# Are you debt free? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [September 14, 2017, 12:15pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312 "2017-09-14T12:15:42Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Rhiannon8404](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rhiannon8404/32/17929_2.png) [@Rhiannon8404](https://boards.straightdope.com/u/Rhiannon8404)\ **Post date:** [September 14, 2017, 6:30pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/41 "2017-09-14T18:30:59Z")
Not yet debt free, but working on it. At this point only mortgage and some credit card debt. CC should be paid off in 6 mos or so, but the mortgage will take some time. I don’t mind the mortgage so much, but the credit card is high priority. ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [September 14, 2017, 6:36pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/42 "2017-09-14T18:36:59Z")
> [@Shodan](#): > > My father’s advice - > [ul][li]Never get involved with a woman whose problems are worst than yours, and[/li][li]Never borrow money to buy a depreciating asset.[/ul][/li] The [original,](http://www.thisdayinquotes.com/2011/05/never-play-cards-with-man-called-doc.html) from Nelson Algren: > [@](#): > > Never play cards with a man called Doc. > > Never eat at a place called Mom’s. > > Never sleep with a woman whose troubles are worse than your own. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [September 14, 2017, 8:35pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/43 "2017-09-14T20:35:21Z")
Only a mortgage, and the balance is about 8% the current market value of our house, with low monthly payments. Cashback credit cards so they pay us. We could pay off the mortgage if we wished to, but our return from our investments has been better than the mortgage rate considering the tax advantages. A few people say they pay off credit card charges as soon as they are incurred. That seems odd to me. Credit cards have advantages over debit cards, and you certainly don’t want to get charged interest, but paying them off every month means the bank is giving you a 0% loan. Why turn that down? ---
**Author:** ![Velocity](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/velocity/32/18006_2.png) [@Velocity](https://boards.straightdope.com/u/Velocity)\ **Post date:** [September 14, 2017, 8:45pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/44 "2017-09-14T20:45:34Z")
Not debt-free yet, but hope to be there by the middle of next year. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [September 14, 2017, 9:01pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/45 "2017-09-14T21:01:04Z")
> [@drewder](#): > > As the title states the question is are you debt free? If not is being debt free a goal of yours? If you have debt what kinds, such as CC or mortgage? No, not debt free. We try and control our debt, but we definitely have some for the house, for cars and stuff like that. We also have some debt from some doctors bills from years ago we are still paying off. Our goal is to be relatively free of things like credit card debt by the time we retire and to ensure that regardless we are putting aside substantial money for that retirement each month. To me, that’s more important than being debt free, but MMV and all that. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [September 14, 2017, 9:15pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/46 "2017-09-14T21:15:49Z")
> [@watchwolf49](#): > > Although being debt-free may be considered the ultimate in financial responsibility … it’s not very impressive to credit issuing agencies … they make money on the interest charges so they’re only interested in folks who pay interest on time and in full … so I’m “gaming the system” by keeping a couple hundred dollar balance and making minimum payments every month I don’t think this is correct. The credit rating agencies do want to see a history of credit card debt that you’ve made on-time payments for, but I don’t think they give you bonus points for paying interest fees. If you pay the bill in full each month and don’t pay any interest you get the same score. ---
**Author:** ![beowulff](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/beowulff/32/542_2.png) [@beowulff](https://boards.straightdope.com/u/beowulff)\ **Post date:** [September 14, 2017, 9:37pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/47 "2017-09-14T21:37:05Z")
> [@Fotheringay-Phipps](#): > > I don’t think this is correct. The credit rating agencies do want to see a history of credit card debt that you’ve made on-time payments for, but I don’t think they give you bonus points for paying interest fees. If you pay the bill in full each month and don’t pay any interest you get the same score. I’ve been debt-free for around 7 years, and my credit is _almost_ perfect. Like 820 out of 850. I could probably get it to 850 by having some debts, but that would be counterproductive. ---
**Author:** ![RealityChuck](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/realitychuck/32/195_2.png) [@RealityChuck](https://boards.straightdope.com/u/RealityChuck)\ **Post date:** [September 14, 2017, 10:59pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/48 "2017-09-14T22:59:54Z")
No debt whatsoever. Paid off my mortgage over a decade ago, paid cash for my car, and pay my credit card bills in full every month. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [September 14, 2017, 11:22pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/49 "2017-09-14T23:22:33Z")
