Are you in credit card debt?

[pinkstars]

I am not. I'm in my early-mid 20s and only have one credit with a very small limit. I usually use it around holidays(I know I shouldn't, but I really enjoy getting gifts) and then I pay it off after that. Otherwise, I really try not to use it. BF and I have a car loan together, but we're paying pretty much double the monthly payment each month. We really don't want to pay on it forever.
BF and I are considering getting a credit card to use for regular purchases and then paying it off each month. He doesn't have any credit besides our car loan, so we both think it'd be good if he started building it up in some way.

 

[lknvrb4]

We have debt. And we still buy stuff. And we finance stuff. This area of the Midwest is paycheck to paycheck, no ifs ands or buts, unless you come from money or you are a Dr/lawyer/farmer (especially farmers) etc.

We have the house, which we refinanced last year to side and get new windows. Needed to be done-the wind actually *blew* into our house thru the windows and the studs etc showed on the outside of the house in the winter. I think $42,000 on the house.

One cc is interest free for 3 years if what we bought is paid off in that time. We have $600 and 1 year left on it. That's how we bought the big screen.

Our other cc has..$2300 I think. And yep we carry a balance and are stuck w/interest every month. It *used* to be paid off in full every month..and then the kids came and JD's hours were slashed to the point that we qualified for welfare and refused it, his truck broke down several times, things happened to the house and bad decisions he made 20 years ago reared up and had to be taken care of. We'd get $500 in savings, and $900 would happen to the truck. Things like that. I used to sit and just think "Seriously, is this a fricken JOKE? Are we on some secret tv show designed to kick average joe blow in the teeth every time he gets his head above water?"

We owe just under $3000 to the hospital for medical bills for 2 surgeries, xrays, ct, mri's etc. No interest on that.

Thankfully, I work for our Dr. and all 4 of us get free medical care in the office.

We owe about $6000 on JD's truck, and $3000 (tho, I want to say it's more like $1500 now I can't remember) on a personal loan we had to take out to shingle the house.

We've got debt and we'll deal with it. It's not as bad as some people's and worse than others. I don't know what the average couple's debt is.

So true for the midwest, I live in Illinois. We do have some credit card debt because when my husband first moved out here the first job he took hardly paid anything. He was used to working for his father who has a very successful business in Ohio. Moving out to the middle of nowhere has limited his ability to find a good job. He has a much better job now but is looking for something to call his permanent home. We are paying it off and hopefully never go that route again but in desperate times you do what you have to do, it's just the way it is.

 

[artdecogirl]

I do, we did not for a very long time and had nice savings but then DH was laid off for almost a year and that all went and we had a trip to Ireland that I charged and have not paid off, we also have student loans, he has been back at work now for 2 weeks and it is very hard to not go shopping! But I know we have to pay off the credit and get a cushion back, it is nice that all of his paycheck can go towards that since we have gotten used to living a more frugal lifetyle.

why take the trip if you guys have so much debt?

I guess I feel like it is not a lot of debt, we already had the trip planned with friends and I felt like 4 grand on a card is not too bad, we do not carry car loans or any other debt aside from our mortgage , year 12 of a 15 year loan and have under 5 grand in student loans, I feel like we are in ok shape and if you compare us to most people I know we are in better then ok shape not that it validates using the card but It will be paid off before the interest kicks in and would have been wether DH was working or not and that is the biggie to me, we actully used some savings to pay for some stuff for one of our adult children so they would not pay a high interest rate instead of paying our own credit card bill. I will tell you even if I had to pay interest on credit I would do it again in a heartbeat (vacation), Loved it!!!

