• Newsletters
  • Facebook
  • Twitter
°
Thursday, April 27, 2017
View complete forecast
News-Sentinel.com Your Town. Your Voice.

Dave Ramsey: Get rid of the cards

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.The Associated Press
Tuesday, March 21, 2017 12:01 am

Dear Dave,

We're trying to get control of our finances, and my husband wants to close all our credit cards. I want to keep one and use the bill-pay option for monthly stuff like utilities, so we can keep earning rewards points. I look at my way as a method of just re-routing the money and paying it off each month. Am I wrong in looking at it like this? — Cheryl

Dear Cheryl,

Yes, you are. Life never goes as planned. You can have all the well-reasoned and best-intentioned ideas you want, but sooner or later something will go wrong.

Why not use a debit card that has a rewards system attached? Lots of debit card programs offer the same kinds of rewards programs that credit card companies do, with one big exception — you don't have to go into debt!

Studies have shown that the vast majority of people never redeem their credit card airline miles. Other studies show that people spend more when using credit cards as opposed to cash. That extra money you spend on things you don't need is money you could have been saving and investing.

So, where's the reward? — Dave

Collections and creditors question

Dear Dave,

We were very late on one of our credit card bills, and now it has been turned over to a collection agency. The collection company has offered us three or four different payment options. Does the original creditor accept the agreement, too, if we accept one of the collection agency's options? — Anonymous

Dear Anonymous,

In most situations of this type, the collection agency owns the debt outright or they're directly representing the original creditor. It's pretty much standard operating procedure when someone has defaulted on a loan.

My advice would be to accept the deal they've offered that makes the most sense for you and your current financial situation. It'll ding your credit report, and show a settlement on the defaulted credit card, but that's not the end of the world. There's already a mark against you for it being turned over to collections.

If you want to keep things like this from happening in the future, you need to get control of your finances. Stop playing with credit cards! — Dave

“The Dave Ramsey Show” is heard by more than 8 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at DaveRamsey and on the Web at daveramsey.com.

Comments

News-Sentinel.com reserves the right to remove any content appearing on its website. Our policy will be to remove postings that constitute profanity, obscenity, libel, spam, invasion of privacy, impersonation of another, or attacks on racial, ethnic or other groups. For more information, see our user rules page.
comments powered by Disqus