OT - financial planning/advisors out there?

[hemi68charger]

Hey gang..
Well, you know what they say about life. One, it goes on, and two, it gets in the way.

After taking my elderly mother in to care for her, post-frontal lobe dementia, I find myself in a tightening financial situation. It's not horrible, but it could be better...

Anyone out there who's into financial planning/strategy that I can pose questions on scenarios of pushing forward like things are, tabbing into my 401K to pay off high interest debt (mostly due to the need to remodel Mom's home prior to selling in order to get into something we all could live in.) Taking a loan out against my 401K would put a big dent into the monthly high interest payments and the interest of the 401K loan would go back to me (at least, that's my understanding). I'd rather pay myself back then pay it to someone else at this point. I do understand that the funds that aren't in my 401K will not accumulate interest, but hopefully, my military retirement will well compensate for that. I have another easy 15 or 20 years to work. (Especially since I have a 4 year old !!!  :grin: )

At any rate, any guidance for either input or direction would be greatly appreciated... And yes, a long time ago, ALL the credit cards are GONE...... The two biggies have been canceled and the leader (Bank of America), actually worked with my wife to lower the interest rate to 1% and 5%.. The funds I have available to me via the 401K would pay off all the high interest loans/debt and eat into a large chunk of one of the large 5% debt. All I would have would be the 1% large debt. Yes, I could sell the Daytona outright, but that's not going to happen unless it gets REAL bad...

OK, enough,,, sorry for the long-drawn out story and thanks for the ear..

[chargergirl]

Check into state and federal funds that are helping folks pick up houses that need updating and you may be able to sell mom's that way without having to take out a loan yourself. A decent realtor should know these things. Don't let someone pressure you into signing unless they give you this info up front! Wells Fargo has a rehab program built into certain loans and it is for exactly what you are talking about doing.

[hemi68charger]

Check into state and federal funds that are helping folks pick up houses that need updating and you may be able to sell mom's that way without having to take out a loan yourself. A decent realtor should know these things. Don't let someone pressure you into signing unless they give you this info up front! Wells Fargo has a rehab program built into certain loans and it is for exactly what you are talking about doing.

Oh no.. I took Mom in years ago.. This is debt from her house back in '07... We were a total "victim" of bad timing. There was absolutely no reason we couldn't have sold the house for a profit enough to "pay ourselves" back, but the housing market crashed and then there was an abundance of homes for sale and foreclosures to compete with and then, the timing of having to close on the new house because the house my family and I lived in sold the very first day on the market........ Proverbial case of caught between a rock and a hard place.......
But, that's history.......... We need to smooth out the future.......

[chargergirl]

I help people in that market every day. Ow...you need a good financial planner...best to you my prayers will be with you...not an easy place.

[0X01B8]

I wouldn't raid your 401k to pay off debt in the 1% - 5% range.  That's close to free money.  Unless I'm misunderstanding your post..

It looks like there are a lot of traps involved in a 401k loan -

http://www.401khelpcenter.com/loans.html

[hemi68charger]

I wouldn't raid your 401k to pay off debt in the 1% - 5% range.  That's close to free money.  Unless I'm misunderstanding your post..

It looks like there are a lot of traps involved in a 401k loan -

http://www.401khelpcenter.com/loans.html

The debt I would be paying off is in the range of 29.9%....... The debt I would have left over after using the 401K self-loan is in the 1.5% range. The amount I would take out in loan is about half of my outstanding debt.... I want to disseminate the higher interest rate cards that are killing us in interest.....

[0X01B8]

I wouldn't raid your 401k to pay off debt in the 1% - 5% range.  That's close to free money.  Unless I'm misunderstanding your post..

It looks like there are a lot of traps involved in a 401k loan -

http://www.401khelpcenter.com/loans.html

The debt I would be paying off is in the range of 29.9%....... The debt I would have left over after using the 401K self-loan is in the 1.5% range. The amount I would take out in loan is about half of my outstanding debt.... I want to disseminate the higher interest rate cards that are killing us in interest.....

I see now.  I think the mob has better rates than 30%.  I've wondered how to get a mob loan?   

I've been drowning in debt for years (I've paid off half a theoretical new Challenger in the last year) so I understand..and my father has some sort of dementia, and I'll lose my house before I would sell the Charger - I could live in it, actually.
Anyway, just my    but @ 30%, I'm gonna go ahead and endorse your plan.
I've heard that Dave Ramsey has some good books although I haven't read them.

