What type of credit card do you use when booking cruises?

[Stateroom_Sailor]

44 minutes ago, 2wheelin said:

And yet he’s the millionaire. How many of you are?

 

Within the context of the conversation, one of these must be true.  Dave became rich by:

A.  Excessively spending on shipboard accounts.

B.  Using a debit card

C.  Ambitiously becoming a radio personality, author, and media empire.

 

None of these factors either validates, nor invalidates, any of his advice.

[ducklite]

2 hours ago, 2wheelin said:

And yet he’s the millionaire. How many of you are?

Probably more than you think.  And in many cases, the first number isn't a one.  

[AlanF65]

I guess the most important point is "points" cards and credit cards have high interest rates. None of them make sense if you aren't going to pay the bill off every month, why pay 15%-39% interest to get 1%-5% back? If you don't typically pay your cards off every month you are probably better off with a card with a lower rate or a free 18 months of interest IF YOU CAN PAY IT  OFF before 18 months. The goal is to reduce the overall cost.

 

 

[Toofarfromthesea]

7 hours ago, 2wheelin said:

And yet he’s the millionaire. How many of you are?

 

For a millionaire, he made exactly the kind of rookie mistake he should have been warning the people who made him a millionaire against.  IMO he demonstrated exactly the kind of lack of thought, impulsiveness, and lack of discipline that characterizes people who should not have credit cards.  But by no means is that an argument against credit cards.

 

Lots of snake oil salesmen have become millionaires.  I think there are better measures of intelligence and capability than net worth.

 

But hey, if you like him and his advice, God bless you.  IMO, clever people can turn their credit card into a little profit center.

[Toofarfromthesea]

2 hours ago, AlanF65 said:

I guess the most important point is "points" cards and credit cards have high interest rates. None of them make sense if you aren't going to pay the bill off every month, why pay 15%-39% interest to get 1%-5% back? If you don't typically pay your cards off every month you are probably better off with a card with a lower rate or a free 18 months of interest IF YOU CAN PAY IT  OFF before 18 months. The goal is to reduce the overall cost.

 

 

 

I think this is what is meant when 'being responsible with credit's is talked about.  I haven't paid a cent in credit card interest charges in decades.  I don't even look at or know what the interest rate is on my CSR because it is inapplicable to me.

 

I know not everyone is in that situation, so I agree that unless you have the means and discipline to pay your balance in full, on-time, every single month, using a credit card is fraught with peril.  I don't object to Ramsay's advice on that score, it is his blanket condemnation of credit cards. 

 

It isn't a one-size fits all world which means advice depends on circumstances.  He would have me give up all the things I get from my credit card at 0 cost because someone else got themselves underwater with credit.  And that is just crazy.  Any advisor who gives everyone the same advice just has a schtick, not sound advice.

[Stateroom_Sailor]

I believe the most valid point Dave Ramsey makes against credit cards, is the behavior studies showing an increased spending over using cash.  He often cites an 11% increase at the grocery store using credit.  He and likely most of his followers, use a debit card, which would fall somewhere in the middle of the cash vs credit card spend.  If I'm overspending 6% over a debit card, and get 6% back on the card, it is still more of a wash.  Sometimes it is a good idea to look at your shopping cart, imagine pulling out $20 or $100 bills, and putting something back on the shelf.

[RocketMan275]

16 hours ago, Toofarfromthesea said:

 

And people take advice from him? 

 

SMH

A lot of people have turned the lives around following Ramsey's principles.  It's not for everyone but there are certain types that need Ramsey.  One of Ramsey's points is that putting stuff on cards leads to over spending.  You'll think more if you're paying cash than if you're using credit.

[Toofarfromthesea]

24 minutes ago, RocketMan275 said:

A lot of people have turned the lives around following Ramsey's principles.  It's not for everyone but there are certain types that need Ramsey.  One of Ramsey's points is that putting stuff on cards leads to over spending.  You'll think more if you're paying cash than if you're using credit.

 

Then he shouldn't sell it as blanket advice.  And I'd have to review the 'spend more with credit cards' studies myself, because most studies that get reported in the popular press are dreck to anyone with a statistical background.  But hey, it made him a millionaire.

