Disney Visa Card--are the perks worth it?

[2Rebecca]

I'm planning a trip to WDW in the fall and am debating on whether I should get a Disney Visa Card (or the Disney Premier Card). It has been 20 yrs since I've been to Disney, so I'm not sure what a "Disney Character Experience" really is or if it is worth taking time away from other things to do. Does anyone have one of the Disney Visa Cards? Are the card member & star wars perks worth attending? What about the 10% dining discount? Do you have to use the VISA card to receive them, or do you get the same discount if you use the redemption card they give you when you cash out points?

It appears I can get better cash back offers with other chase cards where the cash back can be used for anything and not just Disney related. I'll be making a few large purchases in the upcoming weeks, so if I'm going to get a new card, I need to apply for it now, so I can get points whether it be on a Disney Visa or a different card. I'd love to hear your thoughts on the Disney card.

BTW, I always pay my balance off each month, so I'm not worried about interest rates. I also have a non-DVC timeshare, so the 0% for 6-month financing isn't something I would take advantage of because we will be staying offsite.

 

[RustySpork]

I love car leasing..so he would never approve of me.lol. Really, you have to use his stuff as a guide and do what works best for you. If you keep your cards down to one or two..only use them for points and pay every month..then it's actually very smart (imo). His major flaw is that you still need to build credit some way, if you pay cash for everything then one day it will bite you if you need credit..car, house, any kind of installment loan. But I don't have books, seminars, and millions of followers.. so maybe we are doing it wrong

You might be the first person I've seen that loves leasing cars. What's the scoop on that?

 

[21stamps]

You might be the first person I've seen that loves leasing cars. What's the scoop on that?

The scoop- I know myself.lol
1. I have a fear of commitment.
2. I get bored with something easily.
3. I have no desire to ever have a large car shop repair bill.
4. From age 18 I traded in 3 cars within 2.5 years..and lost a shoot ton of money doing so.
So, ever since then I switched to leasing..except for a few years where I drove 25k miles per year and had to take a break from it.
Basically, I'm fickle..and I hate losing money..I know that I will never keep a car for 10 years (the only way to really make buying "worth it")
So instead, I leased, drove about 18k per year..traded in my car instead of paying for the mileage fees, and went along my merry way in a new car with a new warranty.

It's always funny to me that people saying things like "oh I would never lease! I like to own my car!" But yet Americans are now taking out an average loan term of almost 72 months.
Some going over 90.
Do the majority of these people ever "own" their car? Heck no, they trade in after 4-5 years and have negative equity rolled onto a new loan and paying interest on it..making their bad situation worse. The bank owned their car the entire time..and now a bank owns their new one.lol

 

[Rsj88]

We have the card with the $50 annual fee. We put everything on it and pay it off at the end of the month so the interest rate doesn't matter to us. We usually end up with $500-$800 in points by the end of the year. We use to have the no annual fee card but hardly made any points. We typically make $40 in points month so it pays for itself in about a month. It depends on how much you spend and where you spend it. We use a lot of gas with commuting to work and groceries with kids so it works for us. But I can see how it would not for other people. We also drive to WDW so the flyer mikes don't do anything for us either.

 

[RustySpork]

The scoop- I know myself.lol
1. I have a fear of commitment.
2. I get bored with something easily.
3. I have no desire to ever have a large car shop repair bill.
4. From age 18 I traded in 3 cars within 2.5 years..and lost a shoot ton of money doing so.
So, ever since then I switched to leasing..except for a few years where I drove 25k miles per year and had to take a break from it.
Basically, I'm fickle..and I hate losing money..I know that I will never keep a car for 10 years (the only way to really make buying "worth it")
So instead, I leased, drove about 18k per year..traded in my car instead of paying for the mileage fees, and went along my merry way in a new car with a new warranty.