-john

[89MOPAR]

  1st question i'd ask myself is -  Is my job secure for the next few years ?  - not your job field, but This job with This employer.
 
   If it is, the implications and tax consequences of borrowing from your 401K are minimal.  Yes, you will pay interest to yourself.   Yes, you will "lose" the value of what that portion you borrowed could have made in interest .  But that is most likely way way less than the 29% you'd pay otherwise.   Would you rather pay out 29% in hopes the stock market, or bonds, that your 401K invests in, makes 15%  ?   Probably not.     If you stay with the same employer until the amount borrowed is payed back, there will be No penalty tax implications.
   Where you will lose out, is that the money you pay into the 401K loan, will be "after tax" money.  But so would anything you paid to the 29% folks.

  On a personal note, 2-3 years ago, i was trying to get my dad to go 1/2 on a piece of property, raw land, in an area he liked. He considered paying for his half by taking a loan from his 401K.
His wife [ not my mom ] talked him out of it.  He was going to wait until the Dow Jones Avg hit 14,000 points per advice he got, before swapping some of his money into less volatile areas [ bonds. treasuries ]   
   Long story short - the stock market took a dump to the tune of 40%.  His $300K dollars in the retirement account turned into $180K.   His 1/2 of the land would have been $40K.  Now he has much less reitrement money saved and no property. At least if he bought the land he would have owned something tangible.

  On the Dave Ramsey suggestion from above post. I've read a book of his. Watched the TV show . Followed his plan for a year.  It works if you apply yourself / family .
  If you had told me two years ago we could pay $30,000 off car loans, motgage principals, etc, in one year, on our income, i wouldn't believe it. 
  Well we did it. Wasn't easy.  $38K paid off on principal [ this doesn't include interest ]  in a year.  With a new baby, and wife pay getting cut in half. Think about it.

[no318]

Dave Ramsey says it like it is.  His plan will work.  It will not be easy.  Anybody looking for an easy answer is dreaming.  Anyone telling you how to get there easily is full of it.

[Todd Wilson]

Dave Ramsey says it like it is.  His plan will work.  It will not be easy.  Anybody looking for an easy answer is dreaming.  Anyone telling you how to get there easily is full of it.

Beans and Rice    Rice and Beans   and sell the Daytona..........



Todd

[hemi68charger]

Dave Ramsey says it like it is.  His plan will work.  It will not be easy.  Anybody looking for an easy answer is dreaming.  Anyone telling you how to get there easily is full of it.

Beans and Rice    Rice and Beans   and sell the Daytona..........



Todd

Been trying, but I'm not going to give it away either..............

Per the above comments; I feel pretty secure with the company I'm with, even being in the oil/gas industry. The debt I have is a little over $80K due to taking Mom post-seton of Dementia. About have of that is in a 1.5 to 5% debt and the other half is at the 29.9% range. I'm trying to balance  a quality of life for the near future as well for the family. Sure, I could sell the house and cash in on the equity, but the problem is getting approved for a mortgage of the new potential house. It's a catch-22. Kim and I have already discussed a move and are good with it, but again, can't get into a house unless our income-to-debt ratio is improved (credit score). We have nearly 100K in equity, but to do a home equity loan, you can only borrow 50% of the equity value and then we still have to fight the up-hill battle of the current credit score. We are pretty much living the Ramsey philosophy (all credit cards are gone, living off cash and paying off the smallest cards with large interest rates first). But, the amount is so much, it's not a 2 year gig.

Unfortunately, we had the best of interests for Mom to fix her house to sell (we needed the profit to pay ourselves back for the improvements we paid for and as well, either take the rest and expand our then-current home, or get another one from scratch which would accommodate all of us, we choose the later). We never had the foresight to know the housing market was going to crash right as we finished up her house and be left with abundant homes in inventory competing against us). We sold the house for just the amount we needed to close on the new house. Kim and I had to eat the money we put into her house.

So, how we got here isn't an easy tale. But, we're here nonetheless.... I would much rather pay myself back with interest, get rid of all the 29.9% debt, the Durango's payment and only be left with the big 1.5% debt. All in all, the savings per month, even with paying my 401K back, would be in the range of $450-$550 per month. Again, that can go back into the low interest principle debt, cutting that one even faster. All the while, Kim can have a little bit more peace of mind from month to month and we can actually save, pay debt off faster and/or actually do something with the kids while they are still young.

