money as the down payment on a rental property that costs $30,000 and pays you $400 per month in rent, you have effectively just given yourself a 2.9% second mortage – something simply not possible ordinarily. This means you will have gotten into a “no money down” deal, that puts additional cash in your pocket every month, net of expenses, management, everything.

Think I’m making those number up? Think again. I have 4 such properties right now with more coming regularly.

Paying off your credit cards every month being good for your credit is ALSO a total myth. Anyone who has actually put this into PRACTICE knows that the best way to increase your overall credit picture as far as credit cards goes, is to use them, and pay them off over 3 months or so.

How do I know this? Well, I’m no guru… but I would say I’m an “expert” based on experience, not based on what I write on the internet. I paid off a Chapter 13 bankruptcy in January of 2006 (this year – just 9 months ago!) As of a month ago, I had a 718 FICO score. How on earth do I have a 718 score fresh out of bankruptcy? Working the system. Using the rules of the system to my advantage. I have one credit card only, and it had a 700 limit. By using it and paying it down over a couple months at a time, I now have a $1500 limit on that card and could probably get other cards if I wanted to, which at this point I don’t (by the way, the best number of credit cards to have is 3).

My partner and I are professional, full time real estate investors. We don’t do “fix & flip” or speculate in crazy markets like our home in Northern California. We buy RIGHT, and we make money – consistently. We make returns of 1000 to 3000% (yes, THREE THOUSAND PERCENT) on our cash, when we even use our own cash. This is NORMAL. We also bought a house in the San Francisco Bay Area with 20% equity in it when we walked in the door, then we cleaned it up a bit and added another 100k to the value. But there are no shortage of people who tells us that we can’t do what we do. If only they new or were willing to listen…

So in closing… please do not believe everything you read ESPECIALLY on the internet. When it comes to your financial future, you need to do your own homework and get as many different points of view on the subject as possible, and you need to be in many different investment vehicles in order to find the one(s) that suit you best. Personally, I like to make infinite% returns, which is quite easy when you learn how to produce positive cash flow without using any of your own money.

Oh also I would say that a very valuable book for us has been the eBook available at http://www.learnaboutcredit.com – we put into practice what he writes about and saw immediate results to our credit scores, limits, and overall comfort with utilizing credit to its fullest extent.

Happy investing everyone!

Jonathan van Clute
http://www.CashFlowRealDeals.com

]]> By: john http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter/#comment-249 john Mon, 07 Aug 2006 18:39:30 +0000 http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter#comment-249 prlinkbiz, you're nuts! i started out with a low credit limit on my first card (I also got it to establish credit), and within 6 months of paying the whole thing off every time, the company raised the credit limit from 500 to 2000. I'm sure they would raise it more if I needed it. prlinkbiz, you’re nuts! i started out with a low credit limit on my first card (I also got it to establish credit), and within 6 months of paying the whole thing off every time, the company raised the credit limit from 500 to 2000. I’m sure they would raise it more if I needed it.

]]> By: Ramit Sethi http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter/#comment-248 Ramit Sethi Sat, 05 Aug 2006 18:56:28 +0000 http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter#comment-248 Wait, why 30%? Have you heard of your <a href="http://biz.yahoo.com/pfg/e35score/art021.html" rel="nofollow">debt-to-credit ratio</a>? Lower is better for your credit score. Wait, why 30%? Have you heard of your debt-to-credit ratio? Lower is better for your credit score.

]]> By: prlinkbiz http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter/#comment-247 prlinkbiz Sat, 05 Aug 2006 18:49:06 +0000 http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter#comment-247 I carry a 30% balance on my cc. This is a strategy I am using for building credit. It is a low limit card, that I use only for already budgeted monthly expenses. I do not care what the interest rate is, because the credit it is building for me will allow me to make many times that amount. Credit is like a muscle- use it or lose it. Use it wisely, and it can be an invaluable tool to financial freedom. I carry a 30% balance on my cc. This is a strategy I am using for building credit. It is a low limit card, that I use only for already budgeted monthly expenses. I do not care what the interest rate is, because the credit it is building for me will allow me to make many times that amount. Credit is like a muscle- use it or lose it. Use it wisely, and it can be an invaluable tool to financial freedom.

]]> By: Marnell Bookins http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter/#comment-246 Marnell Bookins Sat, 05 Aug 2006 00:51:00 +0000 http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter#comment-246 Run these numbers, pay 50% of a credit card balance each month for 6 months or less, calculate the actual real rate of interest. Run these numbers, pay 50% of a credit card balance each month for 6 months or less, calculate the actual real rate of interest.

]]> By: Marla http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter/#comment-245 Marla Sat, 23 Jul 2005 06:16:39 +0000 http://www.iwillteachyoutoberich.com/blog/your-credit-card-interest-rate-doesnt-matter#comment-245 Ah, but if your credit card offers a fixed rate balance transfer that is lower than the interest rate of your current student, business or car loan, and you don't use that card for anything else, it can be quite economically smart to carry the balance there rather than with the higher rate lender. For example, we took out a small business loan which I transferred to a credit card at 2.9% fixed. I don't use the card at all. Just make the biggest payments we can every month. We did the same thing with our car loan and the balance on my student loan. Because you can't beat a 2.9% fixed APR. Ah, but if your credit card offers a fixed rate balance transfer that is lower than the interest rate of your current student, business or car loan, and you don’t use that card for anything else, it can be quite economically smart to carry the balance there rather than with the higher rate lender. For example, we took out a small business loan which I transferred to a credit card at 2.9% fixed. I don’t use the card at all. Just make the biggest payments we can every month. We did the same thing with our car loan and the balance on my student loan. Because you can’t beat a 2.9% fixed APR.

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