How much Credit Card Debt do you have?

[tomthebarncat]

I have used my credit card more in 40 days then in 20 years. Relocating to China and having my employer screw me over in my contract has caused me a financial hardship. I have since recovered but am unsure as how to pay my credit card bill from China. I was told to use western union, but sadly folks here like to take advantage of foreigners and I have already been ripped off. So, I negiotated a much lower interest rate, until I can pay the bill. For the first time in my life I had to charge groceries

 

[SDSorority]

We use our CC like a debit card. If we don't have enough $$ in our bank account to buy something, we don't. For BIG purchases, like a car, we put as big of a down payment down as we can, and then pay each month.

 

[2DisPrincesses]

No CC debt here!

Had some in the past- had to slowly dig my way out of it and will NEVER do it again.

 

[bettymae1121]

I think my biggest thing about "judging CC debt" is that CC debt is always seen as bad, but car and student loan debt is considered either "good" or at least "acceptable". DH and I have CC debt but no student or car loans. Our CC debt equals that of one or two car payments (depending on what type of car you're talking about) or is about the amount of modest student loan debt.

If I'd posted that I had a mortgage, a car loan (or two) and a student loan (or two) but no CC debt, many would consider DH and I in good financial shape. But by posting that we have a mortgage and cc debt (locked in at about 6% for the life of the debt), but no student loans or car loans, I'm sure that many think we are in poor financial shape.

Debt is debt. Many say "oh a car loan is secured by the car and a student loan is an investment in your future". Really? If you have a sudden drop in income, are you REALLY going to sell off your car to pay off the loan? A few people might be in a position to do so, but the marjority will find their car is worth less than the note (even if they put a down payment on it) or that they can't find a reliable used car to replace the one they want to sell (most people needing a vehicle to get to work). So you're stuck with the car loan.

As for student loan debt, keep in mind that student loans are NOT dischargeable in bankruptcy. If you financial situation blows up, you're stuck with that loan for all eternity. And many are now finding that the degree they worked so hard for and took on so much debt for isn't worth the sheep skin it's printed on. Not that I knock higher education, but it's not the express train to the American Dream that it used to be.

Ideally I'd like to be debt free, that's the best position of all of course. And with hard work and some luck, we'll be CC debt free in 2-3 years. But CC debt isn't always the devil, either. It really depends on your overall financial picture.

 

[beansmom]

^ what she said.

We have a car loan and at 0% interest I don't see any reason to worry about paying it off early.

 

[C.Ann]

None..

 

[JennG]

Like the vast majority here on the Dis, none.
I LIVE on cc's but pay it off, interest free.

Same here

 

[patsal]

Mortgage and student loans are our only debt and all will be paid off by the end of next year!

 

[ValpoCory]

Several people on this thread say they pay off their credit card(s) in full multiple times per month. Up to 5 times per month by one poster. Why is that better than paying it off once per month when your statement is generated? Seems like a lot of extra time and effort for no monetary gain.

 

[jakoky]

Well, we have no credit card debt but we do have our mortgage, a line of credit, and a trailer loan. The interesting thing in all this is, some people say they only have a mortgage, but with my 3 things, i probably owe less than most do on their mortgage. Truly asking about debt is a personal thing, for me, we did not want a huge mortgage, we have a beautiful, large home,but have no desire to move and have 250 000-400 000 dollar mortgage. I owe much, much less than this with all my debt plus have more than i owe in RRSPs and others savings...

We pay all our bills on time. This year has been huge in expense for us between my daughter in college, eye surgery, etc....Groceries run us a huge 800 a month, i always buy sales but with 3 teens and many friends over constantly, we go through a lot. We drive our vehicles forever and ever. I am a huge believer in living in your means BUT living life. My kids are almost grown, and i wouldnt trade having a trailer payment for the last few years over the memories of camping, not a chance ...or having gone on our disney trips, but still having a very affordable line of credit with a very low interest rate (this is not how i paid for any of our vacations, we always save to go)....Such a personal issue, and while many of us dont have huge debt, we need to be thankful circumstances are allowing us to be this way! If i was to be truly debt free, i would had to given up way to much as my kids grew up..i set our mortgage as affordable so we could live life!

 

[MrsDe2008]

We are CC debt free...that doesn't mean we are debt free. Unless you pay in advance for everything, you will always owe someone something. We have a brand new car we bought last year that we are financing for 5 years in total (under 4 to go) with a remaining balance of about $13,000 so I can't say we are debt free, but we don't have an CC balances...we pay it in full every month.

 

[Sparkleshine]

We are completely debt free and I do not even have a credit card.