Whew !!!!

Yes, I do wish to slightly think of myself and not sell the Daytona.. I, Troy, had a very long road of military(which I'm still in), college (a long, hard and very poor 7 years) and finally, my 1st and current career job........ I deserve to keep it if I can.

[Skyview69]

Have you tried negotiating that 29.9% interest rate with the credit card companies?  9 times out of ten they will reduce that to around 10% which is a huge savings.  I would avoid 401K loans.  If something happened to your job and you lost it...your loan is due and payable immediately...risky if it is a high loan amount 

Good luck...try calling and getting those rates reduced!

[hemi68charger]

Have you tried negotiating that 29.9% interest rate with the credit card companies?  9 times out of ten they will reduce that to around 10% which is a huge savings.  I would avoid 401K loans.  If something happened to your job and you lost it...your loan is due and payable immediately...risky if it is a high loan amount 

Good luck...try calling and getting those rates reduced!

My wife has tried and tried on all the high debt... She did get the two biggest accounts reduced from 12.5% and 28% to 1.5% and 5% respectively. We have pretty much exhausted all avenues with the debtors to this point. It is what it is and they are in the business to make money. I don't fault them for that. But, if I can get away from them, I will.......... Yes, I take on a big risk with the thought of losing my job, but I feel comfortable enough and I'm a very cautious man any way.........

[Skyview69]

Have you tried negotiating that 29.9% interest rate with the credit card companies?  9 times out of ten they will reduce that to around 10% which is a huge savings.  I would avoid 401K loans.  If something happened to your job and you lost it...your loan is due and payable immediately...risky if it is a high loan amount 

Good luck...try calling and getting those rates reduced!

My wife has tried and tried on all the high debt... She did get the two biggest accounts reduced from 12.5% and 28% to 1.5% and 5% respectively. We have pretty much exhausted all avenues with the debtors to this point. It is what it is and they are in the business to make money. I don't fault them for that. But, if I can get away from them, I will.......... Yes, I take on a big risk with the thought of losing my job, but I feel comfortable enough and I'm a very cautious man any way.........

The 401 loan might be a good avenue to take if it will help you I say go for it if you're comfortable with your job...after all you will pay yourself back the interest...

[89MOPAR]

I'm pretty sure the 401K loan would Not be due immediately if you lost your job.  You would be liable to pay income tax on the loan amount still owed into the plan [ at whatever rate you normally fall into based on income/ deductions ] + a penalty tax of 10-15%, which would be due for that tax year.
  If someone wanted to avoid any penalty or income tax upon losing the job, a person could get around that by paying the balance off in full to your 401K plan account. - i think thats what Skywiew69 is thinking of {?}.

A lot of the folks that try to follow Ramseys plan are using about 80% of the suggestions, very few follow it on each and every point.  His vehicle value to income ratio suggestion is : total value of vehicles is equal to or less than 50% of annual income.
    It's gotta be figured for the average person with newer cars though, obviously a guy who buys a 2010 Hyundai will have a car worth about 1/5 the purchase price in about 10 years, whereas our Chargers and vintage cars will be holding value $ and/or worth more $$ , in year 2020.      We kept 7 out of the 8 vehicles we had, and they are worth more than half our annual income easily, been driving old cars for 20 yrs now though, and have built up to this point- so thats non-negotiable with me.

  Sounds like your well on top of the situation, just will be awhile chipping away at it... 

[hemi68charger]

Yo ya'll..
Wife just talked to a couple of the credit card companies we have debt with. In chatting with them and agreeing on a lowered "settled" amount, the agent mentioned something to her that she wasn't sure about and not comfortable with;

1. They mentioned the difference in outstanding principle and the settled amount it taxable income

and

2. Agreeing with the amount, once reported to the credit bureau, i.e. Equifax, etc., it will decrease your credit score instead of, in my understanding, increasing your credit score because of overall lowered debt.

Any of this make sense or is it a scare-tactic?

[bull]

You can negotiate with creditors to come up with a payment plan. That's a good place to start.

You really shouldn't touch your 401k, obviously. But is your mom's house anywhere close to paid off? If so I'd dump it for less than you think you should. I think it's better to take less of a profit on the sale of a Daytona and house and be able to pay off debt than it is to sit on it waiting for a top offer in this economic climate.