Edited February 4, 2020 by Toofarfromthesea

[Underwatr]

Well, it sounds feasible. If I'm carrying $50,000 in my wallet I'm more likely to spend $100 on impulse than if I'm only carrying $150.

 

Now consider that $50,000 is a reasonable estimate of the total credit limit on the cards I carry.

[ilikeanswers]

21 minutes ago, Toofarfromthesea said:

Then he shouldn't sell it as blanket advice.  And I'd have to review the 'spend more with credit cards' studies myself, because most studies that get reported in the popular press are dreck to anyone with a statistical background.  But hey, it made him a millionaire.

 

There are actually numerous studies that have demonstrated that people are more likely to make a friviolus purchase using either debit or credit card whereas if asked to hand over cash it seems to make people stop, think and reconsider purchasing. So if you have a spending problem ditching cards may in fact help curb your impulse. It should be noted most studies have not found a difference between debit or credit cards. On a side note studies have also found that people will on average spend more online in one shop than they do in a bricks and mortar shop and the results are consistant even if the bricks and mortar shopping is done with a card. So if you really want to curb your impulses don't shop online😆.

[AlanF65]

25 minutes ago, ilikeanswers said:

 

There are actually numerous studies that have demonstrated that people are more likely to make a friviolus purchase using either debit or credit card whereas if asked to hand over cash it seems to make people stop, think and reconsider purchasing. So if you have a spending problem ditching cards may in fact help curb your impulse. It should be noted most studies have not found a difference between debit or credit cards. On a side note studies have also found that people will on average spend more online in one shop than they do in a bricks and mortar shop and the results are consistant even if the bricks and mortar shopping is done with a card. So if you really want to curb your impulses don't shop online😆.

Or have more discretionary income 😎, my frivolous purchases are in my budget.

 

[Stateroom_Sailor]

22 minutes ago, ilikeanswers said:

It should be noted most studies have not found a difference between debit or credit cards.

 

Thanks for clarifying.  Dave Ramsey may be stretching the truth, promoting the debit card as the answer then.

[AlanF65]

2 hours ago, Stateroom_Sailor said:

 

Thanks for clarifying.  Dave Ramsey may be stretching the truth, promoting the debit card as the answer then.

Well you can spend money you don't have on a credit card, you can't on a debit card

[ilikeanswers]

3 hours ago, Stateroom_Sailor said:

 

Thanks for clarifying.  Dave Ramsey may be stretching the truth, promoting the debit card as the answer then.

 

To be fair there were some studies that displayed a slight difference between credit and debit buying behaviour so I would presume this is where your Ramsey person is getting his conclusions. However since those results could not be replicated consistantly in repeat experiments one has to conclude that debit and credit has little influence in how someone will spend their money. It seems to be the use of the cards themselves that makes people willing to spend more as the consistant result was when particpants were given cash they really did reduce their spending. It has been suggested that seeing your money disappearing makes people think twice about handing it over especially if it is for something unnecessary😋.

Edited February 5, 2020 by ilikeanswers

[pacruise804]

14 hours ago, Toofarfromthesea said:

 

Then he shouldn't sell it as blanket advice.  And I'd have to review the 'spend more with credit cards' studies myself, because most studies that get reported in the popular press are dreck to anyone with a statistical background.  But hey, it made him a millionaire.

 

While his financial advice has certainly contributed to his wealth, I think most of it is still in real estate (the same way he made it the first time).

 

My father often shared a quote "figures don't lie but liars will figure."  I agree that many statistics while factual, don't necessarily mean much. 

[ducklite]

17 hours ago, Stateroom_Sailor said:

I believe the most valid point Dave Ramsey makes against credit cards, is the behavior studies showing an increased spending over using cash.  He often cites an 11% increase at the grocery store using credit.  He and likely most of his followers, use a debit card, which would fall somewhere in the middle of the cash vs credit card spend.  If I'm overspending 6% over a debit card, and get 6% back on the card, it is still more of a wash.  Sometimes it is a good idea to look at your shopping cart, imagine pulling out $20 or $100 bills, and putting something back on the shelf.

I don't look at prices when I shop.  I buy what I need to and the brands we prefer.  I never use my debit card for purchases.  Ever.  