It's always funny to me that people saying things like "oh I would never lease! I like to own my car!" But yet American's are now taking out an average loan term of almost 72 months.
Some going over 90.
Do the majority of these people ever "own" their car? Heck no, they trade in after 4-5 years and have negative equity. The bank owned their car the entire time..and now a bank owns their new one.lol

Interesting. You can still do all of those things if you buy, but you do take a slight depreciation hit up front. I've traded 8 cars in 10 years and have never been in a situation where I had any negative equity when I traded. I tend to lean towards cars that hold their value though.

 

[RustySpork]

I am Dave Ramsey, your host, and this is your show, America. Thank you for joining us where we talk about your life and your money.

The Dr. Phil of personal finance!

 

[21stamps]

Interesting. You can still do all of those things if you buy, but you do take a slight depreciation hit up front. I've traded 8 cars in 10 years and have never been in a situation where I had any negative equity when I traded. I tend to lean towards cars that hold their value though.

You're still losing if you did the math. If you trade in you "purchased w/ a loan" car after 2 years, and 0 negative equity.. and I trade in my "leased car" after 2 years- 0 negative equity...
Here's why- using fictions numbers-
We buy the same car. Car is priced at $30k.
You are paying taxes on $30k. I'm paying taxes on $10k.
You pay $650 per month. I pay $350 per month.
The math is overwhelmingly in my favor over a 2 year period. That's why I don't understand why people "buy" and trade in in that time period. You are throwing away a lot of money.

That's a reasonable reason. Not for mce, since I keep my cars 10+ years and pay cash for them, but I do understand where you are coming from. Of course, you are losing money by always having to make a payment, which includes interest and depreciation factors (although not explicitly) in leases

Oh I agree with you! I just know myself that I would have a car payment anyway.lol. So better to do the lower risk one. In a lease I am only paying the depreciation (and taxes on it), the bank is assuming the rest of the risk, and I'm only paying tax on the time that I'm using it.
Plus, my GAP insurance is included which saves several hundred more dollars as well

 

[RustySpork]

You're still losing if you did the math. If you trade in you "purchased w/ a loan" car after 2 years, and 0 negative equity.. and I trade in my "leased car" after 2 years- 0 negative equity...
Here's why- using fictions numbers-
We buy the same car. Car is priced at $30k.
You are paying taxes on $30k. I'm paying taxes on $10k.
You pay $650 per month. I pay $350 per month.
The math is overwhelmingly in my favor over a 2 year period. That's why I don't understand why people "buy" and trade in in that time period. You are throwing away a lot of money.

Yeah, but leasing vs buying is similar to renting vs owning your home. At the end of your lease or your rental, you have nothing.

If I buy a car for $76,000 and I make 24 of 48 payments on the loan at 2% interest and I trade the car at 24 months, chances are I've held the majority of the value of the vehicle. If you calculate typical depreciation of $5k, that means I have (around) $33K in equity to roll into the next vehicle. I can either take that and put it into another car of the same value, or I can put it down on a $100K vehicle and reduce my payments. I'm not really going to care about interest because it's 2%.

If I lease a $76,000 car, and I make 24 payments against it before I trade it for another one I have net-zero in equity to roll into the next car.

At the end of the day, in my opinion it doesn't matter if you pay $350 rather than $650 if you have no equity in the end. If you're buying a Mazda or a Honda that doesn't hold its value, you'll lose a little more of your equity (ok a lot more) but you're still coming out ahead of net-zero.

We're definitely going far off topic, but I'd love to keep discussing this as I find it really interesting. Maybe we can create a new thread somewhere?

 

[21stamps]

I know we are way off topic, so I'll try to wrap up my input by noting I work in the auto/auto finance industry and there is a reason that leases are being pushed so hard - much more profit for the lenders. I see a vehicle lease as similar to the Disney Dining Plan. Usually, both are better financially for the provider. But, there are exceptions where the consumer can come out ahead, and sometimes that is in the form of intangible benefits.

