Credit cards

[Aaron]

well currently I don't have a CC, but whenever I get a fulltime job, I might get one.  Which one has the best deal and doesn't screw you majorly?  Is the Capital One card all its cracked out to be?

[Vlad!]

If you plan on paying your balance each month, you can get one with a high percentage but that has other perks. I don't have one myself, but some of the extra features can be spiffy.

[worldofcm]

When I had my 3 credit cards, the best one, IMHO, was Capitol One.  However, MNBA (I think that's what it was) was a nice card as well.

They screwed up my credit too much that I wouldn't touch one with a four foot pole.  Basically I was too young and too immature to get one when I did, let alone three.

[dgp11776]

I recommend MBNA's Platinum Plus card.  There is no annual fee, and you get reward points (1 pt. per dollar spent) that you can redeem for flights, cash, and other stuff.  I pay my balance off every month, so I don't know what the rate is.

[Josh]

FYI, Dave Ramsey, the uber-popular author/talk show host/financial guru, has said that his #1 piece of advice to people when it comes to their finances is to NEVER get a credit card.

But, in this day and age, that's pretty dadgum hard to do.

[dgp11776]

FYI, Dave Ramsey, the uber-popular author/talk show host/financial guru, has said that his #1 piece of advice to people when it comes to their finances is to NEVER get a credit card.

But, in this day and age, that's pretty dadgum hard to do.

And then there's Larry Burkett, who discourages being in debt at all.  So, let me get this straight.  I should rent a house/apartment until such time I have saved enough money to buy a house with cash?  Eeee-haw, Eeee-haw (that's a donkey noise).

[Vlad!]

It's a good plan if it's feasible. Saying 'never get in debt' is one thing, but discouraging all debt is another. After all, most Americans don't have problems with NOT buying a house, car, or whatever because they don't have the money. Most Americans have problems with going ahead and buying them even though they'll be paying for it for the rest of their natural lives, and possibly beyond.

Obviously if (cost of renting a house per month) * (number of months you will have to rent before you can buy a house with cash up front) is greater than (loan principal) + ((monthly interest) * (number of months before you can pay off the loan)) then it would make financial sense to go ahead and get that loan.  

[dgp11776]

I think renting a home almost (notice I said almost) never makes sense.  Let's say you pay $850-900 a month to rent a standard, 1500 square foot home that costs, say, $135,000 (I know a guy that buys homes & rents them out, and he gave me those figures).  For your monthly rental payment, you get a roof over your head, and that's it.  Now, if you took out a loan for $135,000 over 30 years at the current mortgage rate of roughly 6%, your monthly payment would be $809 plus insurance, PMI, and property taxes.  Around here, that would take you up to about $960 per month.  In one year, you will pay off interest of probably $8,000 and property taxes of about $1,200.  That $9,200 is tax deductible.  In addition, you build equity as you go along.

Sorry, got carried away.

[Vlad!]

I would agree that renting a home is not usually the way to go. When I said 'renting a house' I also included apartments and townhomes under the broad definition of house.

And it also depends on where you live. The answer for someone in New York will be different than someone in Smalltown, USA.  

[Vlad! The Guest]

By the way:

Here is an interesting article that recommends buying over renting pretty much any time you plan on staying in an area for very long. I personally don't want to go to the trouble of finding a house, fixing it up, and doing all that work (plus getting myself very deeply in debt) just to get out of paying our rent each month, but it is a fairly compelling thought in principle.

[oneafroboy]

When you buy a house, though, you're also making an investment. So buying a house and having a mortgage, especially one that you pay off a good while before you're dead, makes a lot of sense.

 

[GusX:]

Renting a house is cool if your rent and utilities  are low because you live with a bunch of friends or whatever..   but as soon as possible purcahse a home  because it is an investment  , if taken care of, that is very solid.  Even if you were to buy a home and rent out the basement.. or the upstairs.. or whatever  to university students [ females are best I'm told...]     You essentialy could have them pay the house off for you...     Anyway.. as mutch as my car takes up my finances [ its a hobby making it go faster ... lol expensive at that]   I still wish to purchase a home as soon as possible..   doesn't have to be mutch just enough that I can sell it for more than I purchased it..

Allways get your home inspected before you buy..   I know of people who bought a home and during  extensive remodling / renovating  found a dead body... !!!!

       
Freaking   CRAZY..  

[Vlad!]

Allways get your home inspected before you buy..   I know of people who bought a home and during  extensive remodling / renovating  found a dead body... !!!!
 

I hate it when that happens.

Buying a house is making an investment, but it's one of the least liquid investments you can own, especially if you plan on living in it. And there are a lot of headaches to being a homeowner--insects, water damage, flooding, fallen trees, yard maintenance, plumbing, the list goes on. As a university student, I don't have the time to deal with these things. Plus, if you decide to rent a portion of your house, you have to deal with the renters and their potential lack of respect towards your property, the damage they can do, etc.

Buying a house is not just money down the drain the way, in many respects, an apartment is. But it's also a major investment. When I was looking for a place to live here in Blacksburg, I considered asking my roommate if we wanted to look for a cheap house instead of an apartment. But we would have to make sure we got it in time to move in for the next semester, we would have to find a way to get to classes (houses aren't usually near the bus lines), and we would have to deal with the plumbing if it backed up, the yard (knowing us, we just would never mow and it would be waist-high by the time someone thought to do something about it), these hurricanes maybe blowing tree branches--or trees--onto the roof, the list goes on.

However, it is a good point. If there is anything worth going into debt for, it is a house. A car, mmm, maybe if you just don't have the money to buy even a cheap but reliable model from a few years ago, but taking a loan to buy a new car that will depreciate hugely almost immediately doesn't make much sense to me.