| How much credit card debt is acceptable for you?
Posted: 8/30/2007 2:07:25 AM | From Post 19:
"If I can’t afford it totally and one hundred percent paid for, I don’t get it. If I really need it, I save up for it.
I rather drive a crappy looking car (and I do), rather then be enslaved into making monthly payments on it, only to depreciate to a near zero value, even when it’s not paid for yet."
"It’s better to be free, and look like a beggar, then to look like a king, and be owned by a financial institution for years, or even for life"
I agree with most of the philosophy described in the post.
"The things we own wind up owning us" (from the Fight Club)
I believe in: Rationalise, Simplify, Economise!
I am a capitalist but I do not trust banks and I do not have a credit card, refuse them when offered. Your number can be stolen via any tranaction, and then, good luck!!!!
Only had one in Belgium when I travelled a lot a needed to rent cars when on trips in Ireland or Portugal or Denmark.
My main assets are my health, my brain, my social security scheme (state) and some money in the bank. I do not own stocks or bonds or any other instruments. And I plan to sell my flat, for cash, not to any mortgage seeker. I only loan banks, I do not borrow from them.
I do not even date people in debt!!!!! Or even want friends who are in any kind of debt. They are not "free", they are "married" to their financial obligations! And I do not date "married" or married women!!!
Dated too many women who lived financially on the edge and when asked "how are you going to pay your rent at the end of the month?" they would reply "Something will come up". Eh?!
I have even dated a woman who lived at home with her parents, had a good job and still owed money to credit cards because she spent money on clothes and SHOES!!!!!
Owning a house (even free of mortgage) limits your geo mobility and makes you attached to material things and things that do not really matter in life. Having a good social security plann (health plan and pension) is way better than any other "asset" or "property", except a brain/wisdom, IMO!
In my flat I have beds, chairs, a TV, a PC and DSL connection a fridge, a washer, a good plumbing. I have given away most of my clothes and sold off most of the antiques my parents owned. And I am moving to a country/market where I can max up on my salary or start and operate a small but global successful business! That is capitalism!!!
And I do not trust anymore people dressed in dark grey business suits!!! They are meant to give a false sense of "trust"!
So, zero credit card debt, live within your means and expand based on your skills and the capital of your mind.
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 3:07:34 AM |
Strange, I've never seen the no interest loans for one month. And I have no idea what extended warranties have to do with credit card debt. In addition, I have a very high credit rating and I have paid off my credit card debt monthly for many years. So saying that you're considered a deadbeat makes no sense whatsoever. Sure you have... if you pay off your credit card every month then you get one all the time. You pay no interest in purchases paid off in the first 25-30 days. As for the warranties and such, have you never read about the benefits of using a mastercard for your purchases? They add on a lot of additional warranties or even car rental and travel insurance to purchases that were made on those. | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 9:16:09 AM | In these times...with rising unemployment due to job outsourcing, and the puke-inducing subprime financing crisis...I think it'll be more "How far behind in mortgage payments is acceptable for you?" | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 9:27:20 AM | | I have no credit card debit. I may get flamed for this but I just don't have much respect for people that charge their cards to the max - show some frickin' self control & quit telling ME how broke you are! | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 9:30:48 AM | | Zero balance for me thankyou. If you can't pay the total of your credit card when the bill comes you shouldn't be doing the shopping. The high interest rates of credit cards just screams trouble.. | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 9:32:10 AM | Just for the sake of convenience, I use a credit card that automatically pays all of my bills each month. Then I pay off my credit card each month.
I hate paying interest!
However, if I absolutely must charge something that I can't pay off in full at the end of the month, I usually will have it paid off in 2 or at the most 3 months. I never pay just the minimum amount - never.
I would rather eat butterbeans and cornbread and pay the max on my credit cards.
I am putting every spare dollar into paying my car off ASAP - which will be soon.
