New Credit Card Laws

[Pablo]

I'm not sure borrowing money should be painless. We cannot expect a pound of flesh, with blood included, but hitting a card for instant cash should be at a higher rate! I know it may no sound good, but actually the new laws protect all of us. It's sad that it came to this at all.....I totally agree with MS and BW. Use a card to get cash back, but most people don't pay the balance - that's an instant loser!

 

[msparks]

quote:

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That's why you're supposed to have a six month emergency fund on hand

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Right On.

 

[DJ]

I see this as a way of forcing people to pay off their purchases faster, the actual cash amount extra they are paying will be what $20 per thousand more. This should signifigantly reduce the amount of time they are paying 10-20% interest as most people carrying high balances would be. The average person ****** away more money than this on beer/cigarettes/lattes.

 

[Pablo]

I think I need to borrow some money so I can have a 12 mo emergency fund!

 

[Dan4510]

However, one cannot change stupidity. People will still do what they are not supposed to do. The new bankruptcy laws only help the credit card companies. About 75% of bankruptcies are from catastrophic medical bills from cancer, etc. Not from over spending.

I quit using them several years ago. If its a small item and I dont have the cash and not willing to put aside for it, I dont buy it.

Do the same with cars. To me, the single greatest waste of money is a new car. Buy it for cash and drive it forever.

Dan

 

[kanling]

I do realize health insurance is expensive and that some people really can't afford it.

But I don't think I have much sympathy for somebody who drives a new Acura, drinks Starbucks every day, spends $60/month on cable, and regularly goes to the movies at $9 a ticket... then goes bankrupt because they never purchased even a basic catastrophic health insurance policy.

Personally, I don't have cable, I drive an 11 year old economy car, drink water, and live within walking distance of a movie theater yet have only seen one movie in the last 12 months. Do you sense some resentment?

(But I do have health insurance.)

 

[Dan4510]

Gary,

couldnt agree more, its not about the monthly payment, its about the total cost involved when a purchase is made. I bought one new car in my life. Price was 8500, when added in financing for 4 years, etc. price was 12,800. In other workds, a 50% increase in price to pay over 4 years. After I did the numbers, I will never buy new unless I can walk in and pay cash and be over with it then.

About the only two things debt is good for is for a home and an education that enables one to buy a home.

Dan

PS. but that's only if one is an individual...If a government is involved, debt is good for buying votes, buying off foreign governments, and financing everyone else's ******* kids that they cant afford to raise...Now those are good uses for debt in my opinion.

 

[GeaugaFletcher]

Increase minimum payment from 2% to 4%? Big deal. There isn't any way a person should actually be paying only the minimum each month for any significant length of time, except in extraordinary circumstances.

 

[Bob Woods]

"There isn't any way a person should actually be paying only the minimum each month for any significant length of time, except in extraordinary circumstances"


You mean like a large balance with zero percent interest?

 

[Gary Allan]

I have some managable credit card debt. Nothing too out of whack. I keep getting calls to refinance or get a home equity loan. I don't see why. Sure, you're moving taxible interest to deductible interest ..and the rate is typically lower (I'm not at a bad rate on the cards). ..but the only thing that I figured is that I'm just liberating cash for more spending and increasing my debt line. I mean, if you're doing it to liberate spendable cash ..what are you going to do with the cash, pay off the loan you just took out to pay off the loans you took out? No, you're just going to find new places to spend it.

Now if you're over your head ..then you don't have much of a choice ..but I'm only 4 years away from having my house paid off and I don't see a good reason to pay 7-9% to refinance it and extend my debt horizon out another 15-30 years..nor pay two mortgages at one time to get rid of some 6-18 month debt.

I haven't quite proven it (taking it from philosophy to fact) ..but I don't think it matters as much what part of your income goes here or there ..but how much your debt comes down each month/year. Even if I was paying 25% on credit card debt, I'm reducing my debt line with my mortgage faster then I would refinancing or taking a home equity loan. In my experience ..there's no such thing as "extra cash" ..just more places that it's spent. I think people are far too conditioned into looking at how much they pay out a month ..and not how much debt it obligates them to. Stuff like paying off a 3 year car note with a home equity loan based on a 30 year rate ..make that any rate over 10 years. Sure the car payment was more then the home equity loan ..but the loan is going to be there well beyond the car (in many cases) ...so what did you gain, the ability to just spend more while increasing your debt?

Anybody see what I'm babbling about

It naturally assumes that you turn your "list of "cough-cough" needs down a bit and apply some patience. You just wait to spend REAL cash after your learning curve takes its toll.