- Mar 31, 2008
*Note to self; Remind son no dating of Chinese girls
Date: 2/22/2009 10:50:26 AM
There have been a few people on here that have said they love to use their credit card for all their purchases, etc. I'm pretty sure there's not going to be anyone on this board that will openly admit they are up to their eyeballs in credit card debt, but the statistics show this is how it is for most people. The average household has over 9K in credit card debt along with student loans, car payments, lines of credit, etc. The average household could also not survive for more than a month if they lost income.
Haven, as usual I should''ve made sure to read through to find your post and then dittoed you instead of writing out my own novelDate: 2/22/2009 3:08:48 PM
It isn''t brain surgery. Spend less than you earn. Pay your bills on time. Don''t buy something if you don''t have the money to pay for it.
We''re the same way - we utilize the credit card like cash and pay it off every month. I got into a world of trouble in college with the cards, and now am INSANE about paying them off!!! We are fortunate to not have any student loans or other debt. We have one card with a balance - but it''s a 0% interest until Jan situation, and it was used to purchase a computer - it''s budgeted to be paid off well before it can start accruing interest.Date: 2/23/2009 9:37:36 PM
Date: 2/22/2009 10:50:26 AM
There have been a few people on here that have said they love to use their credit card for all their purchases, etc. I''m pretty sure there''s not going to be anyone on this board that will openly admit they are up to their eyeballs in credit card debt, but the statistics show this is how it is for most people. The average household has over 9K in credit card debt along with student loans, car payments, lines of credit, etc. The average household could also not survive for more than a month if they lost income.That''s a painful statistic! Yikes!
We fall into the love our credit cards and use them for everyone camp. We basically use them as cash - they''re just a middle man that we exploit for cashback bonuses, etc. Balance is paid off every month (more often on the cards that let us) just like a utility bill would be. I''ve mentioned elsewhere on the board that I didn''t even know that people used them in any other way (ie. as something of a ''loan,'' incurring debt and interest, etc.) until I got to college... I thought everyone paid the balance in full every month like we always did.
I will ''admit'' that we have one student loan in our household (my husband''s) which is always overpaid, and one car loan (again, my husband''s) which is also always overpaid, and no other debt (credit card or otherwise). We have been in the work force for about a year and a half (after college), and could survive for about 4 months if we lost income. This amount goes up every month, of course (it dropped when my husband''s car died last December and he had to go get a new (well, used, new to him) one). I think for two 24-year-olds living in one of the most expensive cities in the US (los angeles), we''re not doing too badly on the debt front.
This is thanks to our parents, both for being a strong safety net (one which we''ve never yet had to utilize) and for instilling good money habits in us.
Date: 2/24/2009 12:01:03 PM
Author: part gypsy
Steph I can''t find it now, but I have read articles stating that people typically spend more money on credit cards than when using cash (10, 20%?). Also when people buy food at McDonalds they have higher receipts when using credit card than when using cash. The explanation is that the pain of parting with the money is divorced from the purchase. In a sense it is easy to treat it like ''free money'' because one doesn''t associate the transaction with spending those hard earned dollars.
It''s was an eye opener for me. I am one of those ''responsible'' credit card users who pays it off each month. It made me wonder, even if I pay it off each month, am I spending more money by putting it on a credit card? I don''t think I do, but there is that possibility. Many of the things I use my credit card for would be very difficult to do without such as Amazon and Ebay payments, I like the credit protection, and my card has cash back benefits (my card pays me!)
I have read that too and I think Good Morning America had a family track their expenses using cash only for a month and they spent significantly less. I do think it''s true that you probably spend more swiping the card than parting with cash, but I am such a numbers nerd, I like to track every purchase and have it in a category so I can see where every penny is being spent. I seem to just blow cash on things like fast food, etc easier than I do if I use my debit card and know I will have to track it. I guess it''s different for everybody.
I do feel if people are surprised by their credit card bills, have trouble paying it off each month, then it''s probably a good idea for those people to go on a credit card fast and simply stop using it. Myself I''m rather debt phobic. I was anxious for the past 3 years or so because I had first a car with payments, and then a heloc for windows. Those are both paid off and I really dislike the feeling of being in debt. Other than my Dad who always dealt in large sums for business transactions, making it all seem abstract to him, it seems like the rest of my family is credit phobic as well, that''s just the way we are all are. for example although my sister has been unemployed since September she is not in debt, just living extremely frugally until she has money coming in.
Date: 2/24/2009 2:18:10 PM
The real problem isn''t credit cards, but a bizarre sense of entitlement many people have. Somehow the ''norm'' for todays 25-35 year old couple has become two new cars, a 2500sqft house, and $200+ handbags, jeans and sunglasses. Being the norm has somehow made going into debt to have these things acceptable. It is a crazy, irresponsible notion that has led to all this consumer debt.
Like many people here, I use my cc all the time for the convenience, insurance benefits and frequent flyer points. But I pay it off in full at the end of the month. I also put away savings every month. Maybe once a year I find my cc bill is so large that I have to eat into those savings. That is the only reality check I need to curb my spending the following month. If you can''t pay off your bill each month, you are not living within your means. Not living within your means during isolated periods of hardship is one thing, but creating an ongoing lifestyle that relies on it, is really short sighted.
