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Credit card debt

YadaYadaYada

Ideal_Rock
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Feb 2, 2016
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5,928
I read an article recently that the average household carried $15,762 in credit card debt in 2015. So that got me thinking if that is really the average or not. I can honestly say I was surprised by our number which is $6,438.62 on our one credit card that has a balance. I'm not happy about it but it is what it is for now.

So what is your number?

Does the amount of debt you have make you uncomfortable or are you okay with it?
 

Queenie60

Ideal_Rock
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Joined
Sep 15, 2014
Messages
4,277
We simply use our credit card for convenience and pay it to a zero balance at the end of the month. We do not run up a large balance. Use for gasoline and other such things. Also, we like the airline points we receive from using the card.
 

mary poppins

Ideal_Rock
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Joined
Apr 10, 2010
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2,561
0

We systematically use our credit cards for the various benefits that accrue (discounts, cash back or travel rewards) and pay the balances in full every month.
 

PintoBean

Ideal_Rock
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Joined
Jul 27, 2011
Messages
6,379
We use our discover cards (for points!) wherever we can pay credit (food, gas, pet supplies, etc), and pay off in full monthly. Then we take our discover points and redeem them for GC's for birthday, holiday and other special occasion gifts. :dance:
 

Niel

Super_Ideal_Rock
Premium
Joined
Jul 23, 2012
Messages
18,853
My husband and I don't have credit cards so 0
 

chrono

Super_Ideal_Rock
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Apr 22, 2004
Messages
37,367
We use ours for the cashback bonus and pay it off in full every month.
 

telephone89

Ideal_Rock
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Joined
Aug 29, 2014
Messages
3,816
$0.

I use my CC for everything (except Costco), but pay it off every month.
 

Puppmom

Ideal_Rock
Premium
Joined
Jun 25, 2007
Messages
3,160
None now but that wasn't always the case. At one point near $10k but we paid it off about 10 years ago and don't use credit cards now unless it's an emergency. I would love to use one for the cashback etc. but I always have that worry that it'll get out of control. So, for now, emergency only.

We have friends who are getting divorced and we were talking about splitting assets and debt. My friend shared that they have over $35k between the two of them. I could not stomach looking at a bill like that every month. One of the crappy things about credit card debt is it's usually little things that just add up. So you feel like you've got nothing to show for it.
 

amc80

Ideal_Rock
Joined
Jun 18, 2010
Messages
5,765
telephone89|1459786560|4015258 said:
$0.

I use my CC for everything (except Costco), but pay it off every month.
Starting June 20th, you can use Visa!
 

telephone89

Ideal_Rock
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Joined
Aug 29, 2014
Messages
3,816
amc80|1459789325|4015281 said:
telephone89|1459786560|4015258 said:
$0.

I use my CC for everything (except Costco), but pay it off every month.
Starting June 20th, you can use Visa!
WHAT! This will change my life. I hate using debit for anything. I hope this will be the same in Canada!!
 

amc80

Ideal_Rock
Joined
Jun 18, 2010
Messages
5,765
telephone89|1459790394|4015285 said:
amc80|1459789325|4015281 said:
telephone89|1459786560|4015258 said:
$0.

I use my CC for everything (except Costco), but pay it off every month.
Starting June 20th, you can use Visa!
WHAT! This will change my life. I hate using debit for anything. I hope this will be the same in Canada!!
I think it's everywhere. If you have the Costco AMEX, you'll automatically receive the new Citi Costco Visa.
 

telephone89

Ideal_Rock
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Joined
Aug 29, 2014
Messages
3,816
amc80|1459790661|4015287 said:
telephone89|1459790394|4015285 said:
amc80|1459789325|4015281 said:
telephone89|1459786560|4015258 said:
$0.

I use my CC for everything (except Costco), but pay it off every month.
Starting June 20th, you can use Visa!
WHAT! This will change my life. I hate using debit for anything. I hope this will be the same in Canada!!
I think it's everywhere. If you have the Costco AMEX, you'll automatically receive the new Citi Costco Visa.
Hmm Costco up here changed from amex to mastercard I think last year. So it might be different
 

dk168

Ideal_Rock
Premium
Joined
Jul 7, 2013
Messages
5,638
Sep 2010 - Over 10k GBP, plus hefty overdrafts, a personal loan, and a mortgage (total debts excluding mortgage was over 27k GBP).

Feb 2015 - 0 and a mortgage

It was tough going during the 4y+ when I was paying off my debt.