 

[steph72276]

No, we are debt free except our mortgage, which should be paid off in about 6 more years if all goes as planned. I came out of college with some because I paid for pretty much all my own expenses and there is only so much 2 min. wage jobs can pay for. Then when my husband and I got married, we fell into the trap of immediately buying a house and furnishing it right away even though we were both just starting out in our careers. We would do lots of the zero interest for a year things, which is a bad mentality to have (the I want it now, pay for it later kind of thinking). We started listening to Dave Ramsey a few years ago and decided he made a lot of sense in his thinking. Why have all this debt and basically just send your paycheck back out to creditors as soon as you get it? So we got really strict with our spending, came up with a budget every month, and lived off way less than we make. It took just over a year and a half until we paid off every single thing we owed expect our mortgage. Now we are on track to have that paid off in a few years and possibly look into buying a beach condo to use as rental income. We continued to keep a budget after we paid everything off to build up a sizable savings so we don't have to use credit for anything. We do have 1 card to use for when we book hotels since they like to put big holds on the card in case of damage, but that is it. I don't like the idea of using cc all the time to get the points, it has been proven that people spend way more then they would to chase these points. We would never be able to do all the things we can do now if we had to pay creditors every month. Getting on a good financial plan that includes paying off debt, savings, and investments was the best thing we could have done for ourselves. We have already started to teach our 5 year old about savings/spending and hope to pass down the same mentality we now have instead of the instant gratification most people are used to.

 

[Lynnie]

No CC debt for us. I had about 4K in CC debt after college, but paid it off quickly. We only use the CC for traveling, really.
The only debt we have is the mortgage, and we finally bought a car, and financed 12K of it. We hope to have it paid off in 2-3 years.

OMG... whoever wrote the story about the car dealer! When we were there, there was a couple there that were trying to finance a car. The guy was telling them that he couldn't get them a rate better than 13%, and he was trying to tell them that it was a 'pretty good rate'. Car dealers are slick ones!

 

[RaiKai]

I do have debt on my credit card, about $2K. I should have it paid off my December this year though, and I don't use it to buy anything more on it.

Additionally, I have about $50K as a mixture of student loans, and student line of credit debt, from law school. And that was after getting about $25K in bursaries and scholarships! Until I went back to law school at 26, I had basically been debt free (aside from a mortgage).

And, I also have a car loan of about $15,000 left. People can say what they want about how they would rather pay cash for a crappy car, but I did not even have a crappy car until I was 26 as I used public transport, or rode my bike, or walked everywhere. I did my time! Then I had two crappy cars in a row (I needed a car when I went back to school due to commute and to get to work right after class and so on), and they were constantly breaking down and having issues - and that was costing me a heck of a lot. For my current job I need a reliable car, I have to drive on the highway long distances in many conditions (including winter), and I needed a car that I could trust in those conditions, on those roads, and that I would not have to spend on repairs. There is peace of mind in having a warranty, and a new car, at this point in my life.

Much of my debt (outside the tuition part) came from when a former common-law relationship ended. I was still in law school at the time, and it put me into a bit of a tough spot as my cost of living increased, while my salary from my part time job did not (and my time to take more hours did not increase either with law school!). Even while I was living common-law I was responsible for my school expenses and half the mortgage and living expenses, but when we separated my living expenses increased as I was no longer sharing them, as did my home expenses.

DH had about $10,000 line of credit debt from his own previous common-law separation, but he recently paid that off with some RRSP's he cashed in. He does not have any debt on his personal credit card.

DH was also off work for about a year, so it stalled some of my repayment.

We have a joint credit card, but we do not carry debt on it. We use it for groceries and gas as we get 1-2% back, and then pay it off immediately.

We also have about $100,000 in a locked in retirement savings from his previous career, which we cannot touch and we have invested.

Both of us are former homeowners, but we are currently renting, so no mortgage.

Anyway, we can manage our debt at this point, and we are repaying it. Not that quickly right now, as being just out of law school my income is not incredibly high at this point, but we will get there. I do not like having debt. As I said, I was debt free for many years, but at the same time, it was a necessity for me in going back to school as well as a bit of a life hurdle that came when I went through my common-law separation. We do still buy things rather than put it all against debt, but we do not go over board by any means. For example, right now our vacations are spent doing road trips, and I have not bought myself new clothes in 2-3 years! We are still living within our means and we will get there.