And I'm throwing in another recommendation for Dave Ramsey. Gotta snowball that debt, even if it hurts.

[Skyview69]

I'm pretty sure the 401K loan would Not be due immediately if you lost your job.  You would be liable to pay income tax on the loan amount still owed into the plan [ at whatever rate you normally fall into based on income/ deductions ] + a penalty tax of 10-15%, which would be due for that tax year.
  If someone wanted to avoid any penalty or income tax upon losing the job, a person could get around that by paying the balance off in full to your 401K plan account. - i think thats what Skywiew69 is thinking of {?}.

Yes...that is what i meant..if you lost the job you either pay the loan back immediately or they hit you with the penalties and taxes

[nh_mopar_fan]

I could be wrong but I think the 401K money can be due immediately if you leave/lose your job.

I really advise against touching the 401k. Taking that money out will cost you. First off, the repayment you're making is with after-tax dollars so, if you're in a 28% tax bracket, you do the math. On top of that, when you do take that money out, you're going to ba taxed on it a second time.

The credit card companies can and will whack your credit score if they lower your settled amount.

Do you have any equity in your current house? Could you take an equity loan out at a much more reasonable rate to pay off the credit cards?

[hemi68charger]

I could be wrong but I think the 401K money can be due immediately if you leave/lose your job.

I really advise against touching the 401k. Taking that money out will cost you. First off, the repayment you're making is with after-tax dollars so, if you're in a 28% tax bracket, you do the math. On top of that, when you do take that money out, you're going to ba taxed on it a second time.

The credit card companies can and will whack your credit score if they lower your settled amount.

Do you have any equity in your current house? Could you take an equity loan out at a much more reasonable rate to pay off the credit cards?

I asked the agency that handles our 401K's and I DON'T have to pay back immediately if I was to loose my job or move on to somewhere else. The Home equity loan would be a much higher rate than the 401K loan interest and the 401K interest I'm paying goes to myself...

With the amount of interest to the credit cards, 29.9% compared to me paying back myself at 3.3%, it's an easy choice. I'm pretty confident with my job for the duration....

Thanks to everyone..

[nh_mopar_fan]

What's your credit score like?

There are many cards that offer 0% balance transfers for up to a year. You could pay that off for a year and then find another card and transfer any existing balance to that and so on. It's been done. Not by me, but I know people who have done it.

I'm really surprised about the 401k repyament if you lose your job. That's great. Many require that you repay with 60 days of leaving your job.

[bakerhillpins]

What's your credit score like?

There are many cards that offer 0% balance transfers for up to a year. You could pay that off for a year and then find another card and transfer any existing balance to that and so on. It's been done. Not by me, but I know people who have done it.

I'm really surprised about the 401k repyament if you lose your job. That's great. Many require that you repay with 60 days of leaving your job.

I've taken advantage of several %0 apr for a year offers on cards over the years. Not to pay of debt but rather to leverage a 0% loan on autos and other large purchases while I earn interest on the money in a separate acct. The thing you need to be careful of with these offers is that typically it's an "if you qualify" deal and more importantly every time you apply for one of these (or any CC) you get a ping on your credit report. Its not necessary bad but they do note that you are trying to obtain more credit. Plus every time you pick up a new card or cancel one it has effects too. So if you use this method over and over again it will, as I understand it anyhow, impact your credit rating.

[hemi68charger]

Thanks to all...
I have submitted the application for the 401K loan. Based on the percentage of interest being paid on half of the debt (29.9%), the lack of performance of the current market and the money in the 401K not making a whole lot, the ability to pay myself interest on the loan (3.3%), the stability of my job and the peace of mind it will give us, especially my wife, it appears to be a decent decision... There are always the what-if's in life, so I take that with a grain of salt.

As far as transferring to another 0% card for one year, it wouldn't help. Most those cards have a very low transfer amount, below what I need. For nearly two years now Kim and I have lived totally off cash, no credit (other than her Durango and the house note). I believe we have developed a lifestyle now that will facilitate financial stability and growth for us and family.........

Thanks again, the beer's on me.....   

[nh_mopar_fan]

What's your credit score like?

There are many cards that offer 0% balance transfers for up to a year. You could pay that off for a year and then find another card and transfer any existing balance to that and so on. It's been done. Not by me, but I know people who have done it.