No, no debt but that isn’t necessarily a good thing. I am thinking of getting a condo, and the debt would probably be superior to renting. Other than that, the only debt I’ve ever had was student loans and I paid that off quickly. All cars have been bought with cash. I should get a credit card just to build my credit, and pay off each month though. ---
**Author:** ![jtur88](https://avatars.discourse-cdn.com/v4/letter/j/e9c0ed/32.png) [@jtur88](https://boards.straightdope.com/u/jtur88)\ **Post date:** [September 14, 2017, 11:28pm UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/50 "2017-09-14T23:28:26Z")
Yes. The last thing I bought that I did not pay for in full up front was a 1971 Datsun. Since then, every invoice I received was paid for in full before the payment due date, if not paid in cash at point of sale. However, I was a homeowner until 1986, with a mortgage that I could have paid off at any time. There is nothing more comforting than that kind of security. ---
**Author:** ![Dobbs](https://avatars.discourse-cdn.com/v4/letter/d/5f9b8f/32.png) [@Dobbs](https://boards.straightdope.com/u/Dobbs)\ **Post date:** [September 15, 2017, 12:40am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/51 "2017-09-15T00:40:31Z")
Mortgage paid off, no car payments, CCs paid off every month. It’s the only way to retire. ---
**Author:** ![Annoying\_Buzz](https://avatars.discourse-cdn.com/v4/letter/a/eb8c5e/32.png) [@Annoying\_Buzz](https://boards.straightdope.com/u/Annoying_Buzz)\ **Post date:** [September 15, 2017, 1:09am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/52 "2017-09-15T01:09:17Z")
Debt free, including mortgage, with CC automatically paid in full each month before interest accrues. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [September 15, 2017, 1:55am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/53 "2017-09-15T01:55:47Z")
> [@beowulff](#): > > I’ve been debt-free for around 7 years, and my credit is _almost_ perfect. Like 820 out of 850. I could probably get it to 850 by having some debts, but that would be counterproductive. I bet 850 is reserved for people with so much money they’d never have to borrow. My credit score is about yours, and I haven’t had a balance in over 30 years. When I bought my last car and the salesman ran the credit check, I could hear his jaw drop. He had a great loan for me, but I said, sorry, Charley, I’m paying cash. ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [September 15, 2017, 2:19am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/54 "2017-09-15T02:19:04Z")
> [@Voyager](#): > > When I bought my last car and the salesman ran the credit check, I could hear his jaw drop. He had a great loan for me, but I said, sorry, Charley, I’m paying cash. I just financed the loan myself through my bank (which is was everyone really should do. Don’t go with the dealership’s financing. You almost certainly can get better elsewhere. There may be an exception, but I don’t know what it is.) With 1.5% (or whatever it was), why bother paying cash? That’s practically free money. Invest the money and the vast majority of the time, you’ll be better off. Worked for me. My wife and I’s credit score is in the same range. After about 750, the number doesn’t really matter loan-wise, so far as I’ve ever encountered with loans. As far as I can tell, nobody gives a shit if you’re an 850 or a 790. It’s all “A” credit. Just like with grades. 94% or 99%, it’s all an “A” on your transcript. ---
**Author:** ![Corry\_El](https://avatars.discourse-cdn.com/v4/letter/c/ecae2f/32.png) [@Corry\_El](https://boards.straightdope.com/u/Corry_El)\ **Post date:** [September 15, 2017, 3:09am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/55 "2017-09-15T03:09:11Z")
> [@Voyager](#): > > I bet 850 is reserved for people with so much money they’d never have to borrow. My credit score is about yours, and I haven’t had a balance in over 30 years. Very top scores are for people who have paid various types of debt, strictly on time, with a long history of still open accounts. They don’t know what anyone’s assets are, so how much money you have is not a direct factor at all. And the credit agencies consider an end of the month balance on a credit card, though paid in full by the due date (no interest) to be debt. I and others have answered the question assuming if you don’t run a balance from month to month you don’t have CC debt. But the agencies don’t view it that way. If you’ve had the same card(s) for 30 yrs, they see you as having paid your CC debts on time for 30 yrs, not as having had no CC debt. It doesn’t help per se to run a balance. If anything it hurts since another parameter is statement end balances divided by total credit lines on the cards, the smaller the better. But it does help to have or have had other kinds of debt besides CC’s within the window of time the agencies would look at. I haven’t had a mortgage in my name (as opposed to ones on investment properties in my LLC’s name, without full recourse to me, and those doesn’t show up on my report) for over 20 yrs. As far as the agencies are concerned apparently I’ve never had one. And my oldest CC account is only 12 yrs old (I don’t remember what happened to the older ones, I definitely used CC’s, though sparingly, before that). Those are the reasons, according to both Credit Karma and the free credit analysis on both my Amex and Visa cards, that my score is slightly below 800, not quite ‘excellent’. No late payments ever, no other negative marks. Getting a low rate car loan then paying it on time would help. But it’s not worth the extra hassle, for me. ---