 

[katamari]

Credit card debt is not necessarily a bad thing. Sometimes people need to borrow from future earnings and, when used responsibly when repayment is certain, there is no hard to some credit card debt. I have gone in and out of it throughout my 20s and 30s for this reason, but always did it very responsibly and successfully got out of it. The danger, of course, is if something financially changes while you are getting in debt, and that could be certainly be a recipe for financial disaster. However, to just look at all credit card debt as bad, IMO, is an over-simplification.

 

[stephbolt]

DH and I have a decent amount of CC debt. He lived off his cards while he was in law school and did some splurging on tv, furniture, etc when he graduated. We are working to aggressively pay the debt down right now. I was raised to never carry a balance if possible but I've been very lucky in my circumstances that I've never been put in a place where I couldn't afford my basic needs. DH has made me see that credit cards aren't as evil as I thought. I will still be thrilled when they are all paid off though!

 

[les12]

No, we don't have any debt and never have. We were lucky enough to get scholarships to school and had help from parents as well. I think it's important to save for your children's education so that they don't have to start out with debt from student loans, etc. I've never had a credit card so I have no credit but my husband and I have all of our bank accounts combined now and he will use the CC and I'll use the debit card and I will pay his balance each month. This is the best method for us because we're on a budget, know who's spending what so there are no surprises at the end of the month. We just got Dave Ramsey's total money makeover book. I know not everyone is a fan but his ideas are simple and common sense. We are going to be using the CC but we'll use it responsibly. We're saving for a downpayment at the moment and hope to purchase a home in about a year.

 

[Dancing Fire]

Credit card debt is not necessarily a bad thing. Sometimes people need to borrow from future earnings and, when used responsibly when repayment is certain, there is no hard to some credit card debt. I have gone in and out of it throughout my 20s and 30s for this reason, but always did it very responsibly and successfully got out of it. The danger, of course, is if something financially changes while you are getting in debt, and that could be certainly be a recipe for financial disaster. However, to just look at all credit card debt as bad, IMO, is an over-simplification.

borrowing from a "loan shark" isn't bad ?

 

[Dancing Fire]

DH and I have a decent amount of CC debt. He lived off his cards while he was in law school and did some splurging on tv, furniture, etc when he graduated. We are working to aggressively pay the debt down right now. I was raised to never carry a balance if possible but I've been very lucky in my circumstances that I've never been put in a place where I couldn't afford my basic needs. DH has made me see that credit cards aren't as evil as I thought. I will still be thrilled when they are all paid off though!

you need to talk some sense into your DH's head.

 

[ksinger]

Credit card debt is not necessarily a bad thing. Sometimes people need to borrow from future earnings and, when used responsibly when repayment is certain, there is no hard to some credit card debt. I have gone in and out of it throughout my 20s and 30s for this reason, but always did it very responsibly and successfully got out of it. The danger, of course, is if something financially changes while you are getting in debt, and that could be certainly be a recipe for financial disaster. However, to just look at all credit card debt as bad, IMO, is an over-simplification.

borrowing from a "loan shark" isn't bad ?

I agree with Katamari. Oversimplification, as most characterizations of good/bad with nothing in between usually are.

And I have to say, I'm truly amazed that a simple yes/no question about whether you carry credit card balances (which is nobody's business in my opinion) has netted to what amounts to total breakdown of income, debt level to the dollar amount, what the debt is for, and rationale/justification for all said revelations. Some of you guys are sure a bit more trusting about revealing such info all in one place than I am. I guess I'm old-fashioned....

