24 responses

  1. 101 Centavos
    January 3, 2011

    I must be one heck of a deadbeat. Totaling up the interest at the end of the bill is at first depressing, and then motivating, or at least it should be.
    That’s a good photograph, by the way.

  2. Everyday Tips
    January 3, 2011

    Yikes, the thought of having 15k in credit card debt makes my heart race. I learned the no-credit-card-debt when I was 23 and out of grad school. I put some of my schooling on a credit card and I paid that off as quick as I could. I never paid another dime in credit card interest after that.

    The only thing about the Dave Ramsey thing is that I would want to pay the higher rate debt first, even if it is bigger. I understand the thought of having small victories, but I hate throwing money down the drain.

  3. The Biz of Life
    January 3, 2011

    If I can’t pay it off in full every month I don’t buy it, no matter how I may covet something. For those who have let their debt get out of control, by all means pay off the highest interest rate first.

  4. MoneyCone
    January 3, 2011

    @Kris@ET: That is awesome! If you have the discipline to pay off your debts, paying off the debts with higher interest is even better – you get more to keep!

    @101: Great going, deadbeat! ;-)

    @Biz of life: ‘If I can’t pay it off in full every month I don’t buy it’ – commend your motto!

  5. Darla
    January 3, 2011

    I think I’m such a dead beat I probably fly right under the radar. No debt. None. Own my home and my car. They aren’t new but they are MINE. I pay my utilities, buty groceries, put a bit in saving and am free to do what I want with what is left.

    It can be done.

    Darla

  6. moneycone
    January 3, 2011

    @Darla: That is very commendable! Being debt-free starts with a mindset and then becomes a habit.

    Thanks for sharing.

  7. Suba @ Wealth Informatics
    January 3, 2011

    We are great dead beats too! For anything more than $150, we actually have a separate sub account, save for it and then buy. 15k in CC debt would make me work day and night to pay it off, never had any CC debt luckily.

    Great pic btw :)

  8. Money Reasons
    January 3, 2011

    Oh I’m much more than a deadbeat (I wonder if the credit card companies really use this term).

    I only use reward cards and I always make sure I pay them off each and every month!

    If you always pay your credit cards off each month, and you don’t use a rewards credit card, you are throwing money away (at least in my opinion).

    If you don’t pay off your balance each and every month, don’t go for a rewards card, they usually have a high interest percentage that they charge!

  9. Squirrelers
    January 3, 2011

    If they consider a person like me to be a deadbeat, then so be it! Not a fan of carrying credit card debt at all, or really any debt for that matter. Would be great to have a paid off home, though that’s not happening anytime soon by any means. No car loan, though.

    Three cheers for Deadbeats!

  10. MoneyCone
    January 4, 2011

    @Suba: Having sub accounts is an excellent way to manage and plan for bit ticket items without falling into the credit card trap!

    Luck had everything to do with you not having cc debt. Prudent folks are always lucky! :-)

    @Money Reasons: Paying off the entire balance every month is the only way you can ‘win’ this game!

    The credit card industry actually uses this term to refer to customers that pay off their balance in full.

    Think about it. When you pay off your balance in full, you are getting an interest-free short term loan with no collateral. Most of the 2% or so the credit card company gets from the merchant from your purchase too is passed on to you as rewards and other perks! No wonder they use this term!

    @squirrelers: Having an auto or home loan is unavoidable – there is no excuse for CC loans. You’ve managed to pay off your auto loans and don’t keep a cc balance. That is awesome!

  11. Invest It Wisely
    January 4, 2011

    Knowing the true cost of those credit card payments, it’s just not something I’d be willing to do. Either pay it off before paying interest, or pay less interest than the money you saved, at the very least!!!

  12. Kellen
    January 4, 2011

    14%? My credit cards are more like 19%! Not that I’ve ever paid interest on any of them. Interest rate is something I didn’t even pay attention to when I applied for my rewards card, because I don’t plan on ever paying that interest!

