Sign up for store credit cards for the discount
"I think the worst advice I've heard is to have the store credit cards or the gas cards for the discounts that you can get at the register. It works if you are truly disciplined, but sadly most people are not. Any savings you get are negated by the finance charges each month. In fact you end up paying more for the money."--Miriam Caldwell, Guide to Money in Your 20's
To qualify for a mortgage, don't pay off your credit card balance
"I once overheard a co-worker say this to another co-worker: Carry a balance on your credit card to help build your credit history. If you pay it off each month, you won't be able to qualify for a mortgage down the road."--Madison DuPaix, Guide to Kids and Money
Don't pay your ex's part of the bills even if he/she doesn't
"When my ex refused to pay his ordered portion of the medical expenses, I was going to pay. I called my attorney and he told me not pay the bills because we could take him back to court and the judge would hold him in contempt until he paid.
I didn't pay, four months later we went to court, the judge found my ex in contempt of court and threw a fit and yelled at him to pay up. Long story short, the ex never paid and by the time we went to court the bills had gone into collection and now sit in the negative column of my credit report.
I paid the bills but the fact that they went to collections before being paid still shows on my credit report. In six months the last one will drop off...finally."--Cathy Meyer, Guide to Divorce Support
Make money from credit card arbitrage
"This is a common topic on many financial sites and blogs, and it promises that you can make hundreds or even a few thousand dollars a year just by taking advantage of credit card offers. Now, I will be the first to admit that this is in fact possible, but it is something only a very small percentage of the population should even consider. It involves a tremendous amount of discipline, a good credit score, and quite a bit of work. One mistake and you could find yourself in a situation where you owe interest, or worse yet, damage your credit. To me, there are plenty of other ways to go about making or saving a couple hundred bucks a year that are much easier."--Jeremy Vohwinkle, Guide to Financial Planning
Avoid credit and debt all together
"Again, there is nothing wrong with going through life paying for everything with cash and not having a credit history, but you're making your life harder than it needs to be. I can understand why people want to avoid getting into debt or into credit trouble, but to swear it off completely is going to make everything from buying a house, renting an apartment, getting insurance, or even landing a job much harder than it needs to be."--Jeremy Vohwinkle, Guide to Financial Planning
Invest your student loans
"A friend of mine in grad school had the brilliant idea of using all his student loan money to invest in high-yielding CDs, on the idea that the CD rate at the time was higher than the student loan interest rate. He timed the CDs to start maturing after graduation, so he'd have to the cash flow to repay the loans. I thought that was brilliant for about five seconds until I wondered how he was going to pay for tuition."--William Perez, Guide to U.S. Tax Planning
Pay for everything with your 0% APR credit card
"Get a card with a 0% rate on purchases. Use it for everything - even buy dinner for your friends and collect their share in cash. Deposit the money into a high yielding bank account, and pay the balance off once the 0% interest rate ends.The problem: Again, discipline is required and it's too easy to slip up. If you don't methodically save the money and reserve it for the debt, you'll just have a big debt and no cash to pay it off with. Think about how much you'd actually make from the bank interest if you pulled it off, and it's probably not worth the risk."
--Justin Pritchard, Guide to Banking/Loans
Don't save for retirement until you pay off your credit card debt
"When I first entered the working world, someone told me that I should not invest in my 401k until I paid off all my credit card debt, because I’d never get a market return greater than the interest I’m paying on my card. I think that’s bad credit advice. You should invest in a 401k regardless."--Melissa Phipps, Business/Finance Channel Editor
Pay off your mortgage instead of investing
"If you're young, it makes more sense, economically, to invest in the stock market instead of paying off your mortage. This holds doubly-true in the U.S., where the interest you pay on your mortgage is tax deductible. By doing so you're taking a long position on a stock while shorting a bond (which is what a mortgage is) and, unless you're REALLY risk averse, the return exceeds the risk you're taking.
That being said, I don't think it's for most people because of the discipline involved, not because the economics are off. A lot of people will take the money they didn't pay on their mortgage and instead of putting it in an index fund, will buy shoes. Particularly if you're like me and really like shoes."--Mike Moffatt, Guide to Economics
Pay your mortgage off sooner
"I also strongly agree with Mike (Moffatt) on not paying off your mortgage. First, you do get a tax break for the interest, and what you end up in net savings over the long haul is relatively little compared to what a good investment return could bring. Also, if the value of your home goes down, you do not benefit from "investing" in the mortgage. You will lose it during a resell, or in equity should you refinance."--Lahle Wolfe, Guide to Women in Business