 

[lilyfoot]

Credit card debt is not necessarily a bad thing. Sometimes people need to borrow from future earnings and, when used responsibly when repayment is certain, there is no hard to some credit card debt. I have gone in and out of it throughout my 20s and 30s for this reason, but always did it very responsibly and successfully got out of it. The danger, of course, is if something financially changes while you are getting in debt, and that could be certainly be a recipe for financial disaster. However, to just look at all credit card debt as bad, IMO, is an over-simplification.

katamari, I am not trying to jump on the bandwagon here, or be argumentative, I'm actually really curious as to what you mean by a couple of the statements you made. When I think of "future earnings", I also think about the reality that those earnings might not be there the next day (i.e., you lose your job, your ex stops paying child support, whatever the case may be). I don't understand what you mean by "when repayment is certain". How can you be certain that you're going to have enough money in the future? Also, when you say you went into debt "responsibly", what does that mean? How can going into debt be done responsibly?

I'm really sorry if there is any bad tone which you are picking up from my post (I know how often that happens here), I promise I am merely curious about what you mean. And yes, I have been in credit card debt before, and we currently have 2 car loans, so I'm not trying to be preachy or anything! I'm just wondering if maybe you can further elaborate on your point of view, so I can better understand what you mean. Thanks

 

[ksinger]

Credit card debt is not necessarily a bad thing. Sometimes people need to borrow from future earnings and, when used responsibly when repayment is certain, there is no hard to some credit card debt. I have gone in and out of it throughout my 20s and 30s for this reason, but always did it very responsibly and successfully got out of it. The danger, of course, is if something financially changes while you are getting in debt, and that could be certainly be a recipe for financial disaster. However, to just look at all credit card debt as bad, IMO, is an over-simplification.

katamari, I am not trying to jump on the bandwagon here, or be argumentative, I'm actually really curious as to what you mean by a couple of the statements you made. When I think of "future earnings", I also think about the reality that those earnings might not be there the next day (i.e., you lose your job, your ex stops paying child support, whatever the case may be). I don't understand what you mean by "when repayment is certain". How can you be certain that you're going to have enough money in the future? Also, when you say you went into debt "responsibly", what does that mean? How can going into debt be done responsibly?

I'm really sorry if there is any bad tone which you are picking up from my post (I know how often that happens here), I promise I am merely curious about what you mean. And yes, I have been in credit card debt before, and we currently have 2 car loans, so I'm not trying to be preachy or anything! I'm just wondering if maybe you can further elaborate on your point of view, so I can better understand what you mean. Thanks

I'm sure Katamari will reply but here is another take on it:

Did you pay cash for your home? Education? What are these things if not borrowing against future earnings, and quite a bit more into the uncertain future than a couple thousand on a CC.

Think of this: you HAVE to borrow money to farm. Farming has always been done on credit. Are people supposed to not farm because credit is bad? And before credit cards, there were charge accounts at the corner grocery store.

It's all debt, and people do it all the time. Responsibly. Credit cards are not inherently different, they've just made it easier for people to be stupid about it, more mindless. The world has been working on credit for a long time. Learning how to use and what to use it for is the big trick, and some people never learn. That's why it should not be offered in large sums to just anyone as has been done in recent decades, but to people who have a good financial track record. They were NOT passing out CCs like candy when I was in college, trust me.

It's funny. When I went to finance my first new car was back in the day when the rules had not been tightened up yet, and defaults on student loans were very common and still fairly consequence free. I was sitting in front of the loan gal at the bank, and she looked at me and said, "You paid off your student loans last year." I said, "Yes". She just kind of blinked a few times, and said, "That's really not all that common you know", said she. Then it was my turn to blink a bit.

I hear they aren't that nice these days if you default on government loans....

 

[Haven]

No, we are not in credit card debt. We don't have car loans either.
We do have a mortgage on our home and some education loans left though, and that's debt too, of course.

I agree with Kata that looking at all credit card debt as bad debt is an oversimplification. I relied on credit cards to get through college, and as earning my degree was a top priority, the ability to use credit cards was a very good thing for me, in my very personal opinion.

 

[NewEnglandLady]

No cc debt, though I did have student loans for many years.

Each person should do what is comfortable for him/her when it comes to finances. I prefer to be debt-free for peace of mind, so DH and I save to pay cash for luxuries (including vehicles). I also prefer to keep a separate fund for emergencies with about 6 months' worth of expenses. We recently had a string of emergencies while buying our house--emergencies are stressful enough as it is, so it was nice not to have to worry about fincancs while also making a separate large purchase. Now I'm just counting the years until we can get rid of that mortgage...

