FINANCES (A Place For Discussion)
-
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.
-
-
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
-
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!
-
i plead the 5th since no matter what i say
-
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….....
-
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.