After that, I hope to never have to finance another car, although I got 1% interest rate on my present car. Did I mention that I hate paying interest?
From now own, I will put that monthly car payment int he bank and when I want or need a new car, I will pay cash for it. | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 9:44:51 AM |
The interest you paid comes off of your taxable income. It therefore only reduces your income tax by a maximum of 38% of what you paid in interest. (usually not that much...).
To add to that, it is only the incremental interest above your standard deduction that should be considered. Hence the effective tax shielding is even less than what you described.
The real estate appreciates. You get to live in it and later you get to sell it for more than you paid for it. You have to make a very bad choice in a house to lose money on it.
Really? Why don't you tell the people who bought a house within the last 2 years that! They are in a world of hurt and will find that they are significantly upside down on their property. This is the same fallacy that was discussed in 1999 when you could not loose on tech stocks. Same frantic bubble which will have the same outcome.
Stocks and Mutual funds have much higher risk than real estate.
Once again, stocks have outperformed real estate over long periods of time. Average historical growth rates for real estate appreciation is around 5%. In real terms, that average about 1-2%, in other words, it barely keeps pace with inflation. Stocks are averaging roughly 8% which means a 4-5% real return. The benefits of real estate is the leverage you can put on this asset class. Unfortunately, it is this exact same leverage that will bankrup a significant portion of Americans over the coming 2 years. Just watch this party getting started!! | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 9:47:35 AM | | Oh come on people....I am finding this hard to beleive that almost everyone who has posted a response to this subject doesn't have any CC debt? So much for statistics, maybe the poll takers should come on POF because this place certainly isn't the norm. Sorry, to bust the numbers but as a single homeowner who works pay check to pay check and is in the process of getting a 2nd job to maybe afford some luxuries (like food and gas) my CC holds a balance of about a thousand bucks due to out of the ordinary expenses like the car breaking down (that was the latest). Can't wait to see what might happen if the AC unit goes kaput. | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 10:02:41 AM |
In my flat I have beds, chairs, a TV, a PC and DSL connection a fridge, a washer, a good plumbing. I have given away most of my clothes and sold off most of the antiques my parents owned. And I am moving to a country/market where I can max up on my salary or start and operate a small but global successful business! That is capitalism!!!
You sound like my brother, except he also owns a couch. I still have the accoutrements of upper class living, but I do keep my personal expenditures to a small percentage of my yearly income. Doing so allows for the start up of a new businesses, travel, unexpected emergencies -- choices. And while I'm not as pared down as you, my possessions fit in a small condo and could be easily stored or sold if I wanted.
On the whole, I agree that being unencumbered by a lot of material possessions allows for more freedom and the possibilities of doing more with your life.
Oh come on people....I am finding this hard to beleive that almost everyone who has posted a response to this subject doesn't have any CC debt? So much for statistics, maybe the poll takers should come on POF because this place certainly isn't the norm.
I think what you're finding is selective polling. It's not like the OP is approaching random people on the street and eliciting hopefully accurate responses about their credit card debt. People are coming to this thread and choosing to respond or not respond.
My guess is the ones laden with debt do not respond, and the ones who don't have debt do. This is not a represenative sample.
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 10:14:36 AM | As soon as compelling reasoning about why credit card debt is bad was posted ... the ones with obnoxious levels of credit card debt would be scared to post an opposing view.
There's simply no good reason to carry a large amount of credit card debt.
Out of work and wanting to maintain the lifestyle you could (almost) afford while working is not a good reason.
Having to carry $1000 for a month or two due to unforseen car repairs is one thing.
Carrying $8000 on each of 5 cards because you don't have a clue how to manage your money is another.