If someone trades a car in a 3/4 year time period anyway is the only way that leasing will benefit a person. Someone who keeps their car for 7-10 years would lose by leasing.
It all depends on the individual. But "buying" a new car and trading it in within a few years is one of the worst mistakes someone can make. A car is a depreciating asset. One of the biggest ones that exist.lol
But actually leases are typically less profitable to the lender. Interest on a 6-7 year loan is much greater than a money factor on a lease.

Yeah, but leasing vs buying is similar to renting vs owning your home. At the end of your lease or your rental, you have nothing.

If I buy a car for $76,000 and I make 24 of 48 payments on the loan at 2% interest and I trade the car at 24 months, chances are I've held the majority of the value of the vehicle. If you calculate typical depreciation of $5k means I have around $33K in equity to roll into the next vehicle. I can either take that and put it into another car of the same value, or I can put it down on a $100K vehicle and reduce my payments. I'm not really going to care about interest because it's 2%.

If I lease a $76,000 car, and I make 24 payments against it before I trade it for another one I have net nothing in value to roll into the next car.
@dmw is the only car buyer of us 3 who is doing it "correctly" lol
At the end of the day, in my opinion it doesn't matter if you pay $350 rather than $650 if you have no equity in the end. If you're buying a Mazda or a Honda that doesn't hold its value, you'll lose a little more of your equity (ok a lot more) but you're still coming out ahead of net-zero.

We're definitely going far off topic, but I'd love to keep discussing this as I find it really interesting. Maybe we can create a new thread somewhere?

But you never owned your car. The bank did. It's not even remotely similar to buying a home vs renting one. There are no benefits to being a "Car owner where the bank holds the title"lol. There are benefits to having a mortgaged home.
You just paid more for those 2 years, and you paid taxes on $78k..for only owning a car 2 years and you can never get those back... Cars depreciate the same regardless of if they are leased or a loan...it's the car itself that depreciates. If you have ever traded in a car after 2 years and had $33k in POSITIVE equity (without putting 10s of thousands down)...then you need to be all over the TV on commercials for that brand.lol Your depreciation assessment and your loan calculations are way, way, way, off of anything that is close to realistic, unfortunately. It would be awesome if that was how it works though!

yeah..I didn't mean to start a whole loan vs lease convo. I was just saying how Dave Ramsey wouldn't approve of all of my decisions...or of any credit cards.

 

[CaptainAmerica]

@21stamps is right. IF you're going to want a new car every three years, leasing is better than financing.

That said, leasing is terrible. We own both of our 2012 cars outright and we wouldn't change a thing. The annual depreciation on a five year old vehicle is practically zero, meaning my auto expenses are practically zero. It's amazing how rich you feel when you don't have a car payment.

The equity conversation is a non-starter and it doesn't have anything to do with a home. The reason a mortgage is okay is because 99.9% of people don't have the money to buy a home outright so the only other option is renting because you have to live somewhere. The same dilemma isn't true of car ownership, which is relatively easy to do without any type of financing. You don't buy a car as an investment, you buy it for its utility.

 

[21stamps]

@21stamps is right. IF you're going to want a new car every three years, leasing is better than financing.

That said, leasing is terrible. We own both of our 2012 cars outright and we wouldn't change a thing. The annual depreciation on a five year old vehicle is practically zero, meaning my auto expenses are practically zero. It's amazing how rich you feel when you don't have a car payment.

Yes, I am not saying leasing is a smart financial decision. I am saying IF you are going to be in the type of trade cycle regardless, it is overwhelmingly the better choice of loan vs lease.

 

[RustySpork]

But you never owned your car. The bank did. It's not even remotely similar to buying a home vs renting one. There are no benefits to being a "Car owner where the bank holds the title"lol. There are benefits to having a mortgaged home.
You just paid more for those 2 years, and you paid taxes on $78k..for only owning a car 2 years and you can never get those back... Cars depreciate the same regardless of if they are leased or a loan...it's the car itself that depreciates. If you have ever traded in a car after 2 years and had $33k in POSITIVE equity...then you need to be all over the TV on commercials for that brand.lol Your depreciation assessment and your loan calculations are way, way, way, off of anything that is close to realistic, unfortunately. It would be awesome if that was how it works though!

yeah..I didn't mean to start a whole loan vs lease convo. I was just saying how Dave Ramsey wouldn't approve of all of my decisions...or of any credit cards.