 

[Ninna]

No but have two mortgages. If everything goes as planned, we might be able to pay off our current home [smaller]

 

[Laila619]

Nope, no CC debt. We have four cards between the both of us, and they are paid off in full every month. Also, our cars are paid off as well, and we do not have any student loans.

 

[somethingshiny]

Also not trying to be argumentative, but farmers do not HAVE to farm on credit. This is another myth. A NEW farmer most likely does HAVE to farm on credit, but a farmer with a good mind, lucky harvests and great ambition can farm on his own dollar thereby increasing his holdings and income in return. Then, when we have a miserable harvest like the last couple years, he doesn't LOSE his farm. He buys the other farmers out and makes a slaying. (I have an ingenious uncle)

Of course, there are many farmers who just lose it all because of one bad harvest and struggle to find work. (I also have an unfortunate uncle)

I don't think that all debt is bad, but I do think that MOST people don't take the time to evaluate their debt before getting themselves into it.

 

[manderz]

I have a little debt, a small cc balance and I'm accumulating student loans, and fi and I have our mortgage, but no car payments. He has no credit card debt that I'm aware of. Our finances are separate, so I could be wrong, but I'm pretty sure. I'm actually pretty proud of us, we've had our mortgage for less that 2 years, and have cut 6 years off the term so far.

 

[lilyfoot]

I have a little debt, a small cc balance and I'm accumulating student loans, and fi and I have our mortgage, but no car payments. He has no credit card debt that I'm aware of. Our finances are separate, so I could be wrong, but I'm pretty sure. I'm actually pretty proud of us, we've had our mortgage for less that 2 years, and have cut 6 years off the term so far.

Wow, that is great! I've always wanted to own a house, but it scares the crap out of me at the same time. We're really hoping to be able to have a subsantial down payment, as well as other savings when we buy a house. It's a big commitment!

 

[Tuckins1]

Nope.
We have no cc debt, no mortgage, and DH's car will be payed off this year... Other than that, I have a bit of student loan debt, but half of that will be wiped out if I stay in my particular area of work for 3 more years... Yay!

 

[ksinger]

Also not trying to be argumentative, but farmers do not HAVE to farm on credit. This is another myth. A NEW farmer most likely does HAVE to farm on credit, but a farmer with a good mind, lucky harvests and great ambition can farm on his own dollar thereby increasing his holdings and income in return. Then, when we have a miserable harvest like the last couple years, he doesn't LOSE his farm. He buys the other farmers out and makes a slaying. (I have an ingenious uncle)

Of course, there are many farmers who just lose it all because of one bad harvest and struggle to find work. (I also have an unfortunate uncle)

I don't think that all debt is bad, but I do think that MOST people don't take the time to evaluate their debt before getting themselves into it.

My hubs, who is a history teacher AND comes from a long line of farm people is both very dubious (to put it mildly) of your assertion, and also very curious just what is being raised by your uncle, and where.

I really was trying simply trying to make a point that credit in and of itself, is not a bad thing. To to hold your uncle up as proof that farming doesn't have to be done on credit, is likely be akin to holding up Bill Gates as the rule, and saying that anyone should be able to be like him, and if they're not, they're either lazy or stupid. There are exceptions to every rule, and for cash crops, obtaining credit and managing it well - and praying for a good dose of pure luck, has been the rule for a long long long time.

 

[missy]

Obviously in today's world we need good credit. Without it you cannot buy a home, or anything substantial (otherwise you would have to pay the total in cash and on a million dollar home that is difficult for most). Unfortunately the abuse of the credit system played a large part in the cause of the recession. People's greed and foolishness combined with an abuse of credit (home mortgages that should never have been allowed) all led to the collapse of our financial system.
I mean, who ever thought buying a home with nothing down was a good idea??

