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This is my take too. A $10,000 purchase on 0% interest for a year earns you ~$400 in interesting from a money market fund or whatever. I'm in a high tax bracket
by UncleMeat 4y ago
This is my take too. A $10,000 purchase on 0% interest for a year earns you ~$400 in interesting from a money market fund or whatever. I'm in a high tax bracket so $160 of that goes to the government. So even for a large purchase I net $240 in a year. Hooray.
Decrease the total cost of things purchased in this manner or increase the number of different things to track (or both) and suddenly I'm paying quite a bit more in additional mental energy than I benefit in cash.
The only place where this makes sense (IMO) is when you buy a new car and can get 0% and no payments for more than a year
- jonfw 4y agoWhen you phrase it this way, it sounds very comparable in terms of return to a credit card rewards program
- UncleMeat 4y agoThe nice thing about a credit card rewards program is that it requires zero mental effort. Some people like spending more effort to do churning or whatever, but I make the same computation in that case and conclude that the extra money isn't worth my time.
- _huayra_ 4y agoPaying without a credit card is just supporting the credit card fees of those who do pay with one. The price is the same, but you often get 2 or even 3% cash back (depending on offers). Anyone financially responsible (i.e. that won't get enticed into carrying a balance by the opportunity to get cash back) is leaving money on the table by not using a credit card (with good rewards).