However, I learnt a valuable lesson late in life, and I will not have another credit card again, except for the ones that are pre-paid.

DK :))
 

rubybeth

Ideal_Rock
Joined
Nov 12, 2007
Messages
2,565
$0. I was taught to only use credit cards for convenience and not to carry a balance. We would just use a debit card, but we like getting the travel rewards.
 

diamondseeker2006

Super_Ideal_Rock
Premium
Joined
Jan 11, 2006
Messages
55,631
$0. We also use credit cards with hotel and airline points and charge everything we buy and pay off at the end of the month (we don't use debit cards). We have savings in an emergency fund for unexpected expenses and do not use credit cards for those.
 

Puppmom

Ideal_Rock
Premium
Joined
Jun 25, 2007
Messages
3,160
Just to clarify - by "emergency" I meant things like in the grocery story line and the bank has frozen my debit card for suspicious activity. :rolleyes: We've luckily never had anything else come up that was more than what we had in the bank that needed to be paid immediately.
 

kenny

Super_Ideal_Rock
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Joined
Apr 30, 2005
Messages
28,175
Zero but not zero.

I have good credit so on a major purchase I take advantage of those 48-month zero-interest offers.
Using OPM, other people's money, is good financial planning ... especially when it's free.

But read the fine print; if you miss a payment it's brutal.
The zero-interest party ends and it shoots up to, like, 29% APR ... and get this ... the 29% is retroactive back to the start of the loan even if you were on payment #47 of 48 and had a perfect payment record. :knockout:

I'll bet those folks are pissed!!!!
But really, nobody held a gun to their heads.
They agreed to those terms.
Don't do this if you might miss a payment.

Defaulters might say I'm a jerk and am taking advantage of those who default.
But it wasn't my idea.
 

madelise

Ideal_Rock
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Sep 23, 2011
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5,294
telephone89|1459786560|4015258 said:
$0.

I use my CC for everything (except Costco), but pay it off every month.

Ditto.


Glad to know they accept Visa now though! Get me some points on my Costco shopping!



I think you'll get a skewed response to this thread though. People who have debt don't like to easily chime in and say they do. Also, this is a luxury item forum, where people who post regularly may be better off than the average person. I know people who carry 5 figures of CC debt regularly and don't care. Their priorities are to enjoy the NOW as they are young. Different strokes!
 

chemgirl

Brilliant_Rock
Joined
Sep 16, 2009
Messages
1,995
telephone89|1459790833|4015290 said:
amc80|1459790661|4015287 said:
telephone89|1459790394|4015285 said:
amc80|1459789325|4015281 said:
telephone89|1459786560|4015258 said:
$0.

I use my CC for everything (except Costco), but pay it off every month.
Starting June 20th, you can use Visa!
WHAT! This will change my life. I hate using debit for anything. I hope this will be the same in Canada!!
I think it's everywhere. If you have the Costco AMEX, you'll automatically receive the new Citi Costco Visa.
Hmm Costco up here changed from amex to mastercard I think last year. So it might be different
It's different here. We have the card through Costco Canada and had to switch it last year.
 

Rockinruby

Ideal_Rock
Joined
Dec 27, 2013
Messages
2,740
Anything we put in the cc is paid off to zero balance each month. That wasn't always the case, but we have learned this system works best for us. :wavey:
 

chemgirl

Brilliant_Rock
Joined
Sep 16, 2009
Messages
1,995
We use credit for everything. The points get us a flight every year and a few hotel rooms. We use our Costco MasterCard for restaurants for the higher percentage.

We pay it all off monthly so I guess zero?
 

Haven

Super_Ideal_Rock
Joined
Feb 15, 2007
Messages
13,166
Have you seen this WalletHub report on debt? https://wallethub.com/edu/best-cities-at-money-management/19256/

$0 for us but this wasn't always the case.

My husband and I never had any consumer debt together except for one car loan that my husband took out before we were married. Then, I stayed home on a much longer parental leave than we had originally planned, and my husband's had an unexpected $18,000 business expense right at the start of the extended part of my leave. We used credit cards for that business expense, plus another $6,000 in childcare costs for my son for the summer before I returned to work.

So, in August of 2014 we suddently had $24,000 of credit card debt. That was when I read Dave Ramsey, became a Boglehead, and stopped posting on PS. ;-) But we managed to pay off all of that debt in eight months by April 2015, and we have been on-track financially ever since (replenished our EF, and now we are paying off my final student loan and saving up for the baby I am expecting in September). It was our fault that we found ourselves in such a bad position--we had *just* taken $14,000 out of our emergency fund to pay off the last of DH's student loans when a month later we decided I wasn't going to return to work as planned, and then that extra business expense hit. We should never have drained our emergency fund until I was back at work.

