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98 Comments
- smashblu, on 03/18/2009, -1/+38Being responsible with money takes will power. Just use common sense and you'll never get into debt.
- GregLoire, on 03/19/2009, -0/+20I've been using a credit card regularly for nearly a decade, but I've always paid it off in full every month simply because I couldn't afford to pay interest on top of my regular purchases.
I don't understand people who say that they need to go into debt because they don't make enough money to pay it off each month. It's actually the other way around... If you can afford to eventually pay off all your purchases with interest, then you can more than afford to pay it off in full each month if you make it a habit. It's more about planning and restraint than it is about income.
Plus, if you hate your credit card company for one reason or another, it should give you some satisfaction to know that you're actually costing them money by paying your balance in full each month. You're basically considered a deadbeat, even if your monthly statement contains a "thank you" message for your last payment. - Chompy, on 03/19/2009, -0/+16Can't afford it? Don't buy it.
The end. That's it. - PoizonFrog, on 03/18/2009, -1/+16Our economy is debt based, due to the nature of the Federal Reserve...money is created when an interest bearing loan is made. Thus, the money supply is always less than the debt incurred...
Physical slavery demands that slaves are housed and fed, financial slavery requires slaves to feed and house themselves. - slickmick, on 03/19/2009, -1/+14Wouldn't hurt to get rid of the Federal Reserve. Punishing savers via inflation doesn't encourage saving.
- DirtyVicar, on 03/19/2009, -1/+11Funny how when there's money threads like this, they're chock full of dictactic monologues and "I pay my balance every month".
What you never see is stories from people who maxed out their card on hookers, then were like "oh god, what the hell did I do... my wife is gonna have my ass when she sees this." - keiko61215, on 03/19/2009, -0/+9Look up Dave Ramsey. He is very helpful.
- rodrigo74, on 03/19/2009, -1/+10Haven't owned a credit card for nearly 10 years now, only a debit card. So I just buy what I have money to buy, otherwise I have to wait and save until I can. Best decision I have taken financially, zero debt and I still have all I want.
- NomortaL1, on 03/19/2009, -0/+8seriously... i feel sorry for the people just now saving and then realizing theyre losing money due to inflation
- kalvinb, on 03/19/2009, -2/+10Read the details of 0% offers. With store credit cards you typically end up owing the accrued interest from the day you borrowed the money if the balance isn't paid off by the end of the deal. With real credit cards the rate typically goes to your standard purchase rate and you only start accruing interest AFTER the deal expires. It's a huge difference.
I have quite a bit at 0% with bank of america. It will go up to 7.9% after the deal expires and then start accruing interest. So it's still a good deal even if you don't manage to pay it all off. You still save x months of interest. Usually 9 to 12. Occasionally you can get a low fixed rate until the balance is paid off. I have a pretty low fixed rate already even without special offers.
With a jewelery store purchase if I hadn't paid the card off in 12 months I would have had 12 months of interest tacked on to the principle balance.
The big myth is that debt is bad. It's not actually. Being mildly in debt helps you build credit. You need a lot of credit if you expect to ever buy a house. I don't worry about car, house and student loan debt. Those are more of an investment. Your car gets you to work. That's why I consider it an investment. If your car can't get you to work reliably then it's a liability. Once you have those things then you can stop messing around with credit cards and stop using them.
The big thing is always be on top of your debt. Have a plan and the means to pay it off paying at least double the minimum right now. Not with "future earnings."
Credit cards are the alternative to a pay day loan. You never know what could come up and you need credit cards to cover those expenses whether it's medical, legal or whatever.
Credit cards are a game. If you play it early and well you'll be far better off in the future. The trick is knowing when to stop playing. My rule of thumb is to stop playing the credit card game after you get a 30 year fixed mortgage with a good interest rate. At that point you won and you can stop playing. - wannaBdug, on 03/18/2009, -0/+8Problem is I don't only talk to myself I listen Yikes.
- seattlegirluw, on 03/19/2009, -2/+8Because, donnytomas, some of us have pride and would LOVE to work full-time so we didn't have to live on $881 a month in a city where a 1 BR apartment is $650-700.
And to all those arrogant people who assume we're mooching and not wanting to work... First, there's the pure hassle of bureaucracy. Trust me, between trying to keep all my meds filled (esp with severe fatigue limiting my activities), dealing with doctors, dealing with depression from not working, keeping the government apprised of any and all changes -- plus a few forms to prove that nothing's changed recently, being sick isn't fun. It's sitting around, being bored out of your skull, freaking out about having no money, feeling like crap for not being able to work, and having to deal with ***** assuming we're malingering for these privileges.
