Debt

[magpie889]

In my opinion credit cards are not evil. It is your choice to charge on them! Just have self control! As for student loans you need them so no sense worrying about them. The way I look at it a new car is 30,000 and you pay it off in 5 years so whats the difference with and education? Plus they have less interest.

 

[tonilea]

If you want to pay down your debt, look into Dave Ramsey. It isn't easy, but definitely worth it.

 

[kris1977]

I have no CC debt, but I will say this - loan sharking is illegal for a reason, and CC companies are more dangerous than loan sharks. They loan money with absurdly high interest rates, then have the right to raise those rates on a whim. .

complete and utter rubbish. Loan sharks have interest rates in the thousands of percent. There have been people who owe a few hundreed quid ending up having to pay back 10's of thousands to loan sharks. This is without even considering the threat of physical violence that you can get from loan sharks. There is no comparison between the two and to brand CC companies as more dangerous is rediculous

I wish there was a cap on interest rates - say 5% above prime.

And I wish my house was madse of gold but it isnt. I also wish I had a Ferrari but I dont.

 

[lacrosse_lady72]

I was young. (I'm still young, but I'm talking about being younger) So when I turned 18, I fell for it. I hadn't had a real job (focusing on school) until I graduated high school and I turned 18 on July 2, the first thing I did that morning was acquire 2 credit cards.

Stupid youth decision+part-time job+a lot of time on my hands+friends liking to go a lot of place=the debt ran up VERY fast. I don't even know how many credit cards, through the main companies and store cards, I ended up getting. It was bad.

I understand the draw. It's easy to say "I'll pay it off later". I think the difference is when you'll have that money to pay it off later: if you actually have the money, you're just waiting for the check, or you'll get the money in the distant future.

Luckily, I'm 100% done with that. I have one credit card that almost never gets used and I have my debit card. I had to learn self-control in 1 year when everything came crashing down. Now everything is good but my credit will be tarnished for a long time.

 

[Muushka]

I think that the true problem with debt is that it is not addressed at home and many times not even taught in school.

If debt and saving habits were talked about with children starting in grade school and on into high school, they would be aware of the poor choices that they could avoid. And good choices that they could make.

People become aware of these things after the fact. I wish I had been taught about amortization when I was younger. I would have paid off my house much sooner had I realized exactly how much money I paid in interest. I never had CC debt (not sure how I escaped that one!), but I see so many people today with loads of it just now waking up, when it is too late.

So yes, credit card companies are evil, but I put the blame on parents who did not teach their children. Well, some of the blame. I know that some children (soon to be adults) will do what they want to do regardless of what they know or have been taught.

 

[ZephyrHawk]

I was taught about credit cards, DH really wasn't. When we got together, I worked out his credit issues. I don't think they're evil, just built to take advantage of people who don't pay attention to their own spending. But student loans are an ongoing problem. I meet people who say, "Well, you're both professionals. Aren't you making good money now?" Yes, and our monthly student loan payments approximate our monthly mortgage payments. I tell folks it's like we have a second home we can't enjoy.

 

[Sparx]

I don't know if I would call it evil, but when I was a freshman in college (17) at our orientation there were plenty of banks and credit cards offering college students loans, bank accounts, and credit cards. It was just like what the OP described, no limit, high rates, etc. They do take advantage of these young students who don't understand the contracts they're signing. I also dislike it when I'm in a store and they offer me 30% off or whatever if I apply for their credit card. I don't have a credit card, and it wasn't hard to say no to those people offering me one. But I think a lot of the students signing these contracts don't understand exactly what they're getting into.

 

[Feralpeg]

Rich, you are definitely not alone. Until recently, I used to get at least one credit card offer a week. Crazy!

The thing that bothers me is that credit card companies are allowed to target people with mass advertising and promises of low interest for a period of time. Then, once they've suckered the people in, the rate goes up. Yes, it was spelled out in the agreement, but it all sounds so good. When a person wants to buy a house, they make sure their debt ration isn't too high. Why do they continue to let people have credit cards when they already carry too much debt? I don't get it.

I also hate the fact that they can change the terms of their agreement with a person at any time. Recently, many credit card companies sent notices to people saying that they were gong to raise the rates they charge. It had nothing to do with the person's past credit history with them or anyone else. It was an across the board thing. If you didn't want to do this, your only alternative was to close the account. That was the only way to stay at the lower interest rate.

I closed all but one of my accounts out of principle. I think it is a horrible thing to sock it to people who are down. The economy is bad. Many people are out of work and, sadly, had to rely on their credit cards to get by. It wasn't because they wanted to do so. The credit card companies took this time to hit these people with crazy increases putting many people into the situation of not being able to pay their minimum payment amounts. Prior to the increase, people were able to pay. Immoral in my opinion.

Why is it that banks only pay 4 percent for the money people put in the banks, yet charge 28 percent on their credit cards? Wrong!