When you buy a home, you tend to have a mortgage unless you go to the table with a cash offer. So, the bank owns your home too. You're grossly misunderstanding the value of equity. My depreciation estimates aren't far off at all, in fact I'm basing them off of recent trades.

 

[RustySpork]

Yes, I am not saying leasing is a smart financial decision. I am saying IF you are going to be in the type of trade cycle regardless, it is overwhelmingly the better choice of loan vs lease.

(full disclaimer- I have a company car so do not have a loan or lease at this time. But if that ever goes away then I will lease again in a heartbeat lol. As it is now I have a different car about every 3 months.)

Leasing is a terrible financial decision, but for some people it's the right decision. Just like renting property is the right decision for some people, but terrible for others.

 

[21stamps]

When you buy a home, you tend to have a mortgage unless you go to the table with a cash offer. So, the bank owns your home too. You're grossly misunderstanding the value of equity. My depreciation estimates aren't far off at all, in fact I'm basing them off of recent trades.

Like I said above, there are major differences between being a home owner with a mortgage and being a car owner with a bank holding the title. They are apples and oranges. This is one area that I do know a lot about.lol I'm in finance, and I would never recommend someone to take a loan on a car and keep it for 2 years. It's crazy.

 

[RustySpork]

@21stamps is right. IF you're going to want a new car every three years, leasing is better than financing.

This is only true if you can't get a great interest rate and pay more in interest than in principle.

 

[21stamps]

This is only true if you can't get a great interest rate and pay more in interest than in principle.

No. It has nothing to do with the interest rate. It's about the depreciation, and the taxes. And the other things that you should buy when financing a vehicle.
It's mathematical not magical

 

[RustySpork]

Like I aid above, there are major differences between being a home owner with a mortgage and being a car owner with a bank holding the title. They are apples and oranges. This is one area that I do know a lot about.lol I'm in finance, and I would never recommend someone to take a loan on a car and keep it for 2 years. It's crazy.

Finance, eh? Are you seriously going to tell me that holding a loan at 2% and building small amounts of equity in a higher end product that's good for roughly 4-5 years and can be rolled into the next purchase is not as smart as lighting money on fire (I mean leasing)?

If you have a note on a car or a home, the bank owns it.

 

[RustySpork]

No. It has nothing to do with the interest rate. It's about the depreciation, and the taxes. And the other things that you should buy when financing a vehicle.
It's mathematical not magical

Let's say we're talking about a Porsche Cayenne. Tell me how I would lose money on trade after two years of ownership when buying vs leasing.

By the way, I created a new thread - http://forums.wdwmagic.com/threads/win-or-lose-lease-rent-vs-buy.924556/

 

[CaptainAmerica]

This is only true if you can't get a great interest rate and pay more in interest than in principle.

That's a myth. Everyone pays the market interest rate, they just don't know it because it gets masked in an inflated principal. You might think you're getting a $30,000 car at 0% interest rate, but you could probably get the same car for $27,000 at a 5% interest rate. If you're getting a "great interest rate," it means you're paying more than the FMV of the vehicle. Dealers don't take on the risk of your credit without compensation.

 

[21stamps]

Finance, eh? Are you seriously going to tell me that holding a loan at 2% and building small amounts of equity in a higher end product that's good for roughly 4-5 years and can be rolled into the next purchase is not as smart as lighting money on fire (I mean leasing)?

If you have a note on a car or a home, the bank owns it.

A home is not (hopefully) a rapidly depreciating asset. And if you didn't own a home then you would be renting. It's apples to oranges comparison.
@CaptainAmerica please explain. I don't want to continue clogging the thread.lol

 

[RustySpork]

By the way, I started a new thread - http://forums.wdwmagic.com/threads/win-or-lose-lease-rent-vs-buy.924556/