I fought for years to try and find things that I could do. Work is important to me. And it's important to pretty much every disabled person I've met/talked to. Most people who you think are just sitting around would love to be able to pull in a real salary. But we have constraints. Right now, it's taxing me to work even part-time (making my own hours) contract work. I'm hoping to slowly work up to something approaching 20 hrs per week.
And healthy people tend not to understand that if you're truly exhausted or sick, just getting to work can use up 50-75% of your physical strength. (Read this -- http://www.butyoudontlooksick.com/navigation/BYDLS ... -- for more info. Best description I've ever seen for what sick people deal with.) Point is, it doesn't matter if a job has you "just" sitting around. If you're exhausted, sitting up can be too tiring, let alone making sure you're at work by a certain time and have the mental capacity to perform useful work. Brain fog is a huge problem when you have fatigue.
And by the way, when you think fatigue, don't think sleepy. Don't think tired. What most people experience day to day -- had a long day, tired and kind of ready for bed -- that's about what I have as a baseline. I never know when my energy will fail. Going to bed, I don't know if I'll actually be able to leave the house the next day. So all plans have to be conditional. There are times that I get so enervated -- say, when I run four or five errands in a day -- that just lying on the couch breathing makes me want to weep with pure exhaustion. I consciously slow down my breath because it feels like so much work just to fill my lungs.
And, like I said, most of the people on disability I have met are frustrated by their limitations. They'd rather have a regular job, something that lets them actually live. Who in the hell would WANT to live on $881 a month? I'm sure there's a few people (an in-law, in fact, who's a ne'er do well) but very few. Disability is unpleasant, and the average case takes 2-3 years. Then, once we finally prove to the government that we can't do work -- that this is absolutely the last thing we want, it's simply our last option -- then we get to deal with entitled people accusing us of faking it, being lazy or otherwise "stealing" money.
Despite your attitude, I sincerely hope that you never get so seriously ill that you have to experience how quickly your life can change. At 19, I had a stomach bug. Three days later, I was too weak to walk unassisted. Three days after that, I was (temporarily) completely paralyzed and on life support (ventilator, heart monitor, feeding tube) in the ICU, where I stayed for 3 weeks. Four months later I finally got out of the hospital, followed by three months of 5-day-a-week physical therapy so I could learn to walk again. By the second month of PT, I could stand up for more than two minutes without breaking into a sweat from the exertion.
But, hey, maybe I was just faking it to get on the dole. - seattlegirluw, on 03/19/2009, -0/+6You don't have to go into debt to get good credit. You can pay off your credit card every month and your credit will be great.
If you want a bigger credit line, well, I've gotten increases about equally, when I was able to pay it off every month and when I was carrying a balance. So I think it's a myth that you have to carry debt to do well with FICO or bigger lines of credit.
You are right that all debt isn't bad though. Mortgages (non-sub-prime) are good. Many would argue that student loans (up to a point) is a good reason to go into the red. - AmyVernon, on 03/18/2009, -0/+6I'd say you're likely the exception to the rule. Most people I know with lots of credit card debt did it to themselves, including me in the past. Fortunately, I never got more than $2,000 or so, but I had a friend $20,000 in debt for no good reason.
- zotbar1234, on 03/19/2009, -0/+6Because the legislation may give you additional rights/advantages.
For instance, Norwegian legislation (kredittkjøpsloven) states that if the seller is unwilling to repair a faulty item bought on credit (which includes credit card purchases), the buyer can legally forward the claim/complaint to the credit issuer. In other words, instead of facing a person, a seller would suddenly face a bank (with its own legal department and willingless/ability to push the matter through the legal system).
Furthermore, if one uses a credit card and becomes victim of a fraud, one has not actually lost any money until the bill is due. In my bank that is between 3 weeks and 45 days. With a debit card, the money is transferred immediately, and although the bank will reimburse me (unless I am grossly negligent), I might have to go without the defrauded sum for a few days. In other words, for internet purchases, restaurants, taxis and especially travelling abroad a credit card is a far better solution than a debit card.
Naturally, this presumes a working credit legislation, which not all countries have. - dtfinch, on 03/19/2009, -0/+6I've never felt a strong need to get a credit card. Though if I ever had to dispute a charge, it'd probably be easier with credit than with debit.
But one of my great phobias is someday living from paycheck to paycheck, barely making ends meet, a slave to my debt, paying far more interest than principle. - mashupXXL, on 03/19/2009, -0/+6As I heard the great Dave Ramsey say one time, something along the lines of "save the money now, so you have lots to spend later."