People need to be smart about using credit and IMO you should never finance a luxury item and you should never buy anything you cannot afford but I was raised with the concept of living within (and yes, even below) my means. Today, I see fewer people living by that value and that is a big problem. Of course, the average PSer is smarter than the average person and that is why credit isn't a problem for most PSer's.

So credit per se is not bad but the *misuse* of credit is very insidious and very bad.

 

[somethingshiny]

ksinger~ I'm sorry you're dubious of my post. I never said my uncle is the RULE. I simply stated that it can be done and I know from first hand experience. I live in IL and know several farmers who have been fortunate enough to make really good decisions and be able to farm without credit. My point was and will always be: Making good decisions WITH credit can allow a person to live WITHOUT credit.

My dad went into a terrible amount of debt years and years ago with his farm and lost everything so I know what happens when credit is mishandled as well.

btw- I don't know if you're trying to insinuate that my family is raising pot or something, but my entire family farms corn, beans, alfalfa, cattle and hogs.

 

[hihowareyou]

I have no credit card debt and have never had credit card debt. When I applied for my first credit card at 18 years of age I did so in order to keep my money in a high interest (compounded daily) account for as long as possible. The bank gave me a $3000 limit which I thought was pretty irresponsible of them at the time considering I worked at a supermarket making $200 a week or something.

 

[honey22]

I think the reason that there are not many I am in cc debt replies is the general opinion of the majority of PSers regarding carrying debt. I for one have cc debt but didn't really feel like putting it out there, when there are so many higher than thou and condescending attitudes here.

It's nobody's business how another person decides to spend their money, credit or other. It easy to judge others when you don't have the full story.

 

[Jennifer W]

Honey22, I hope that my post didn't sound holier than thou or condescending - it was just an answer to the question and not intended to make anyone feel bad or uncomfortable.

I should elaborate - the reason I have no debt is that I got in deep when I was in my late teens and early 20s. I was very, very poor, and yet somehow was offered a credit card, which I accepted with enthusiasm. Suddenly, I could buy stuff, so I did. Not smart, not sustainable and pretty nearly ended in disaster. I made regular small payments, but never cleared the balance. That seemed to give me a great credit score, because I got a mortgage not long after, when I started to work in a better paid job. A mortgage that with hindsight, I could not afford. I was very lucky, I was able to head off disaster by selling the property for a very healthy profit then renting for a while, but if the market had been as it is now, I'd be drowning in debt still. For me personally, credit is not now an option for any purchase at all. That's not to say it's a bad thing, as others have pointed out it's necessary and positive in some occupations and circumstances, but it surely is a bad thing for me.

Jen

 

[ksinger]

ksinger~ I'm sorry you're dubious of my post. I never said my uncle is the RULE. I simply stated that it can be done and I know from first hand experience. I live in IL and know several farmers who have been fortunate enough to make really good decisions and be able to farm without credit. My point was and will always be: Making good decisions WITH credit can allow a person to live WITHOUT credit.

My dad went into a terrible amount of debt years and years ago with his farm and lost everything so I know what happens when credit is mishandled as well.

btw- I don't know if you're trying to insinuate that my family is raising pot or something, but my entire family farms corn, beans, alfalfa, cattle and hogs.

As I said, yes, there is an exception to every rule. And it usually has to do with advantageous circumstances as much as making good choices. As you yourself said, one bad harvest at the wrong time, can ruin a farmer who has done it all "right". In any case I find pointing to the rule to be more useful when making my point.

From what my husband tells me, farming in in Oklahoma is not like farming in Illinois, but we'll leave it at that. We've hijacked the thread enough I'm certain.

And no, I was insinuating nothing.

 

[April20]

We put all of our household expenses with the exception of the mortgage and utilities on our credit card. I write the amounts out of the checkbook like they're debits and pay the card off every two or three weeks. We do this for air miles...

I'm a big saver. I have three savings accounts and squirrel away money like mad. I don't like debt and won't buy a large item unless we can pay cash. The debt is just not worth it.