I know of someone who had $250,000 a year income and got told he needed to declare bankruptcy because of his credit card debt... Thats just stupid. | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 11:23:34 AM | | It would seem to me that right after sex ed and DARE classes in high school there should be a class in understanding money. The marketing folks are relentless and the charging habit is insidious. | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 2:32:02 PM |
The real estate appreciates. You get to live in it and later you get to sell it for more than you paid for it. You have to make a very bad choice in a house to lose money on it. Really? Why don't you tell the people who bought a house within the last 2 years that! They are in a world of hurt and will find that they are significantly upside down on their property. This is the same fallacy that was discussed in 1999 when you could not loose on tech stocks. Same frantic bubble which will have the same outcome. | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 2:37:50 PM | I bought my own house (got bought out of "our" old house by my ex) in 2005 (right after I split from her) for $195,000 right before everything went bat$hit crazy. It's worth $360,000 now, so am I worried about my $4,000 credit card balance??
Not really. I'm paying it down. I could swing it into the mortgage when it comes due but it will be gone by then. THERE. I have a credit card balance that goes month to month. I guess I'm the only one. But I DO have a lot of equity built up in the shack, just dumb luck and timing on my part.
LOL | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 3:38:29 PM | Everyone has their own different point of view about credit cards, automobile loans, mortgages, and miscellaneous debt. Some people are really good at managing their finances and thus never have to worry about debt. As they are always prepared for realistic situations. Whereas, there are millions of people (Not just Americans or Canadians) world wide who suffer with huge debt loads. I myself have an auto loan, a mortgage, and one credit card. I pay my credit card off at least once a month, and I have never once paid my credit card company a cent EXCEPT for bankruptcy protection that is based on the amount that you owe.
My car loan was 0% interest for the entire duration of the loan. So I am saving several thousand that would have otherwise been paid in interest. As for my mortgage, it will get paid down in due time. However, IF you are responsible and aren't or WEREN'T stupid enough to live way outside your means, (IE such as the current situation that hundreds of thousands of Americans and some Canadians now find themselves in) then using your credit as leverage can be a very lucrative business in real estate.
I am not going to launch into a spiel about the sub prime markets and as some one in here pointed out "the world of hurt" that so many home owners find themselves in right now either. But as to the initial topic discussion. Depending on the scenario. As students are more likely going to have more credit card debts or student loans than non students who will have auto loans and mortgages. One thing I hope most post secondary education students figure out is never fall into the hands of all the credit card offers that you get so easily pre-approved for.
When I was 18, the bank offered me a pre-approved 1,000 dollar credit card limit because they thought I was a student in post secondary but I was still in highschool. Funny enough, as soon as I mentioned I was only in highschool but I had a part time job, they told me I would have to apply for the credit card. Creditors know students don't have a primary source of income when they are in school and thus continue to lure them into traps. | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 7:27:10 PM | i can't remember the poster's name but he was right on about the real estate market.
new home builders are shitting themselves, people aren't buying. the average length a house stays on the market, at least around here, is 90-120 days. | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 7:32:46 PM | | I pay cash 99% of the time for 99% of everything. If I don't have enough cash with me or not enough money in the bank, I don't buy it! As for others, I don't really care what other people do with their own money or borrowed money just as long they don't drag me into their situation. I will write a check on occasion (to pay my bills) and never do online banking.....do you know how many crooks in overseas countries get all your details and can use your pin numbers that way? Same thing with a phone: I use my landline at home and for most calls. Use a cell only when it is absolutely necessary. | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 7:57:06 PM |
I will write a check on occasion (to pay my bills) and never do online banking.....do you know how many crooks in overseas countries get all your details and can use your pin numbers that way?
LOL, I work for the company that does the majority of the online bill pay and banking in the US (we have 75% of the market share) so I can assure you that that statement is just paranoid. There are way too many security policies in place for that. Why would anyone have your PIN to begin with? And if fraud is committed, well almost all banks have policies in place to protect you with that and it's pretty hassle free. You just sign an affidavit and the money is back. | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 8:12:50 PM | I think it would depend on why they had the debt. For example, do they have a sick parent on the other coast whom they have to visit often as they may be dying any day now, but they can't afford to leave their job, so they fly there often? Or did they have a major incident with their car, couldn't afford to buy a new one, but can't afford to not have the car, so they forked out mega bucks (but less than the cost of a new car) to fix it. What about in the states where you have to pay for your health care and you get in a car accident? If it's just foolish spending, like buying a big screen tv because the new xbox came out or because you need a $20,000 stereo in your car, sorry, not interested.