Sorry, this is a sore subject with me. I've had some good friends driven into really bad situations because of this sort of thing.

Hang in there, Rich!

 

[Muushka]

Why is it that banks only pay 4 percent for the money people put in the banks, yet charge 28 percent on their credit cards? Wrong!

Sadly, it is more like 0.5%

 

[Disney Doll]

Actually, what is evil is the lack of self-control some people have so that they get themselves into debt.

And there's good debt and bad debt.

Good debt is debt incurred for things that will improve your life...education, buying a home..or things that are needed to live your life...buying a car so you can get to school or work.

Bad debt is debt incurred for things that do not improve your life...that new $200 pair of jeans, a car payment of $600/month because you HAD TO have a BMW instead of the $300/month Honda.

Many people have a hard time telling the difference.

 

[Feralpeg]

Actually, what is evil is the lack of self-control some people have so that they get themselves into debt.

And there's good debt and bad debt.

Good debt is debt incurred for things that will improve your life...education, buying a home..or things that are needed to live your life...buying a car so you can get to school or work.

Bad debt is debt incurred for things that do not improve your life...that new $200 pair of jeans, a car payment of $600/month because you HAD TO have a BMW instead of the $300/month Honda.

Many people have a hard time telling the difference.

True, but not everyone has credit card debt because they had no self-control. Some found themselves in a very bad situation, through no fault of their own, and had to use credit cards to survive. A friend of mine was laid off her job after working for the company for over 20 years. The company cut 700 jobs. She is a single mom and had kids to take care of. Hasn't seen the dad in years. She was trying to be careful and was able to make her minimum payments until the credit card companies raised the interest rate and effectively doubled her minimum payments. Now, she has been to CCS, but will most likely lose their home. Not everyone who finds themselves in a bad situation financially is irresponsible. Some have just had very bad luck.

 

[Hoodie]

True, but not everyone has credit card debt because they had no self-control. Some found themselves in a very bad situation, through no fault of their own, and had to use credit cards to survive. A friend of mine was laid off her job after working for the company for over 20 years. The company cut 700 jobs. She is a single mom and had kids to take care of. Hasn't seen the dad in years. She was trying to be careful and was able to make her minimum payments until the credit card companies raised the interest rate and effectively doubled her minimum payments. Now, she has been to CCS, but will most likely lose their home. Not everyone who finds themselves in a bad situation financially is irresponsible. Some have just had very bad luck.

The financially responsible ting would have been to save beforehand. Hard to do admittedly, but I hear these sob stories and most of them were preventable. We live in a paycheck-to-paycheck society.

And she can thank Congress and the Credit Reform Act for the minimum payment increase.

 

[DisneyBamaFan]

complete and utter rubbish. Loan sharks have interest rates in the thousands of percent. There have been people who owe a few hundreed quid ending up having to pay back 10's of thousands to loan sharks...

And this doesn't happen with cc debt?

To be clear, if you borrow $5k on a cc with a high rate, you will end up paying nearly $40k to pay it back. And that is if you never miss a payment or get a late fee. That is making minimum payments every month on time.

Most "loan sharks" have a 100% vig. You borrow the money, you make payments every week - half goes to repay the loan, half is the vig. Of course, the late fee is a bit scary .

 

[DisneyBamaFan]

...And she can thank Congress and the Credit Reform Act for the minimum payment increase.

This is a very good thing. The old minimum payments were so low that the principle was never paid back. You paid interest for decades.

 

[cteddiesgirl]

I have several credit cards that have huge limits - like over $30,000. I could easily go charge a hundred thousand dollars this month. But it would be incredibly STUPID to do so.

Anybody that does not have the common sense not to incur debt they cannot repay doesn't belong in college - too intellectually deficient. Honestly I knew at least by 12 or 13 that you didn't buy things that you couldn't pay for.

I just don't believe that only being 18 years old is an excuse for spending money you don't ever expect to have.

I went to private schools with huge tuitions and borrowed a lot of money - but I also increased my earning potential with each degree so it was no problem paying back my loans.

You couldn't pay outright for college, so why did you go? Hmmmm...???

Actually, under your criteria, most of the students in college today shouldn't be there. In the last 30 years or so, tt's been fed into the collective society, buy now, pay later. Unfortunately, many people find that they can't pay later for some reason, because of buying too much, because they lose a job, can't get a job that pays them enough or they end up with huge medical bills.

Several years ago, I found myself in that situation due to all the above reasons.

I got rid of all my cred cards and now say no to all offers that I get. I love solely off of what is in my bank account and use cash or my debit card for everything.

How credit card companies are evil is when they make it seem that the minimum payment will ever get you out of debt and when they raise rates suddenly without notice.

 

[arminnie]

You couldn't pay outright for college, so why did you go? Hmmmm...???