 

I do use coupons and in some cases buy the store brand over the name brand because I like it better (Whole Foods 360 Organic Rice Krispies are better than any of the brand names of that item for example).  We buy very little snack food and make things like hummus and most baked goods from scratch, and don't drink soda or energy drinks, etc. so there's very little impulse buying. Maybe an extra couple of oranges because they look fantastic or a new flavor of yogurt that I want to try.  If I have $5-6 in impulse buys on each shopping trip, it's a lot.

[Toofarfromthesea]

On 2/4/2020 at 4:43 PM, ilikeanswers said:

 

There are actually numerous studies that have demonstrated that people are more likely to make a friviolus purchase using either debit or credit card whereas if asked to hand over cash it seems to make people stop, think and reconsider purchasing. So if you have a spending problem ditching cards may in fact help curb your impulse. It should be noted most studies have not found a difference between debit or credit cards. On a side note studies have also found that people will on average spend more online in one shop than they do in a bricks and mortar shop and the results are consistant even if the bricks and mortar shopping is done with a card. So if you really want to curb your impulses don't shop online😆.

 

Have you actually LOOKED at those studies?  This discussion caused me to go look at the ones cited most often.  They involve an abstract made up situation.  There is nothing in those studies that is based on the actual spending by actual people. 

 

And to the extent that the claim has any validity whatsoever, I strongly suspect there is a large overlap between people who spend more on a card than they would have with cash and people who do not pay their card off in its entirety every month.  I doubt that very many people who are paying their full balance every month are spending more profligatively than they would with cash.

[ilikeanswers]

1 hour ago, Toofarfromthesea said:

 

Have you actually LOOKED at those studies?  This discussion caused me to go look at the ones cited most often.  They involve an abstract made up situation.  There is nothing in those studies that is based on the actual spending by actual people. 

 

And to the extent that the claim has any validity whatsoever, I strongly suspect there is a large overlap between people who spend more on a card than they would have with cash and people who do not pay their card off in its entirety every month.  I doubt that very many people who are paying their full balance every month are spending more profligatively than they would with cash.

 

I don't know if asking people to pretend to shop is that abstract but the studies seem to be backed by findings from various retail associations that say spending per person went up after their members introduced card payment systems. At the end of the day no one is saying you will go into debt just that your spending might be a little bit more and really it is only a little bit. The average increase of spending was about 10 -20% more so unless you are really strapped for funds I doubt it is make or break for most people

[ducklite]

8 hours ago, Toofarfromthesea said:

 

Have you actually LOOKED at those studies?  This discussion caused me to go look at the ones cited most often.  They involve an abstract made up situation.  There is nothing in those studies that is based on the actual spending by actual people. 

 

And to the extent that the claim has any validity whatsoever, I strongly suspect there is a large overlap between people who spend more on a card than they would have with cash and people who do not pay their card off in its entirety every month.  I doubt that very many people who are paying their full balance every month are spending more profligatively than they would with cash.

I completely agree.  If you took away my cards I'd spend the same, but be a lot more annoyed about having to write more checks and use the ATM more often.  And let's not even get going on the perks I'd lose like free lounge access, free Uber rides, and the points that I can use for plane tickets and such.

[ducklite]

7 hours ago, ilikeanswers said:

 

I don't know if asking people to pretend to shop is that abstract but the studies seem to be backed by findings from various retail associations that say spending per person went up after their members introduced card payment systems. At the end of the day no one is saying you will go into debt just that your spending might be a little bit more and really it is only a little bit. The average increase of spending was about 10 -20% more so unless you are really strapped for funds I doubt it is make or break for most people

Spending went up because people who previously wouldn't shop there due to the inconvenience now do.   If WaWa suddenly stopped taking credit cards, I'd shift my business to RaceTrac, even though I prefer WaWa.

[AlanF65]

10 hours ago, ilikeanswers said:

I don't know if asking people to pretend to shop is that abstract but the studies seem to be backed by findings from various retail associations that say spending per person went up after their members introduced card payment systems.

That is fundamental to retail sales, never let payment get in the way of making  sales, the more payment options you offer the more chances you have of making a sale.  I agree that the abstract studies are theoretical, the only way to get accurate data is to survey after the purchase.

