Originally Posted by
Danhedonia
I use my credit card everywhere; it gives me cash back, and I pay it off daily. Sometimes several times a day, if I'm buying a lot of stuff. If someone offered you a 1% raise, would you refuse? I even use it to pay any bill that doesn't surcharge for plastic.
Koyote also pointed out the math involved in low interest rates. If your interest on a loan is lower than a conservative estimate on rate of return for an investment, than you are being foolish avoiding the loan. My father made a serious amount of money simply observing this 'napkin arbitrage.' My father is also a rocket scientist. For real.
To answer the OP's question about intrinsic value, you need to consider economies of scale. Companies that sell $3k bikes don't have the volume to where they maximize cost efficiencies. Whereas a company selling millions of $25k automobiles does. This is why chocolate at the boutique place costs $20 a pound (or more), but Whitman's samplers come cheap. Because the overhead of any company is fixed, to a degree, and the smaller the enterprise, the greater the cost of sales.
I once bought a new car with a CC...Well, I used one of those 0% interest checks issued by the CC bank, which still netted me one point for each $1 of the purchase. It wasn't a very expensive car, but I still got enough points for a free plane ticket. And of course I paid off the CC before any interest charges accrued.
On our recent home purchase, we went with a 30-year mortgage even though we could easily pay it off in 15 years. The interest rate is only 4%, which is well below the stock market's historical average rate of return. So, smaller house payment = more cash in the market.