  13. retirebyforty
    January 4, 2011

    I wouldn’t give auto an exception either. That’s a bad financial deal to make. Pay CASH!! :)

  14. Money Reasons
    January 4, 2011

    Yay for me, being a deadbeat is great (I never thought I’d say that)!

    That (Don’t be shy!) prompt on the Comment Form is great!!! I never noticed it before :)

  15. Moneycone
    January 4, 2011

    @Invest It Wisely: Very true! Pay in full and enjoy the perks!

    @Kellen: Same here! Only gotcha I look for in a rewards card is if it has any annual fees – some are sneaky, no annual fees the first year but will charge you for the subsequent terms.

    @RB40: Paying cash for auto may not be feasible if you are a student or if you are in your first job and you need an auto to get to work. But if you can pay cash, of course, you should! I’m assuming you did and that is terrific! (My first car I did take a loan, all subsequent ones I paid cash)

    @MoneyReasons: You sir, are very observant and obviously not shy! :-)

  16. Aloysa
    January 4, 2011

    We used to have 15K in c/c debt. It takes a lot of effort and sacrifices to pay it down. We are not debt free but we are working on it. I promised myself that I never again will get into c/c debt. Whatever it takes… And it does take a lot. Great post!

  17. DIY Investor
    January 5, 2011

    Looks like you’re preaching to the choir. Obviously there are a lot of people who need this message but are they getting it?. I wonder how many commenters credit their parents for their frugal ways. I want to take credit (no pun intended) for my kids being deadbeats!

  18. MoneyCone
    January 5, 2011

    @Aloysa: As long as you consciously manage your debt, you should be fine. All of us have had our share of rough patches. Hang in there, I’m sure you guys will come out just fine!

    @DIY: Good point! I would totally credit my parents for my debt-free ways! Would be interesting to find out how many decided to be debt-free without parental influence! They would be the true heroes!

  19. BeatingTheIndex
    January 5, 2011

    Buy it on CC only if you can pay it in full without interest. Lots of people out there need to have this message drilled into their thick skulls! Thanks for doing your part of the drilling ;)

  20. Buck
    January 5, 2011

    Great article and picture, too! The numbers are mind boggling, 15K in CC debt. No wonder we all almost bit the dust a few years back. Sheesh, people, control your finances! Nice example of the tv ballooning to 8000 bucks. We need more of those in your face examples to get through thick skulls. Deadbeats Rule! :)

  21. Jessica07
    January 5, 2011

    Wow. Look at all the comments! LOL. Looks like you hit on a good topic! :)

    As for me, I think credit is only good if used towards something that could possibly increase in value. That way you offset some of the interest being gained. My other rule of thumb is always to pay three times the minimum due to, again, offset the interest. For the most part, though, I won’t put it on credit unless I know I can pay it off by the end of the next month. I worked too hard to get out of debt–interest frightens my delicate sensibilities! :)

  22. LifeAndMyFinances
    January 5, 2011

    Great example with the T.V. and credit card interest. Sometimes we don’t realize how much we are actually paying for a particular item because we only see the expenses in small payments.

    I think this was a good wake-up call for many.

  23. First Gen American
    January 10, 2011

    I guess I’m a deadbeat as I don’t carry credit card debt, or car debt and I soon hope to not carry mortgage debt either.

    I like your TV example because we didn’t buy a new TV until last year (when the CRT finally died). Well, our big plasma TV was $900 and I remember when they were over $5000. There is definitely a benefit to not being an early adopter when it comes to technology.

  24. Moneycone
    January 10, 2011

    @First Gen American: Oh definitely! For me, the iPad can wait! :)

    @LifeAndMyFinances: Thanks! I cringe every time I hear ‘one low monthly payment’!

    @Jessica: You are obviously smart and a deadbeat!

    @Buck: Deadbeats rule! :)

    @BeatingTheIndex: Couldn’t agree with you more!

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