 

It used to be that end caps, tables in aisles and merchandise near registers were impulse sales or items the retailer was promoting along with where times are located on shelves. New technology in brick and mortar is learning that maybe the dad stops to buy the dog food so place items dad may buy near the dog food for an impulse sale, and maybe put  some tooth brushes near the small pet food so mom can get a tooth brush while getting pet food. Retailers are trying to move what online retailers have learned about buyers into stores. Its a much more complex problem which is why tracking you and social media apps are so valuable to retailers.

 

60 years ago when my mom took the ad to the grocery store they had general statistics on random buyers, now they know what you buy if you are part of any affinity program and they are learning where to place the merchandise for the frivolous sale.

 

Unlike walking into the cruise ship store where most of it is targeted impulse buys

 

 

 

 

[Toofarfromthesea]

5 hours ago, ducklite said:

Spending went up because people who previously wouldn't shop there due to the inconvenience now do.   If WaWa suddenly stopped taking credit cards, I'd shift my business to RaceTrac, even though I prefer WaWa.

 

Of course.  This is the problem with these kinds of studies, it is difficult to isolate things - but isolating the studied behavior is the hallmark of correct design.  I haven't found a study that even TRIES to do this in the cash/credit card arena.

[ilikeanswers]

6 hours ago, AlanF65 said:

That is fundamental to retail sales, never let payment get in the way of making  sales, the more payment options you offer the more chances you have of making a sale.  I agree that the abstract studies are theoretical, the only way to get accurate data is to survey after the purchase.

 

It used to be that end caps, tables in aisles and merchandise near registers were impulse sales or items the retailer was promoting along with where times are located on shelves. New technology in brick and mortar is learning that maybe the dad stops to buy the dog food so place items dad may buy near the dog food for an impulse sale, and maybe put  some tooth brushes near the small pet food so mom can get a tooth brush while getting pet food. Retailers are trying to move what online retailers have learned about buyers into stores. Its a much more complex problem which is why tracking you and social media apps are so valuable to retailers.

 

60 years ago when my mom took the ad to the grocery store they had general statistics on random buyers, now they know what you buy if you are part of any affinity program and they are learning where to place the merchandise for the frivolous sale.

 

Unlike walking into the cruise ship store where most of it is targeted impulse buys

 

There was one study I remember a retailer friend had been given from her association where they looked at shops that made no other changes but added card payment and it seems to line up with everything else. But definetly online shopping they say it is the targeted marketing that boosts sales. 

[RocketMan275]

18 hours ago, Toofarfromthesea said:

 

And to the extent that the claim has any validity whatsoever, I strongly suspect there is a large overlap between people who spend more on a card than they would have with cash and people who do not pay their card off in its entirety every month.  I doubt that very many people who are paying their full balance every month are spending more profligatively than they would with cash.

I've taken the Ramsey class and I've taught it as well.  Dave used to be on talk radio in this area so I've listened to many of his broadcasts.  What is important is Dave's target audience.  These people do not pay off the balance, they pay the minimum due.  A common caller goes like this: "we have 5 credit cards and all are maxed out.  We have an SUV and a pickup, both on lease.  Two years we took out a home equity load to pay off the credit cards and now we have a loan there and the credit cards are maxed out again."

 

If, many on this thread, you can get a Chase Sapphire Reserve Card, you're not in Dave's target audience.  Still, taking his class is worthwhile because he teaches a lot of stuff on basic budgeting and beginning investing (mutal funds).  This class fills a void in our formal education programs that don't cover basic financial issues like compound interest.  

 

One of Dave's most important points is this: both spouses need to be involved in managing the finances.  Family financial meetings are a must if budgeting is to work.  Yes, Dave is big on budgets.  We did our first family budget during his class and a budget is the cornerstone of financial success.  Having a workable budget is far more important than credit v. debit cards.

[AlanF65]

5 hours ago, Toofarfromthesea said:

 

Of course.  This is the problem with these kinds of studies, it is difficult to isolate things - but isolating the studied behavior is the hallmark of correct design.  I haven't found a study that even TRIES to do this in the cash/credit card arena.

The social media apps track you and know if you are in a grocery store, they have the ability to send you a coupon for xyz product at a discount while you are in the store. The minute detail they get from likes and mentions along with searches and purchases puts today's shopper at a massive disadvantage. Online retailers prices change based on inventory, demand and what link got you there.