Cash vs credit

[Trevor Lord]

Ok, so I know people say to have around 5k on hand to through hike. My question is how much of this sum can be credit? I can't save enough cash to bring with after all my expenses but would have no problem paying off a credit card when I get back as I will be coming back to a job

[bear bag hanger]

You need to look at the interest rate on your credit card. I've seen rates as high as 30% (OK, it's only 29.9%), which makes paying off $5,000 kind of difficult, even if you have a job. Most banks will tell you that's only the "penalty" rate, but you wind up paying the penalty rate forever if you miss one single payment or something else (for example, when they don't make their quarterly income projections). The main problem with credit cards for slightly longer than a short term loan (by short term I mean one or two months) is they can pretty much jack up the rate to anything they want, anytime they want and they usually wait until you have a large balance before jacking up your rate. Remember, banks aren't there for you, they are there to make money from you and will do whatever they can get away with to do so.

[Cherokee Bill]

You need to look at the interest rate on your credit card. I've seen rates as high as 30% (OK, it's only 29.9%), which makes paying off $5,000 kind of difficult, even if you have a job. Most banks will tell you that's only the "penalty" rate, but you wind up paying the penalty rate forever if you miss one single payment or something else (for example, when they don't make their quarterly income projections). The main problem with credit cards for slightly longer than a short term loan (by short term I mean one or two months) is they can pretty much jack up the rate to anything they want, anytime they want and they usually wait until you have a large balance before jacking up your rate. Remember, banks aren't there for you, they are there to make money from you and will do whatever they can get away with to do so.

GREAT response!!!!!!

[Trevor Lord]

My plan was to have my wife make the minimum payments while I'm gone so that way I never miss a payment. Also because I never use my cards I get a lot of 0% interest for a year offers. I could maybe look into a personal loan then if credit card is a bad idea? My original plan was to sell my car but I looked at its value and realized I owe more than it is worth so that's a no go.

[Drybones]

My advise is to never put anything on a credit card you can't pay in full when the bill comes each month. The only reason I use a credit card is to make money for myself. The card I use gives me 1% back on all purchases and more on some. Using my card earned me $368 last year, which with interest rates where they are is probably more than my savings account earned...never live on borrowed money!

[Trevor Lord]

My advise is to never put anything on a credit card you can't pay in full when the bill comes each month. The only reason I use a credit card is to make money for myself. The card I use gives me 1% back on all purchases and more on some. Using my card earned me $368 last year, which with interest rates where they are is probably more than my savings account earned...never live on borrowed money!

Being honest with you this is how I live now, I have never carried any debt from month to month and only use my card so I don't have to carry cash. I love getting my 100 dollar check from my cash back. The only reason I am considering this is lack of better options and the thought that this is my only time I will be able to do this hike before I get a job that I don't want to just quit.

[MuddyWaters]

Not smart, but you wouldnt be the first to do it.

There is a reason the average person is saddled down with credit card debt they cant pay back.

People want what they cannot afford.

[flemdawg1]

"If you play with snakes, you're going to get bit." Dave Ramsey

[Biggie Master]

Consider selling the car that you are already upside down on - and pay off the remaining debt ASAP. Then save the monthly payment for the hiking account. You can buy a reasonable used car when you return to work after your hike. Doesn't make sense to pay on a vehicle to sit in your garage for 6 months... Payment, tax, insurance, maintenance...

[Biggie Master]

Should have also added that everything is more enjoyable when it's paid for and not financed. You don't want the debt of a hike to be in your mind as you are enjoying the freedom of nature.

[elmotoots]

If I was in your shoes, being 29 and having the blessings of the wife, I WOULD do it. You have the rest of your life to get debt free. I was in debt the whole time I was raising my family. I am now debt free, but low on energy. Do it while you can. My only other advice is to never have more than one credit card. That's the way I carried unplanned debt and it was easy to pay off just one card.

[Just Bill]

I've been in the same boat, on trail and off- Here's my rule- my limit is based upon a six month payback. Sometimes I do big side jobs and have to front money for material, but I know I have a check coming- no biggie. Hiking though- do you feel confident that you can earn enough income when you return to pay it off in a timeframe you are comfy with? That's the big question. If you work lower paying jobs, you don't want financial worries hanging over your head ruining your hike- money problems are a big reason folks quit. Consider a second job if that's the case so you can go on trail worry free. That said- whenever I have time, I have no money; whenever I have money, I have no time. If you are only a grand or two off, and that's all that's stopping you- go for it!

[yellowsirocco]

If I was in your shoes, being 29 and having the blessings of the wife, I WOULD do it. You have the rest of your life to get debt free. I was in debt the whole time I was raising my family. I am now debt free, but low on energy. Do it while you can. My only other advice is to never have more than one credit card. That's the way I carried unplanned debt and it was easy to pay off just one card.

This is good advice. Credit card debt sucks, but if the only way you can try a thru hike is now or when you retire then go for it.

[SonrisaJo]

Life is short, and given your situation, I would do it. You might end up spending a lot less overall, knowing that you'll have to pay it off afterwards. Sounds like you've thought it through and know what you're getting into. A lot of people are stuck with credit card debt from dumb purchases of things they never needed. This may be the best "thing" money can buy. Hike frugally and breathe deeply.

[Just Bill]

excellent points all- one further idea- wait until the very end of your trip to tap the credit cards- that way you'll only carry debt for the shortest period as well. As others mentioned- maybe you won't even need it.

[Jeff]

"If you play with snakes, you're going to get bit." Dave Ramsey

Dave Ramsey is one smart guy. He would advise you to get a second job delivering pizzas and save up enough money to finance the trip without the need for credit cards.

[daddytwosticks]

Credit cards suck. The wife and I have one from the credit union and use it on occasion. Hard to live now-a-days w/o one. Best to pay off completely each month. Stay out of debt and live below your means for a happy life.

[Old Hiker]

As my first 1st Sergeant from Basic Training told us in our first of many financial briefings, "You RUN into debt and CRAWL out." There are certain things you need (usually) a long-term loan for: house, car, large purchases of some sort. I paid off one Visa card before my last thru-hike, just to get the payment off my wife and I'm trying to pay off the last one.

It's hard to pay off a card when you have legal bills that keep adding up. It'll be close, but doable. I use that card for Amazon, REI, etc for online purchases, but I transfer the money out of savings directly to the card to pay the purchase off immediately.

Use the card towards the end, like what was said before. Don't blow your cash, thinking it'll be OK, I have a card to use. Stretch it out as much as possible.

You may want to put it off another year to make sure.

Good luck - safe hiking.

[jesse]

I wouldn't go into debt to pay for a vacation.

[DavidNH]

Credit cards will work for most of the trip. Pay off the balance each month and you avoid interest charges. Of course that would mean having someone at home pay the bills for you. I will second Jesse's comment.. don't go into debt to pay for a vacation. Have the money in bank FIRST, THEN do the vacation! There are some places that just plain won't take credit cards. here you use cash or better yet an atm card to get cash. You could also carry travelers cheques because they are accepted everywhere far as I know.