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lol. exactly what i was thinking. that article was terrible
The first half of the article is decent. It explains 'Manufactured Spending' fairly well. The article goes off the rails in the last half, and presents a conclusion that is not even related to the topic at hand -- No 'Manufactured Spender' ever carries a debt, period. If they do, then they're not properly 'Manufacturing their spending'. In reality, the second half of the article is this that same tired and often repeated over and over again warning about credit card use in general. |
Originally Posted by cbn42
(Post 21614389)
Someone who has a high credit score is likely 1) responsible with their money, and 2) holding a decent job. There is a correlation between credit score and income/savings. They are not the same, but they are correlated.
It doesn't have to be cash in the bank. It can be any liquid assets, like stocks or bonds, that can be sold if necessary without penalty in the unlikely event that no more 0% BT offers are available. |
Originally Posted by PaulMSN
(Post 21615000)
There are many people with a high credit score. There are fewer with $35K easily available to them. This is the US, a nation with a low savings rate.
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Originally Posted by cbn42
(Post 21613450)
I am assuming that the user has enough cash to pay off the loans at any time if necessary (which is not an unreasonable assumption for someone with $35K in loans and a 750 credit score).
As long as it is possible to make minimum payments and keep paying down the loan with 0% interest, there is no reason to pay it off more quickly. If the user does not have enough cash on hand, then there is the risk that 0% balance transfer offers will dry up and he will be stuck with a high-interest rate loan that he cannot immediately pay. That risk needs to be assessed carefully. I financed a $12 K used car loan years ago this way and remember that $35 K balance used to be a $55 K private student loan about 5 years ago paying around $500 INTEREST ONLY a month. Having good credit scores and carrying credit cards from different banks with high credit lines make it much easier to play this game strategically,and those BT offers won't disappear any time soon....based on my experience for the last 13 years playing this game...I miss the no balance transfer fees though. Again my point is at least in my case you can still do the MS thing even if you carry a balance on some CC (@0% hopefully )....if you know what you are doing and have a game plan if things go wrong like AA by the CC companies. High CC balances was never an issue or a negative when a reconsideration for a CC application was needed (number of recent inquiries is more important to them). |
Originally Posted by cbn42
(Post 21613450)
I am assuming that the user has enough cash to pay off the loans at any time if necessary (which is not an unreasonable assumption for someone with $35K in loans and a 750 credit score).
My spouse did get a nice 0% interest 1%fee from the USAir MC recently which is tempting. |
Originally Posted by flyernick
(Post 21647046)
If you do it right, the $35K cash to pay back the loan comes from MS which created the debt in the first place. Back in the early 2000s, the best deal was buying US Savings bonds with a credit card (Citi AA for me). Back then 0% balance transfer offers with no fee were pretty common. I was able to float several thousand of Savings Bond purchases for years using 0% BTs. They eventually dried up and the 3%fees became common and made the game much less profitable.
My spouse did get a nice 0% interest 1%fee from the USAir MC recently which is tempting. |
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