I personally do use credit cards. The one I use is a joint account with my parents and at the end of the month they tell me how much I spent that I have to pay for (like if I went out one night or something.... textbooks go on there but they don't count) and if I don't have the cash the day the bill comes I have to present them with a reasonable payment plan (I usually have a month to pay it). If I don't stick to it, then they take the credit card away, which actually causes a lot of inconvenience for me, since I have to have them around to pay when I go for a massage (for back problems) or if I go to the dentist or have to buy textbooks or whatever. And I've never had them take the card away so I think I'm doing pretty good. My other two cards, well one was the one I got with my parents before I got the one I use now. I was spending too much money (mostly textbooks and the chiropractor and massages and what not, things they pay for or get money back from the insurance company). It had a fairly high interest rate and wasn't collecting any points, whereas the one I use now give them a certain percentage of all their purchases towards the purchase of a new vehicle. The third I signed up for at a football game to get the free blanket, cuz I was super cold. I totally didn't think I was gonna get it, but they approved me. I've never even used it.
Oh one other thing. I can see myself having a small amount of credit card debt when I move out because I'll have to buy a few things for my apartment, like dishes and a table and chairs, pots and pans, a vacuum cleaner and what not, the basics. Plus that will be around the time I'll be done law school so I'll have to buy a bunch of new clothes (apparently you can't get away with wearing sweats or jeans and t-shirts at a law firm like you can in law school) so there's another thing I HAVE to spend money I may not have on. Unfortunatly it will just be too hard to pay for law school and save up for first/last months rent and damage deposit AND pay for all that kind of stuff. But hopefully that will get paid off pretty fast (as in within a couple months). | |
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| How much credit card debt is acceptable for you?
Posted: 8/30/2007 8:14:59 PM | Zero is the best answer, I have been good about paying my card off, if I used it....Debit is what I prefer! Since that is cash on hand,and I can reserve a hotel room just as easily with the Debit card as I can with any other card...difference is? There is not bill to follow.
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| How much credit card debt is acceptable for you?
Posted: 8/31/2007 7:31:39 AM | | OP, I don't care what someone's credit card debt is as long as they're able to pay it each month and still pay their other bills. I wouldn't expect anyone I married to help pay off any debt I had before we were married, and I also wouldn't want someone who expected me to pay theirs off. | |
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| How much credit card debt is acceptable for you?
Posted: 8/31/2007 8:34:57 AM | Don't get me wrong, longb4now. It's just that I've learned my lesson.
My ex left me with a house payment, $20K in credit card debt.
Been there, done that and don't want to do it again, so I live within my means.
Rent is due, it's right before payday. So guess what I'm having for breakfast, dinner and supper - sweet milk rice for breakfast, oatmeal for dinner and my almost world famous lintel soup for supper. | |
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| How much credit card debt is acceptable for you?
Posted: 8/31/2007 8:44:57 AM |
How much credit card debt is acceptable for you?
Well, since I pay the full amount every month and never carry anything over, I'd say none. I know some people have emergencies and go into cc debt unwillingly, but for most people it's because they're simply irresponsible and spend way more than they can afford. Unfortunately, we live in a "spend now, worry about paying later" society.
But I do my part to stay within budget and save, not that this kind of responsible, thrifty behavior gets me anywhere with women. The very nature of dating stipulates men must pursue/woo women, so of course we have to pay for everything.....and some of you women have very expensive tastes.
Looks like I'll be single forever…lol. | |
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