I'm really surprised about the 401k repyament if you lose your job. That's great. Many require that you repay with 60 days of leaving your job.

I've taken advantage of several %0 apr for a year offers on cards over the years. Not to pay of debt but rather to leverage a 0% loan on autos and other large purchases while I earn interest on the money in a separate acct. The thing you need to be careful of with these offers is that typically it's an "if you qualify" deal and more importantly every time you apply for one of these (or any CC) you get a ping on your credit report. Its not necessary bad but they do note that you are trying to obtain more credit. Plus every time you pick up a new card or cancel one it has effects too. So if you use this method over and over again it will, as I understand it anyhow, impact your credit rating.

That's correct. It will affect your credit rating. It's definitely something that shouldn't be done for extended periods of time.

But, if you're on a plan to get out of debt, it's an option.

Adding a card, just as cancelling a card will affect your credit rating.

You should never cancel your oldest cards. If you're not using them, cut them up but do not cancel them. They will whack your credit score.

[hemi68charger]

What's your credit score like?

There are many cards that offer 0% balance transfers for up to a year. You could pay that off for a year and then find another card and transfer any existing balance to that and so on. It's been done. Not by me, but I know people who have done it.

I'm really surprised about the 401k repyament if you lose your job. That's great. Many require that you repay with 60 days of leaving your job.

I've taken advantage of several %0 apr for a year offers on cards over the years. Not to pay of debt but rather to leverage a 0% loan on autos and other large purchases while I earn interest on the money in a separate acct. The thing you need to be careful of with these offers is that typically it's an "if you qualify" deal and more importantly every time you apply for one of these (or any CC) you get a ping on your credit report. Its not necessary bad but they do note that you are trying to obtain more credit. Plus every time you pick up a new card or cancel one it has effects too. So if you use this method over and over again it will, as I understand it anyhow, impact your credit rating.

That's correct. It will affect your credit rating. It's definitely something that shouldn't be done for extended periods of time.

But, if you're on a plan to get out of debt, it's an option.

Adding a card, just as cancelling a card will affect your credit rating.

You should never cancel your oldest cards. If you're not using them, cut them up but do not cancel them. They will whack your credit score.

I 100% agree with this.... The advisers at Bank of America were real nice and helped her with the debt situation on their cards. Because we canceled them, they actually lowered the rates to 1.5%. Yes, this will affect my credit score, but so does the large outstanding debt. I figure I would have a slightly weaker score (because of canceled account) and half of my total debt versus all the debt and a still weaker debt (because of the large outstanding debt). Either way, it affects my score. I had a score of 710 before all this happened two years ago, so my score now is about average. When this is all said and done, all the cards will be paid off except two and those will have the real low interest. The payments on those two will be straight deductions from the bank, so there's no worries about being late. The peace of mind this will give her will be enormous.

[Vainglory, Esq.]

Yo ya'll..
Wife just talked to a couple of the credit card companies we have debt with. In chatting with them and agreeing on a lowered "settled" amount, the agent mentioned something to her that she wasn't sure about and not comfortable with;

1. They mentioned the difference in outstanding principle and the settled amount it taxable income

and

2. Agreeing with the amount, once reported to the credit bureau, i.e. Equifax, etc., it will decrease your credit score instead of, in my understanding, increasing your credit score because of overall lowered debt.

Any of this make sense or is it a scare-tactic?

First of all, I'm not your attorney, and I'm not qualified to give legal advice in Texas.

That being said, as a matter of tax law, point #1 is correct.  Forgiven debt is treated as taxable income by the IRS.  However (and this is a big one), if you are "insolvent," the forgiven debt may not give rise to a taxable event.

As to point #2, the credit ratings are sorcery, and since they're proprietary, nobody really knows how they'd work.  As far as debt settlement for less than the principal amount goes, you should expect a hit to your credit since it is a red flag that says you're currently unable to pay all of your debt.  The lower overall debt should help, but perhaps not by as much as the settlement hurt.  Your big question - is my credit rating right now worth laboring under this debt for the forseeable future?  Are you buying a house right now?  Are you taking on more debt right now?  What good is a high credit score right now if it means you're stuck eating ramen for every meal for the next 10 years?  Credit can be rebuilt.

[89MOPAR]

  Agree with Vainglory on both points.  the amount forgiven is taxable.  Ok that's bad, but better to owe 28% of  $XYZ , than the full $XYZ amount.