I have always managed to live within my means by not buying into any societal notions of what I ''should'' buy or spend my money on. We own a small 1100sqft townhouse in the city centre that cost as much as a 3000sqft house in the suburbs. Yes, some people think we are crazy, but living where we do saves us $ as we can walk just about everywhere, eliminating the need for a car (or gym memberships!). With the money we save by not owning a car, and the frequent flyer points we get from using our cc, we take overseas vacations each year. These vacation make the same people who think we are crazy for living where we do, very jealous.
Ding ding!Date: 2/24/2009 6:43:21 PM
Steph, I imagine the disposable income is a little higher on here than in the general population which might explain the ability to be disciplined and pay of the card every month.
I am another who pays for EVERYTHING on a CC and pays it off in full every month. We have not had a car loan for over 20 years. My hubby has a used car and a truck, and I did get a new Subaru Outback last year. But we paid cash and got a modest car as opposed to getting a loan for a Lexus. We also paid extra on our mortgage principal and paid it off early. We live off my husband''s income and use mine for savings and extras.
We are now considering moving to a nearby town, and it is a real dilemma to decide whether to get a mortgage in order to get a newly built home with some special features we might want or whether to just make a fairly lateral move to stay totally debt free. In any event, we certainly won''t buy the house we''d qualify for since we have no intention of making small mortgage payments longer than maybe 10 years at this point. It is a phenomenally great time to buy, though!
There is great freedom in being debt-free and having savings and investments. We have everything we need and a few luxuries. But I also do not buy $1000 purses and $200 shoes. I just don''t care that much about things like that, whereas I''ll spend on jewelry occasionally since that can be an heirloom. That''s the way I justify it, anyway!
(Just wanted to add that I first learned about the benefits of living debt-free from Larry Burkett who promoted much of the same things as Dave Ramsey.)
Date: 2/22/2009 10:26:10 PM
You remember the video?! Did you hate it as much as I did? I thought it was the most horrible thing to have to watch. Those poor tortured, sweet-toothed kids! My family still makes fun of me about it, because I was so disturbed I called home terribly upset about the marshmallow-torture video. (I'm a closet softy, what can I say?)
I do see the connection, though, between instant gratification and financial security.
DH listens to him on the radio and always comes home with new ideas lol. Right now we are paying off our credit cards and plan to never use them again... 2 down, 2 more to go! We''re also hoping to pay cash for any future cars but probably not for a house. We have a monthly budget that we stick to exactly or come close to every month. One of our main expenses every month was food. We ate out a lot! Now we have cut back tremendously and try to only eat things like Subway, etc if we DO have a meal out. Last night we had Italian takeout because I had a bad day and needed a carb fixDate: 2/21/2009 10:41:36 AM
So another thread got me thinking about starting this one. I''m not sure if ATW is the right place to start this, but it seems appropriate given all the talk about the economy. My hubby and I have become huge fans of Dave Ramsey and have been following his plan for the past few years. Put simply, his plan is to pay off all debt except the house, save 3-6 months in an emergency fund, put 15% of your pay into investments, start college fund if applicable, then pay off remaining amount on mortgage, and lastly give to the causes of your choice.
Does anyone else live this way? Not necessarily on Dave''s plan, but not using credit cards for anything or paying cash for cars? If so, do your friends/family think you are weird for living like this? I''ve gotta tell you, my friends and family probably thought I was a weirdo for doing a monthly budget and paying cash for cars instead of having a note, but right about now, that plan is looking pretty smart. We actually get to keep our paycheck rather than having to send it right back out to credit cards and car payments. Anyone else in this boat? Want to share any tips on what you did to make it work? Our biggest wasted expenses were on food every month. I totaled it up one time, and we were spending $2500 a month on dining out and going to Whole Foods. That''s more than some people bring home in a month! Now we spend about $500-600 on both. Being on a written budget every month has helped us see where the money is going every month. My fave quote on money is that if you don''t tell your money what to do, it will go away. So true!
Date: 3/11/2009 5:08:59 PM
She then tells me that she cannot accept that amount in cash and that I could open a Macys card. I told her very nicely that I won't be buying them on principle that they penalize people using cash and that it was too bad they lost a sale, because I was the only one in the department and it looked like they could use the business. What a shame that they do this so that people will use their card and hopefully for them won't be able to pay it off so they can collect the 21% interest
That is just plain tricky. It is sooo important these days to read all the fine print. So annoying how they sneak those things in.Date: 3/11/2009 5:28:50 PM
No credit card company has ever received a penny of interest from us (and we charge for everything), however the new ones keep on coming into the mail! This is driving me crazy!
DH recently purchased a ATT phone and is expecting a rebate, guess how the rebate was delivered? on a ATT credit card!! We can not even use the rebate UNLESS we use this brand new ATT cc that was automatically opened on his behalf! That is just plain rude and tricky!