Would you buy a expensive knife on credit?

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John_0917

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This post sounds like a troll or someone destined for a 520 and 32% APR rates.

Btw, using over about 1/3 of your revolving lines starts to lower your score, over 1/2 lowers it significantly. The best way to build a good score is to successfully use credit. This means to borrow, and then pay back ie prove yourself over years.
 

John_0917

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Well, I think paying cash for things and being debt free is the best way to go. Even houses.

Interest paid to banks is just lost opportunity for more knives (or cars, or whatever). When we paid of the mortgage to the house, that was a good feeling, banks don’t own you, you are free at that point.

I work a good job and live in Texas so paying off my house in my 30’s was doable. If you live in a high tax state, move.

You’re (possibly) missing out on a deduction for mortgage interest. Also our property taxes here are INSANE.
 
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Well I kind of did. I said to The Chef if I spend $200 plus on this Para 2 with M4 blade it can be my Christmas present for the next two Christmases.
Still won't part with it ! ! ! !
 

cchu518

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I do it all the time, use credit it that is. I don't think I would spend anything more than around $1,100 max on a knife. I don't know if I could get myself to use any knife that cost more than $600.
 

SOLEIL

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We are debt free also. We still use credit cards but pay them off in full, never pay any interest on the cards. Our rating is in the low 800's.
 
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Needler I hope you didnt check your credit via credit karma--I do work for a lot of big dealerships and was told credit karma is always about 100 pts high when compared to a real crediit score.
 

Andy the Aussie

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1 - don't get financial advice off internet forums
2 - don't finance hobbies

This is probably the best advice here... ;)

My only bad debt (there is good and bad debt - bad is when you essentially (this is a very very simplistic explanation) can't claim any of the interest you pay as a tax deduction), is my home mortgage but that is a necessary evil living in Sydney (but I at least started off years before the property boom here). I run an offset account on the mortgage so every $ in that account is considered (for the purpose of daily interest calculations on the mortgage) to be balance paid from the loan principle, both our salaries are paid into the offset account, so in effect I/we earn the loan interest rate on it and not the 1.5 or so % I/we would in a bank account, we also accrue no tax liability on that "earning". Every other bill we pay, items we buy etc etc is on linked credit cards, and the balance of those cards is paid off in full prior to it being subject of ANY interest (I get a boat load of FF points as well) !!! If you can't pay for a toy without interest, you should not be buying the toy in the first place (motor vehicles are about the only exception to this rule for me - but I actually lease my car as a salary sacrifice from my employer) ....also think long and hard about that $10k balance, it will creep up quickly if you allow it and then, are you able to service the debt at a 15-20% interest rate back dated to the first purchase you made ? Financial Institutions are NOT your friend, you are their source of income and they WILL bleed you dry if at all possible...!!
 
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Work some overtime and save up the money. If you can’t pay for a $300 knife, you shouldn’t be buying one. Forget using credit cards. It is too easy to go wild with them. My 2 cents
 
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Amazingly, it doesn't look like anyone's asked the important question, yet:

What's the knife you're looking to buy??

If he uses his credit card to buy Cold Steel products, then I will have no sympathy if it ruins his credit score.
 

Mitchell Knives

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If you need to put a $300 knife on your credit card and make payments (even if interest free), you can't afford it.

In this case, I'd build up a reserve fund for emergencies before I bought any more knives.

Credit cards should be paid in full at the end of each month. At best consider it a way to defer payment for 30 days.
 
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I would for the points, as that is the only reason I use a CC. I always clear my debt every month.

If you're paying interest then you're not making a wise decision. That's not just for knives, it's for all purchases. As a rule I don't spend what I don't have.

A mortgage is the only exclusion to my rule, cuz I dont have 'that much'.
 

jbmonkey

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I'll pass on what my old man taught me about credit cards.

if ya dont have the cash in your pocket to pay for it....ya cant afford it.

it's over simplified but I needed that as youngster. kept me out of big financial trouble most of my years. good luck.....
 

Busto

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Take a $50,000.00 loan and put it into a high dividend money market fund use the dividends to pay the interest ONLY never pay back the principle they are only concerned about Their Interest.....Just like a loan shark Only cares about the "Vig".
 
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You’re (possibly) missing out on a deduction for mortgage interest. Also our property taxes here are INSANE.

So for every $10,000 in mortgage interest paid he could save what? Maybe $2,500 in taxes? Pay $10,000 to get $2,500, that makes a lot of sense.:( Or since he has no mortgage he could pay $2,500 more taxes and keep the $7,500.:)

O.B
 
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So for every $10,000 in mortgage interest paid he could save what? Maybe $2,500 in taxes? Pay $10,000 to get $2,500, that makes a lot of sense.:( Or since he has no mortgage he could pay $2,500 more taxes and keep the $7,500.:)

O.B
Another part of the equation you’re forgetting is investing the money instead of paying down a mortgage or buying the house with cash in the first place.

Our mortgage is 2.65% plus I can deduct the interest on our taxes. If I pay the house in cash or make extra payments, I save 2.65%.

If I invest the money in moderate to high risk investments, I can make way more return than I’m paying out. Pay off the house and I make 2.65%. Invest the money elsewhere and I’ve made up to 34% return some years with an average of about 6-8%. This far outpaces the interest I’m paying out. Been doing this for years and I’m way ahead by being in debt.

Debt isn’t bad if you’re disciplined and you leave emotional decisions out of the equation. Pay off all high interest debt like credit cards in full every month. Never pay off low interest loans early (house: 2.65% car: 0.9%) when you can put the money into higher yielding investments instead.

Most important is to invest as much as you can into retirement accounts or business ventures that will hopefully allow you to retire securely. Don’t buy a knife on credit if you’re not putting money away into retirement accounts first. We squirrel 28% of gross income into investments and live well below our pay grade.

If you can’t pay off the knife by the next credit card bill and you aren’t saving at least 10-15% of your income for retirement, then you can’t afford the knife. If you don’t have 6 months worth of monthly bill payments set aside in a “rainy day” fund/bank account, then you can’t afford the knife.
 
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