**Author:** ![Shagnasty](https://avatars.discourse-cdn.com/v4/letter/s/9dc877/32.png) [@Shagnasty](https://boards.straightdope.com/u/Shagnasty)\ **Post date:** [September 15, 2017, 3:17am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/56 "2017-09-15T03:17:59Z")
I don’t do debt except for my rather small 12 year mortgage (for this area). The only reason I do that is because the interest rate is so low. I could pay it off now but it isn’t worth it. I have many credit cards but I look at [Mint.com](http://Mint.com) daily and pay them off as soon as charges hit. The only reason I have so many is because I use them for free travel. I absolutely cannot stand owing people money. It gives them power over me and that is something I just don’t allow. I have plenty of it but the only things I pay for myself are semi-frugal. I have a nice car, a huge wardrobe a house and lots of money in the bank but I always want to see the balances going up and not down. Life is a lot simpler that way. My daughter needed a $500 tooth extraction for an impacted baby tooth today. That isn’t cheap but I have many times saved for things like that in my HSA so I can just hand over my card and it is done. If my car blows an engine, I can easily just buy a new one with cash or have it fixed with no sweat. That isn’t bragging. I learned this lesson the hard way from parents that couldn’t manage finances to save their life and I have been desperately poor myself at times. I just never want to repeat those mistakes. It usually takes years but most people with any discipline and sense can do it if they make smart choices and learn to be a little paranoid. I have been accused of being way too fiscally conservative but I am not the one sweating any bills. ---
**Author:** ![drewder](https://avatars.discourse-cdn.com/v4/letter/d/57b2e6/32.png) [@drewder](https://boards.straightdope.com/u/drewder)\ **Post date:** [September 15, 2017, 3:23am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/57 "2017-09-15T03:23:30Z")
> [@Voyager](#): > > I bet 850 is reserved for people with so much money they’d never have to borrow. My credit score is about yours, and I haven’t had a balance in over 30 years. > > When I bought my last car and the salesman ran the credit check, I could hear his jaw drop. He had a great loan for me, but I said, sorry, Charley, I’m paying cash. Your fico score is an I love debt score. If I gave put a million dollars in your bank account it wouldn’t raise your score by one point. I think the really good score is when they can’t calculate a score on you because your report is empty. ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [September 15, 2017, 3:33am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/58 "2017-09-15T03:33:40Z")
> [@drewder](#): > > I think the really good score is when they can’t calculate a score on you because your report is empty. Empty as in no or little credit history? No, they don’t like that. That’s not going to lead to a good score at all. ---
**Author:** ![drewder](https://avatars.discourse-cdn.com/v4/letter/d/57b2e6/32.png) [@drewder](https://boards.straightdope.com/u/drewder)\ **Post date:** [September 15, 2017, 3:36am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/59 "2017-09-15T03:36:27Z")
> [@pulykamell](#): > > Empty as in no or little credit history? No, they don’t like that. That’s not going to lead to a good score at all. Yeah they hate it. All drug dealers hate quitters. ---
**Author:** ![Shagnasty](https://avatars.discourse-cdn.com/v4/letter/s/9dc877/32.png) [@Shagnasty](https://boards.straightdope.com/u/Shagnasty)\ **Post date:** [September 15, 2017, 3:52am UTC](https://boards.straightdope.com/t/are-you-debt-free/796312/60 "2017-09-15T03:52:39Z")
> [@drewder](#): > > Your fico score is an I love debt score. If I gave put a million dollars in your bank account it wouldn’t raise your score by one point. I think the really good score is when they can’t calculate a score on you because your report is empty. That isn’t quite accurate. A FICO score doesn’t mean that you love debt. It just means that you use credit. That could be a mortgage, car loan or credit cards. Things like utility and medical bills don’t count as long as they don’t go to collections because they aren’t considered debt. I play my credit scores like a video game and have for many years. I use it to get the best credit cards for travel offers and I am very good at it. I literally have more free plane tickets and hotel stays that I can use right now. That is what you call a good problem to have. I do not let my credit card balances revolve - ever. I usually pay them off within days of charges hitting. The only debt I have is my mortgage and it is very modest but (re)financed well. My credit scores for Transunion and Equifax right now are 818 according to [www.creditkarma.com](http://www.creditkarma.com) (legit and recommended for anyone looking to learn about the factors influencing their own credit score). That is high enough not to disqualify me for anything based on score alone. It used to be much higher than that but I recently refinanced my mortgage so the hard inquiry is bringing it down from the absurdly high to the astounding range. You are correct that income doesn’t matter for credit scores. It is all about your length of credit history, number of accounts and, most of all, your payment history but you don’t have to go into into debt to have an extremely high credit score. The basics are very simple. The most important thing is to never miss a true credit payment by more than 30 days and to a have a mix of accounts even if you rarely use most of them. [Previous page](https://boards.straightdope.com/t/are-you-debt-free/796312.md?page=2) [Next page](https://boards.straightdope.com/t/are-you-debt-free/796312.md?page=4)