Dave Ramsey is just plain wrong about CC interest
Posted: Fri Oct 11, 2019 7:32 pmSpecifically balance transfers.
Yeah, I suck at money, but I'm also not dumb enough to give it away foolishly (doesn't Dave always say we should be 'good shepherds of God's money'?) Well math and God are really on my side.
Currently CC #1 has a balance of $5056 at 18.74% for an interest payment of $68. JUST INTEREST. No principal.
CC #2 has a 14 month balance transfer at .99% (less than 1% APY) with a 3% transfer fee. So its $150 for the fee and $31 in interest OVER 14 MONTHS.
So at what point is ($68*14) ~$1204 disappearing into THIN AIR (aka interest, not principal payment) vs $181 in fees and interest, or SAVING $1023 not a smart move and a wise financial decision???????
I get that if you are weak and run up the card again you really lose, but that's not on the math. You could easily spend out of your budget and be just as guilty.
And why don't I cut up my CC's? Living off debit cards is stupid and gives you no immediate fraud protection (ie they debit your account YOUR money is gone, until the bank is nice enough to maybe, possibly give it back.
Yeah, I suck at money, but I'm also not dumb enough to give it away foolishly (doesn't Dave always say we should be 'good shepherds of God's money'?) Well math and God are really on my side.
Currently CC #1 has a balance of $5056 at 18.74% for an interest payment of $68. JUST INTEREST. No principal.
CC #2 has a 14 month balance transfer at .99% (less than 1% APY) with a 3% transfer fee. So its $150 for the fee and $31 in interest OVER 14 MONTHS.
So at what point is ($68*14) ~$1204 disappearing into THIN AIR (aka interest, not principal payment) vs $181 in fees and interest, or SAVING $1023 not a smart move and a wise financial decision???????
I get that if you are weak and run up the card again you really lose, but that's not on the math. You could easily spend out of your budget and be just as guilty.
And why don't I cut up my CC's? Living off debit cards is stupid and gives you no immediate fraud protection (ie they debit your account YOUR money is gone, until the bank is nice enough to maybe, possibly give it back.