We don't have car payments, credit cards, nothing of the sort. Right now we are renting a house so I don't have an actual mortgage right now. We are waiting for the market to drop a bit more before we buy a home again. Due to my car's age I will be purchasing a car soon and will have debt again since I will be financing it.

I was just brought up that the only thing you finance are homes and cars you save for vacations/furniture/luxuries so have never really used credit cards or other means of financing.

 

[mrodgers]

Ok, so here is a question for quite a few folks here who has stated no debt, but then state that they will need a new car soon so they will end up with a car loan....

Why? If you are debt free, why wouldn't you save up the cash to purchase outright?

I know when I am finally debt free, have money in an emergency account for 6 months, and am fully putting away for retirement, I'll be socking away money into an account earmarked for this or that. I don't make a lot of money, but I know I will have probably $1000 to split up for various funds. One of them will be probably about $300/month earmarked for a car fund (car repairs to come from this fund as well.)

That would leave me with $18000 easily every 5 years or so (depending on what I do with repairs to current). I am certainly not going to make the mistake of buying a brand new car again, and for $18k, you can get just about anything you want a couple years old with no miles.

 

[awoogala]

I picked $0-$5000 because our monthly statement regularly shows a balance between $1500-$2000. But I never pay interest because we use the card for everything (Disney Visa) and then pay it off with the next paycheck.

same here. we just put $200 on a cc, and will pay it off in two weeks, so I suppose I could have put none, but it felt like cheating...

 

[QVCshopper]

Ok, so here is a question for quite a few folks here who has stated no debt, but then state that they will need a new car soon so they will end up with a car loan....

Why? If you are debt free, why wouldn't you save up the cash to purchase outright?

That would leave me with $18000 easily every 5 years or so (depending on what I do with repairs to current). I am certainly not going to make the mistake of buying a brand new car again, and for $18k, you can get just about anything you want a couple years old with no miles.

Because why should I hand over $20k+ when I can get low interest rates like 0% to 1.9%? Over the cost of the loan, even a five year, it's less than $1k, and I like having my liquid cash in case I need it, and I might be able to do better than 1.9% in the stock market (although probably not right now).

 

[disykat]

Why? If you are debt free, why wouldn't you save up the cash to purchase outright?

.

Being debt free doesn't mean you have 18K extra hanging around above and beyond your emergency fund etc.

We are debt free, but that doesn't mean we've reached that point. All our
"extra" money will be going to colleges for the next 6 years, so if one of our cars clunks out in that time, we'll be taking out a loan. Realistically, we're going to be living month to month, but with an emergency fund.

It doesn't make many any less happy to be living a debt free lifestyle. It's certainly a better spot to be in that if we had interest payments racking up each month.

 

[Planogirl]

Ok, so here is a question for quite a few folks here who has stated no debt, but then state that they will need a new car soon so they will end up with a car loan....

Why? If you are debt free, why wouldn't you save up the cash to purchase outright?

I know when I am finally debt free, have money in an emergency account for 6 months, and am fully putting away for retirement, I'll be socking away money into an account earmarked for this or that. I don't make a lot of money, but I know I will have probably $1000 to split up for various funds. One of them will be probably about $300/month earmarked for a car fund (car repairs to come from this fund as well.)

That would leave me with $18000 easily every 5 years or so (depending on what I do with repairs to current). I am certainly not going to make the mistake of buying a brand new car again, and for $18k, you can get just about anything you want a couple years old with no miles.

To me it makes no difference whether we are putting money away for a car or buying the car outright. It's still a car purchase to me whether in advance or right at that moment.

 

[disykat]

Several people on this thread say they pay off their credit card(s) in full multiple times per month. Up to 5 times per month by one poster. Why is that better than paying it off once per month when your statement is generated? Seems like a lot of extra time and effort for no monetary gain.

I was wondering the same thing,, but just ran across the answer on a yahoo article I was reading. I had to come post.

If you pay early, your credit report will read $0, so it won't show up as debt. For example - I just paid a $3K college bill on my credit card so technically I am 3K in debt. If I pay it a week early, it won't.

I'm guessing other reasons are a low credit limit, fear that it could get out of hand if they let it accumulate, fear they (or someone else with access to their account) will spend their money if they keep it in their accounts so they pay at each paycheck to help them budget.

I just don't care that much and I don't have any reason to up my credit score so I'll wait for the billing statement. My credit rating is good, I'm pretty self disciplined, and I have no plans to take out any big loans or anything any time soon. It's a good idea to keep in mind if those things change though!

 

[aubriee]

I have a couple of credit cards, but only use one. I use it for everything to get the points, but pay it off about once a week (usually on Mondays). I never carry a balance and have never had to pay interest on it.