The point is DO NOT BORROW MONEY YOU CANNOT PAY BACK.

My salary quadrupled after getting my degree ( and I had the job months before graduation). I would have been stupid to sit around making minimum wage when I could borrow money for 3 years and get that kind of return.

Can just anybody do that? Well no - that's the point. Don't borrow money for something that isn't going to be worth it.

 

[MarkBarbieri]

I don't believe that lenders are evil. Debt can be a very good thing when used properly. Think about other industries. Are candy makers evil because you can eat too much candy and they won't stop you? Are realtors evil because they will gladly sell you more house than you can afford? Except for some special cases, our economic system assumes that both parties in a transaction are acting in their own interest.

With that said, I wouldn't mind seeing a major change in financial regulation. I'd like for people to self select into one of two camps - "financially knowledgeable and "not financially knowledgeable". In the former camp, you are given great autonomy but you are expected to read all the fine print. You can get unusual mortgages (ARMs, balloons, interest only), you can be charged outrageous interest rates, and you get only the protections offered in the contracts you sign. For the latter, you can only get fixed interest mortgages, the interest on your credit cards is limited an regulated, and you are automatically given a lot of protection. So the people that feel up to taking the risk get more choices and more responsibility and those that need the help get more protection.

 

[Kit'smommy]

It's evil.

Having studied at university, I am now in over £7,000 debt - that's what, $10,000?

And this is compounded by those horrific credit cards. Easy to get, easy to rack up debt, impossible to pay of... these credit card companies are nasty things.

And what does the Government do?

They take away student grants and replace them with loans.

It's gonna take a long time and a lot of discipline to overcome this.

Who else thinks that the credit card companies are evil?

Rich::

I don't think they are evil. I have never used mine for anything other than conveniece and paid them off at the end of the month. I love my % I get back from them!

And I don't have a problem with grants being replaced by loans. It is the student's education. The student is the one that will benefit from it and the student should be the one to pay for it.

Congrats for graduating with only $10k in debt. If you picked a good course of study you should be able to pay that back in a reasonable number of years.

 

[moburg]

It's evil.

Having studied at university, I am now in over £7,000 debt - that's what, $10,000?

And this is compounded by those horrific credit cards. Easy to get, easy to rack up debt, impossible to pay of... these credit card companies are nasty things.

And what does the Government do?

They take away student grants and replace them with loans.

It's gonna take a long time and a lot of discipline to overcome this.

Who else thinks that the credit card companies are evil?




Rich::

Credit Card companies offer you a service. You are the one who racks up all the debt. I've been there, and I'm still there, paying off my last credit card balance (and the total CC debt was far more than $10,000), but I do not blame the Credit Card companies. I blame my own spending habits.

 

[bettymae1121]

Ideally people would save up most if not all of the money needed for things they both want and need in life, but face it, that's not always possible. You need a job to earn money, but need a car to get a job, but you have no money to buy a car because you don't have a car to get to your job. Catch 22, and the only solution is to borrow money for a car so you can get a job. A reasonable solution is to buy a reasonably priced car with a reasonable payment, keeping in mind the income your likely future job will give you, so you don't over extend yourself.

Same thing with college. Your parents couldn't (or didn't) save much for your college, and it would take you a decade working at near minimum wages to earn enough to pay for a four year degree, even if you take some classes at the local community college. You can't get a better paying job without a degree, but you can't get a degree because you don't have enough money. Saving for a decade or more isn't practical, so you manage to pay your way through community college and take loans for the last few years of your bachelor's, again keeping in mind the earning potential of your chosen field.

So, I don't think "evil" is quite the right word, even when it comes to CC's. As stated previously on this thread, no one holds a gun to your head. On the other hand, no one forces the CC companies to extend $10k credit lines to people that gross $3k a year while working their way through college. It's just as irresponsible for the CC companies to extend that kind of credit as it is for people to charge that much while making so little. We always hear about the irresponsible borrower, we rarely hear about the irresponsible lender.

So, perhaps it should be said that "CC companies are irresponsible", or to put it in a more catchy way "CC companies are stupid". It's stupid to lend more than what you can reasonably expect a person to pay back, it's stupid to double the interest rate when it should be obvious that such an increase makes it impossible for said customer to pay that back, and it's stupid not to work with your customers when they call and say "I'm having problems, what can we work out so I can pay you back and still, you know, eat".

And sure, it's stupid to get in over your head to begin with when a little planning could have prevented it (I'm not talking about people with life changing events, so save your flames, I mean people that with a little forethought could have avoided a bad situation), this is where personal responsibility kicks in. Just because the CC company is irresponsible enough to offer you a huge line of credit when you make $100 a week, doesn't obsolve you from being irresponsible enough to take them up on it. Sure, they tempted you with good introductory terms and a free t-shirt but you still should read the fine print.