FINANCES (A Place For Discussion)
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good job Lando, them things are bad news
hopeful you can get a little emergency fund going & some savings now that you have that pesky monkey off your back.
Definitely the plan. Just deposited a nice chunk of change into my savings so yeah, mission accomplished atm.
Yeah…I try to leave behind my CC whenever I'm out and about and keep it at a distance when around the computer. (The act of seeking it out usually deters an expenditure.) They can get you in trouble.
I need to take a page from your book for sure!!!
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Great job, Lando!..
I too have a CC card but I never spend what I don't have… I might go over say 100 €, has happened say 3-4 times since I got it (7 years ago), but in general I only spend what I have...
Definitely a great rule to live by. Luckily some investments panned out and I was able to recover from certain CC death. Won't happen again!
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Good for you LandoCal26. It is too easy to rack up CC debt, and it is a b_tch to pay it off.
In Canada, CC companies are required to provide their customers an estimate on how long it would take to pay off the entire balance if a client only pays the minimum payment each month. For example, with a balance of ~$9500 at a rate of 9% ("preferred" client rate), it would take 83 years and 6 months to pay off. That's an entire life time….... if it is at 19% (normal rate), it would roughly double! CC debts are bad debts, it is best to pay them off sooner rather than later.
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@Omega:
Good for you LandoCal26. It is too easy to rack up CC debt, and it is a b_tch to pay it off.
In Canada, CC companies are required to provide their customers an estimate on how long it would take to pay off the entire balance if a client only pays the minimum payment each month. For example, with a balance of ~$9500 at a rate of 9% ("preferred" client rate), it would take 83 years and 6 months to pay off. That's an entire life time….... if it is at 19% (normal rate), it would roughly double! CC debts are bad debts, it is best to pay them off sooner rather than later.
This isn't necessarily true. CC debt is actually one of the best debts to have because they cannot take anything from you (possibly sue if you owe that much). One of the things I hope most people have learned after the recession is that taking out money on your house (this is what the US goverment tried to push as a much better alternative than credit debt) is the worst thing to do, because they can and will take your house away from you.
If you have decent credit cards, CC debt is easily the best debt to have, except of course second to student loan debt.
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Well, that is one reason, but not the only reason.
I, in fact, consulted with some financial people at my university about consolidating my CC debt (admittedly, it is not much) into a single loan and they advised against it. The actual rates you will get for the loans is not much different from the CC's and they explained it is certainly not good to use equity anymore.
The fact is that CC debt feels bad to the person in debt because they have to deal with it every month (again this is bad from one standpoint, but good in another because you want to pay it off). Taking out equity masks the problem, and as such, you do not have to see it every day. This is why many people ended up going into foreclosure when the housing market went downhill. They put their debt into equity, and when their house was no longer worth what they paid for it, they were put in a very bad financial situation, espeically if you could no longer afford your house.
So in short, other than student loans, CC debt is actually the best debt to have, even if you do not plan to default. In general, I would rather be in the situation where I would have terrible credit and owe money on CCs, rather than worry about someone foreclosing on my house or taking my car. The amount you can charge on a CC is much less than you can accumulate through a loan or equity as well, so you are really limited in the amount of debt you can aquire.
This is my opinon (largely garnered from people in the field), and you do not have to agree.
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owing sucks no matter the terms.
i have tier one credit & get great rates extended my way, so i never really considered would i rather owe type A or type B. i just look at the APR on the CC or loan & decide if i want to do it or not. guess i will give it more thought in the future
**student loans are only good cause you can write them off on your taxes to a certain point & it is considered as good credit because you are investing in yourself
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owing sucks no matter the terms.
i have tier one credit & get great rates extended my way, so i never really considered would i rather owe type A or type B. i just look at the APR on the CC or loan & decide if i want to do it or not. guess i will give it more thought in the future
**student loans are only good cause you can write them off on your taxes to a certain point & it is considered as good credit because you are investing in yourself
With all of your IH Gear I just assumed you were independently wealthy!
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i plead the 5th since no matter what i say
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Actually, any kind of debt (to a degree) is bad in my books. It is all about how much you can actually afford vs. how much you wish you can afford. The housing bubble was based on a prolong period of low interest rates, irrationally optimistic expectations of escalating prices and generally, people spending way too much they thought they could manage/afford. Mortgage (if managed wisely and assuming you are not in over your head) is a means to finance a long term investment, and I think part of the mortgage payment is tax deductible in the US. Same goes for student loans. Credit card debt and/or car loans IMHO are a means to feed an immediate desire to consume, often with no long term value (don't think interests paid on the balances are tax deductible either). Perhaps I am just old fashioned….....
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Housing loans? Check, but make sure that you are able to pay the downpayments even if the interest doubles or triples. (AKA, don't buy out of your league.
Student loans? Check, best way of being socially mobile there is.
Other loans? Not really my cup of tea. I have a credit card, but I just use it to pay for work travels and I get it reimburced by work.
