The Theory and Implementation Of Float and the Value of Credit Card Use

Editor’s Note: This column is designed to provide food for thought and should not used to replace financial advice from a qualified expert. Colorado Citizen Press Does Not offer financial advice.

The Concept of Float

A basic definition of Float is making a purchase first, and have the expense later.

In an Economic class I attended at Colorado State University (CSU) in the 70s, float was discussed as the time it takes for a check written to a merchant to actually hit your checking account.

I know very few people that write checks anymore, but the theory of float still works with credit cards.

Using most credit cards allows you a float time with no interest to pay for a purchase, usually 30 days from the statement date.

Unfortunately, nearly half of millennials do not use credit cards like this. (According to George Washington University)

What are they doing wrong?

Nearly half of millennials only pay the minimum payments on their credit cards.

Yet, from the same study, 74% claim they are good at dealing with day to day financial matters.

Using credit cards with float in mind should mean that you have a mindset and the ability to pay that charge off when due or you need to find a way to defer or delay the credit card interest.

Credit-Cards

The Value Of Credit Card Use

Using credit responsibly can have a positive affect on your credit score. This can open the doors for low interest loans and favorable credit decisions in the future.

Many credit cards offer cash back options or other perks like airline miles or discounts at hotels.

Fraudulent charges on your credit cards, if disputed in a reasonable time, usually will result in no financial obligation to the real card holder.

Some credit cards offer free extended warranties with a purchase with their card.

Some cards will allow you to have deferred or delayed interest on major purchases.

With most credit cards you can now track your purchases online.

In Conclusion

Credit card use can be clean, convenient and safe.

However, if not controlled it can wreck havoc on your financial situation.

Once you get to the point where you can pay off your balances every month, or even just pay the minimum due on time to a deferred or delayed billing charge, don’t look back.

It should become an obsession with you.

Pay off most cards and find one that pays you back with something you like, either cash or some kind of reward, and one that you feel comfortable with.

Bottom Line Boomer has lived in Colorado for 40 years and has been a lifelong student of personal finance. His goal is to help provide a much needed education on personal finance for today’s world.

Never Forget

Slap on the sunscreen and fire up the grill, but let’s not forget what we’re celebrating on July 4th.

241 years ago, less than 3% of our Nation’s men mobilized to take on tyranny, by declaring independence from Great Britain .

The great pain of war would follow, but for these men, and hopefully for you me, the fight to preserve our Natural rights of life, liberty, and property was worth the sacrifice.

It is believed for every twenty able men serving in the war, one lost his life.

Look at what these great men of liberty had to say during that time period:

The preservation of the sacred fire of liberty, and the destiny of the Republican model of Government, are justly considered as deeply, perhaps as finally staked, on the experiment entrusted to the hands of the American people.– George Washington 

My God! How little do my countrymen know what precious blessings they are in possession of, and which no other people on earth enjoy!  – Thomas Jefferson

The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government. – Thomas Jefferson

The question is, not what rights naturally belong to man, but how they may be most equally and effectually guarded in society. – Roger Sherman

So, today as we hang out with family and friends gazing upon the fireworks lighting up the sky, let us use that moment to remember how blessed we are to live in this great land of liberty we call the United States of America.

Then tomorrow let’s get back to work because as Thomas Paine said, “Those who expect to reap the blessings of freedom, must, like men, undergo the fatigue of supporting it.

Happy Independence Day from the team at Colorado Citizen Press.

Future

Masterpiece Cakeshop’s Case to be Heard in Supreme Court

How about some good news?

As you may know, Jack Phillips, the owner of Masterpiece Cakeshop has been standing strong on his belief in traditional marriage.

And his perseverance is paying off. Denver 7 reports:

Masterpiece Cakeshop owner says he’s lost 40% of business, welcomes SCOTUS hearing

by: Blair Miller

DENVER – The owner of the Masterpiece Cakeshop, whose case involving his denial to make a cake for a gay couple was taken up by the U.S. Supreme Court Monday after being declined nearly a dozen times, says the lower court’s decision, which will now be argued in front of the nation’s highest court, has caused him to lose business and that he’s received threats.

Jack Phillips spoke with his attorneys from the Alliance Defending Freedom, a conservative group that took up his case, after the Supreme Court decided it would hear oral arguments in his case sometime later this year.

In a prepared statement, Phillips said that after 23 years of being open, the shop is losing business after the Colorado Supreme Court last August declined to review the case, agreeing with a Colorado Court of Appeals decision that said the shop could continue to enforce its religious beliefs, but not while operating as a business in Colorado.

Read the rest of Denver Channel’s article here.

The Greatest Pyramid Scheme of all Time?

An Investment that doesn’t always pay

College can be an excellent investment that propels graduates into high powered careers. Plenty of my colleagues finished their undergrad degrees with starting salaries similar to a tenured professor’s pay. The old promise of a better, financially secure life for college graduates is still true for engineers. The same cannot be said for the liberal arts. Today, liberal arts education is functionally identical to a pyramid scam!

A Pyramid Scam?

Pyramid scams work by requiring new recruits to pay a membership fee to their recruiters. If the recruit then manages to sign up enough new recruits, the recruit is promoted and gets a share of the membership fees. Recruits who fail to generate enough new recruits get nothing. Some variants of pyramid scams involve a token transfer or goods or services to disguise the nature of the scam. Participation trophy degrees are the token service that covers up the liberal arts pyramid scam.

The availability of meaningful career opportunities outside of academia distinguishes legitimate education from pyramid scams. For example, the average engineering graduate has little to no trouble finding meaningful employment. There are numerous employers ranging from defense contractors to the oil giants and equipment suppliers. While engineers thankfully can and do take teaching jobs, this is not necessary to an engineering career or even the highest paying career option. The service provided by engineering education has legitimate value outside of training more engineers.

In contrast, history and literature majors have far fewer options for employment in their field. On average, they could work as librarians, high school teachers and similar low prestige jobs. The pinnacle of a liberal arts career is to be a tenured liberal arts professor. But there are far more liberal arts majors than liberal arts jobs at all levels. This makes the top of the field dependent on the tuition of new recruits and extremely competitive. In simple terms, the best positions in the field are funded by the recruitment of excess members who have a near zero odds of attaining a good position in their field. This is the basic structure of a pyramid scam.

What’s the value?

But what about the transferrable value of an education? In the days before participation trophy degrees, a good liberal arts education was valuable. It taught critical thinking, provided a rigorous academic background, and signaled that graduates were both smart and motivated. Grade inflation and the gutting of academic standards mean that most liberal arts degrees provide very little value now. Many liberal arts graduates are in jobs that do not realistically require any degree. The return on investment for liberal arts degree is declining with some programs going negative!

Liberal arts education is effectively a debt driven pyramid scam. It provides extremely limited utility to the average graduate from the average university. The skills are non-transferrable and participation trophies from all but the most prestigious schools have limited signaling value. The pinnacle of a liberal arts career is the tenured professor. The continued employment of the liberal arts faculty requires them to recruit far more students than will ever be employed in the field. A lucky and morally suspect few become liberal arts professors. The vast majority end up with nothing tangible to speak of besides student debt that cannot be discharged in bankruptcy. The liberal arts pyramid scam trades the future wellbeing of innocent students for the decadent and privileged lifestyle of its increasingly useless faculty.

The Deplorable Doctoral Candidate is an engineer, climate skeptic, entrepreneur, critic of academia, and occasional blogger. You can follow him on Twitter: https://twitter.com/DepPhDcandidate