Basically you can't build true wealth without being out of debt. Debt is evil, avoid it like the plague! - seattlegirluw, on 03/18/2009, -0/+6Well, that's all well and good to say, as an able-bodied person. What about people with health conditions that keep them from working full-time -- or at all? They still have to pay bills, often they also have to afford insurance/medications.
Generally speaking, if you're earning a full-time salary -- even a low-paying one -- you can stay out of debt if you're careful. But most of today's workforce starts out in debt thanks to student loans. Those can also create problems by eating up a good chunk of a paycheck. I had $33,000 in loans and had to pay over $400 a month. - kalvinb, on 03/19/2009, -0/+5A house, a car and an education. The American dream.
- bushout, on 03/19/2009, -0/+5My hooker takes air miles.
- jonnyboyca, on 03/19/2009, -1/+6i work for a major bank in their credit card department.. i think ignorance is the biggest reason people get into CC debt.. the questions that people ask me on a daily basis are astounding.
- hwy9nightkid, on 03/19/2009, -0/+4because modern day adults are children.
- hwy9nightkid, on 03/19/2009, -0/+4hey bro, maybe you need to see it's an example..
besides why put $2000 on a credit card .. those days are over.. the days of easy credit, and low APRs is over. - inactive, on 03/19/2009, -0/+4No, interest rate is the result of inflation, not the cause of inflation. Increase in money supply cause inflation (more money chasing the same amount of service and goods). The federal reserve just increased our money supply by 1.2 Trillion dollars yesterday, THIS WILL CAUSE INFLATION. The federal reserve is so afraid of people finding out the truth, they stopped reporting M3 since 2006 (M3 is a critical measure of money supply).
- SJZero, on 03/19/2009, -1/+5Homes are almost never investments.
When you buy a house, you have to PAY every year to maintain it, and you pay taxes for the privilege of owning it. When you buy a dividend-paying stock, by contrast, they pay YOU to hold it. That's why dividend paying stocks are investments, while housing is not.
This might be ok if house prices over time shot up, but except for the bubble, they don't. House prices barely keep ahead of inflation.
More importantly, the fundamentals don't exist to make them a good investment. Houses are constantly being built, but the population in the first world is dropping, not rising. Why would housing get MORE expensive as demand falls and supply rises? - smashblu, on 03/18/2009, -0/+4There are always exceptions to the rule. I was just generalizing my comment.
- seattlegirluw, on 03/19/2009, -1/+5I actually just wrote a post about how I'm not sure our economy should be saved, given that it's really only "booming" when we're going beyond our means.
Of course, I also don't want to watch the carnage of an economy in free fall...
So I suppose there's no real solution here.
On the chance you want to read the post: http://ipickuppennies.blogspot.com/2009/03/should- ... - mikemil828, on 03/19/2009, -0/+3That's it? No naive stinging riposte about how no one should have debt ever, not even to buy a house, and that instead folks ought to save for 20-30 years so they can buy a house for 5% less. No condemnation at me for "being an agent of the financial division of the New World Order". No intense examination into my perceived sexuality. Just *****?
Man diggers are getting boring. - smashblu, on 03/21/2009, -0/+3lol @ "wtf?? I have to pay back the money I borrowed with interest, just because I signed terms saying I would?!" That is exactly what my friends and I say about people like that!
Anyway, you're right, the bulk of the credit card companies' money is made from interest but I guess I was just getting at that they still make money from merchants. If everyone started paying their balance of every month it would definitely hurt their business. But that will never happen so I suggest everyone pay their balance off every month.
As for signing you up for a program like that, I would dump that card. There are plenty of companies begging to get your business (it's almost pathetic with are the cc offers in the mail) that there is no point in putting up with a bad company. Of all the companies I've been with, I'd have to say Citi and Amex are the best with customer service and not badgering you in general. I still would like to think that the company likes you more for not being a deadbeat but I'm probably being naive about that! - borez, on 03/19/2009, -2/+5Couldn't agree more, I got into a credit card mess when I was 18 ( involving court, Bailiffs, the lot ) and since then I haven't touched one.
FTR: It's easy to say: "Oh I'll be OK if I keep paying it off at the end of the month" Which is fine if you keep your job, and this is exactly what's just happened to a mate of mine. After 15 years of the same job his company went bankrupt before Christmas, no payoff, no redundancy, nothing. He's gone from being a well off, hard working, totally secure family guy to a complete up to his neck, drowning, debt ridden mess with no way of recovering and it's only March. All because he had shifted his wages one month ahead via a credit card.