My parents were terrible with their finances, and I always vowed that I would not follow in their footsteps. I was mortified and upset that I allowed us to get into such a bad financial situation, but I am grateful to have found a community of people who helped and supported us as we got back on track.
 

chrono

Super_Ideal_Rock
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Apr 22, 2004
Messages
37,367
My parents are the ones who instilled the no debt mantra in me.
 

Arcadian

Ideal_Rock
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Sep 17, 2008
Messages
7,032
At the moment, about 4k total. I do not pay in full (at least not now) because 2 cards have a zero % rate at the moment and will for the next 8 months. I use paypal credit which I pay off before the 6th month deadline.

I think you can certainly carry balances as long as you are aware of 2 things; your interest rate, and, how long you have if you have for pay off (be it a zero rate or 6 month interest free deadline).

I also regularly ask the issuers for lower interest rates, even on points and cashback cards. The worst thing they can do is say no. Lowest rate I managed to get is 6% on cashback card, the highest is 14, but its still in zero% phase. I also regularly ask for CLI (sometime I just get it because they like me I guess!!) Again, all they can say is no.

I also regularly change cards. Sometimes every couple of years, I will change out some cards because they don't work for me and my situation, or, they may have changed their program and I don't like the changes. Just like they can pick you, you can pick them too.

I think that people really need to understand credit, and statement cutoff dates in order to play the credit game a bit. When I joined myFico boards in 2009, my scores were pretty bad. Not because I did stupid stuff, but because I didn't now how the game was played! So I really paid attention and learned a lot. Love those boards and they helped me learn to work the numbers in my favor.

But still, on occasion I let some things hit and let the banks make some money. Its the reason why they have the darn things after all. My Fico8 scores at least at the moment, range between 797-810. Its true they can be all over the place as they change every month, but you generally know what you've done (or not done) when they take wild downward or even upward swings.

If you're wise about how you use credit cards, its a fantastic tool.
 

Puppmom

Ideal_Rock
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Jun 25, 2007
Messages
3,160
Haven, that report is pretty eye opening. How is it possible that someone has a car loan that's 80% of their income? That boggles my mind. I would have just assumed a bank would not approve that? I guess I can "afford" that Mercedes G-wagon after all. :think:
 

Yimmers

Brilliant_Rock
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Apr 29, 2008
Messages
923
I had a small balance on a card with interest (less than $2k) but just paid it off. I have a card that I am paying off in installments as it is no interest and will pay off within the no interest period. So, $0.

I used to always pay off the balance, but since my husband's lay off five years ago, that always haven't been possible. However, I just cash out extra vacation time (which I really never use given my profession) and pay it off when I have a lot accrued.
 

Laila619

Super_Ideal_Rock
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Apr 28, 2008
Messages
11,608
$0. We do not use cash for anything. Everything is purchased with our credit cards so we earn cash back points, and we pay our cards off in full every month.
 

diamondringlover

Ideal_Rock
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Dec 12, 2006
Messages
3,796
Currently sitting with 8,800 on a credit card :wall: opps forgot about another one...I put my laptop on a card 1 year interest free and it will be paid off long before the year is up.
 

VRBeauty

Super_Ideal_Rock
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Joined
Apr 2, 2006
Messages
10,228
Zero balance on my credit cards - I pay the balance ff in full every month. I am carrying a small car loan right now (I paid about 1/3 cash and financed the rest) but will pay that off at some point after I pass the one year mark. My credit score is good but could be higher, so this is a short-term, strategic debt.

My parents set the no credit card example when I was young. When first started working full-time, I watched a colleague struggle with credit card debt (when she maxed out one card she's open another...) and learned from that. I've also learned from my own mistakes ( :wink2: ) and now use only general-purpose credit cards. No more store credit with punishing interest rates for me!
 

YadaYadaYada

Ideal_Rock
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Feb 2, 2016
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5,928
diamondrnglover|1459804235|4015384 said:
Currently sitting with 8,800 on a credit card :wall: opps forgot about another one...I put my laptop on a card 1 year interest free and it will be paid off long before the year is up.
I was starting to think I was the only one :rolleyes:

We did a few of those no interest for 18 months and they always got paid before we accrued interest but our debt goes up and down on our main card depending on my husband's income. I hoping to have it down to $3,000 by years end, fingers crossed!
 
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