  And the Credit score - you have a new house, you've basically gone all cash.  CAsh doesn't need a credit score, its cash.  As some of the Ramsey folks say " I'm going for a credit score of Zero ".

[nh_mopar_fan]

Have auto insurance? Guess what many companies are using in the equation to determine what your premium is?

Credit rating.

Ramsey is a clown.

anyone who takes the position that credit is bad under any circumstance is an idiot. If you can't handle credit, learn how to handle credit. Don't just give up and take on a "credit is evil" attitude.

The snowball method is an ok idea but he wants you to pay off the lowest balance first no matter what the interest rate is. So, he wants you to pay off the $5000 at 0% before you pay off the $7000 at 10%. How in the world does that make financial sense?  

Oh, he's all cash. Uh, until you have to buy his program. Then credit cards are just fine as a form of payment.  

[bull]

Have auto insurance? Guess what many companies are using in the equation to determine what your premium is?

Credit rating.

Ramsey is a clown.

anyone who takes the position that credit is bad under any circumstance is an idiot. If you can't handle credit, learn how to handle credit. Don't just give up and take on a "credit is evil" attitude.

The snowball method is an ok idea but he wants you to pay off the lowest balance first no matter what the interest rate is. So, he wants you to pay off the $5000 at 0% before you pay off the $7000 at 10%. How in the world does that make financial sense?  

Oh, he's all cash. Uh, until you have to buy his program. Then credit cards are just fine as a form of payment.  

Ramsey might be considered a clown unless you're in debt up to your eyeballs. I'm not sure if that's exactly where he's at but it sounds pretty bad so I'd say Ramsey's approach could help in this case. The paying off the smallest debt first thing is to help you progress quickly, eliminate the first debt and then apply that payment to the next debt and so on. Eliminating your smallest debt helps your morale and motivates you to keep moving forward.

[chargergirl]

Yo ya'll..
Wife just talked to a couple of the credit card companies we have debt with. In chatting with them and agreeing on a lowered "settled" amount, the agent mentioned something to her that she wasn't sure about and not comfortable with;

1. They mentioned the difference in outstanding principle and the settled amount it taxable income

and

2. Agreeing with the amount, once reported to the credit bureau, i.e. Equifax, etc., it will decrease your credit score instead of, in my understanding, increasing your credit score because of overall lowered debt.

Any of this make sense or is it a scare-tactic?

It isn't enough to kill ya. The creditors will look at it as you tried. I have even been told not to pay those off cause it will drop your credit rating.Sometimes it is better just to let those ride is what I was told. Unless this is so large that bankruptcy would be better take the bankruptcy. Credit is back in three years as opposed to 5-10 years. I know you are trying to do the right thing. Sometimes it is best to take the fast track.

[no318]

Have auto insurance? Guess what many companies are using in the equation to determine what your premium is?

Credit rating.

Ramsey is a clown.

anyone who takes the position that credit is bad under any circumstance is an idiot. If you can't handle credit, learn how to handle credit. Don't just give up and take on a "credit is evil" attitude.

The snowball method is an ok idea but he wants you to pay off the lowest balance first no matter what the interest rate is. So, he wants you to pay off the $5000 at 0% before you pay off the $7000 at 10%. How in the world does that make financial sense?  

Oh, he's all cash. Uh, until you have to buy his program. Then credit cards are just fine as a form of payment.  

Ramsey might be considered a clown unless you're in debt up to your eyeballs. I'm not sure if that's exactly where he's at but it sounds pretty bad so I'd say Ramsey's approach could help in this case. The paying off the smallest debt first thing is to help you progress quickly, eliminate the first debt and then apply that payment to the next debt and so on. Eliminating your smallest debt helps your morale and motivates you to keep moving forward.

I agree, Bull.

AND Ramsey does NOT accept credit card purchases, only debit cards.  Nothing wrong with living debt free and paying yourself payments vs. paying interest to someone else. 

[nh_mopar_fan]

Nothing wrong with paying that credit card off every month and not charging it if you don't have the money to pay it.

I admit I'm not sure but, can you actually rent a car without a credit card?

Haven't paid a dime in credit card interest in well over 10 years now.

Once again, anyone who takes the position that credit is bad under any circumstance is an idiot. If you can't handle credit, learn how to handle credit. Don't just give up and take on a "credit is evil" attitude.