Those things are bad news... Period. - kenelbow, on 03/19/2009, -0/+3I second that. I've been on the debt snowball plan since the beginning of the year and it feels great to watch my debt disappear.
- borez, on 03/19/2009, -0/+3Mirror:
http://74.125.77.132/search?q=cache:http://blogs.m ... - kefkaantakrist, on 03/19/2009, -0/+3You usually have a month or so to pay off whatever you bought before it will begin to accrue interest.
But to get at the heart of the question: suppose your balance at the beginning of a month was $200 and you are not in your grace period. You pay $5 per day in a magical 38-day month (we'll call it Exampluary) and so you end the month with a $10 balance.
Your interest is based on your average daily balance, which would be (200+195+190+185+...+10)/(38) = $105.
So if your interest rate is 10% annually, your interest for the month is $105*.1/12 = 87.5 cents. - davideparker, on 03/19/2009, -0/+3o how unusual a broken link on digg
- blackgt93, on 03/19/2009, -3/+5You got it half right.
Houses are investments, cars are VERY RARELY ever investments. - AltF3, on 03/19/2009, -1/+3I thought the American dream was a discotech in Vegas
- TheFamousOne2, on 03/19/2009, -0/+2and the biggest lie of them all? "Oh, yeah I have enough money for this!"
- mikemil828, on 03/19/2009, -0/+2//I'll pay it off after graduation. This is perhaps the most insidious credit card lie of all.//
Not really a lie, I did eventually pay off 3 grand of debt after graduation. If you are in considerable debt, all you need to do is have a decent plan for paying off your debt while getting by, and stick to it until you get rid of it, that's all.
Anyway all the internet tough guys who say that they won't have a credit card and never will, may want to think again, it'll be hard to get a home loan if you have absolutely no credit history at all. By having a credit card and paying off the balance every month you prove to creditors that you can handle debt and won't be all the big of a risk, which would be handy once the time comes to buy a house. Debt, like alcohol in moderation isn't that bad, and could provide some benefits, excessive debt, like alcohol is hazardous to your health. - bri719, on 03/18/2009, -1/+3oversimplification but yeah there is a lot of common sense and will power involved.
- MtheoryX, on 03/19/2009, -0/+2There's a joke about swiping your credit card in a hooker's ass crack floating around here somewhere, I just know it!
- MtheoryX, on 03/19/2009, -0/+2They won't care. They can take the profit from you (albeit much smaller) and reloan that out to someone who will just milk it along for 30 years. Win for them.
- MeatPlow, on 03/19/2009, -1/+311. Wives always tell the truth.
- uhpaulo, on 03/20/2009, -0/+2A little long, but very well put.
- stoanhart, on 03/19/2009, -0/+2Well, even if you pay your mortgage in 5 year (one or two seems excessively optimistic, unless you are buying waaaay below your price range) they've made some profit off of you. Not as much as they want, but they still charged you interest 12 times a year for 5 years.
- MtheoryX, on 03/19/2009, -0/+1"You usually have a month or so"
Ah, they get ya there too. It actually ends up being between 15 and 20 days that you *really* have what with their finagling with the difference between when the period ended, you got the bill, they got the payment, the payment was processed, and the payment was posted.
Don't assume you have a month... you don't. You can rely on the online billing to be a bit more accurate, but it's still a pain to figure all that ***** out and not get busted with all the interest for being a day later than they expected. - chaosatom, on 03/19/2009, -1/+2All the stocks are wasted that people have invested in the companies, and it was a major source of income for people.
Now it's harder to pay off debt. Even continuing like a year of college after the B.S degree seems like a big risk because you miss out on money in time of need. - MtheoryX, on 03/19/2009, -1/+2"Debt, like alcohol in moderation isn't that bad, and could provide some benefits"
*****. - inactive, on 08/07/2009, -0/+1o how unusual a broken link on digg
http://www.manifestmoneytalks.com/business-credit- ... - afruff23, on 03/19/2009, -0/+1@PoizonFrog
I didn't make any strawman arguments. You put forth the statement that nationalization would stabilize private institutions.
Here's where you said it:
"I would like to see a full collapse of insolvent financial institutions and see them permanently nationalized, so that they serve as a more stabilized counterbalance to the wildly fluctuating private institutions." - smashblu, on 03/20/2009, -0/+1It doesn't hurt the credit card companies to pay your balance every month. And hating credit card companies is stupid and childish. That being said I agree with GregLoire 100%.
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