Posted on 04/08/2005 6:15:18 AM PDT by FlyLow
The era of happy borrowing is over. Americans might as well know it.
The death bell now tolls for low interest rates. And he, who doesn't hear that chime, can't miss the siren of bankruptcy reform. The federal bankruptcy bill, sure to become law, will turn many exuberant borrowers into lunch for debt collectors.
Fear does have its uses. If the sight of a tighter noose warns people away from piling up debt, all to the good. Americans will understand that credit cards are a potential enemy — and that even the friendly home mortgage can come back to haunt them.
The bankruptcy bill in a nutshell: If you get in over your head in debt, and still have a decent income, you can't wipe the slate clean with a Chapter 7 bankruptcy. Instead, you will be shunted into what's called Chapter 13. There, lawyers will find a way for you to pay back what you owe. That means you will write your creditors checks month after month and, if necessary, year after year.
To be honest, the bankruptcy bill leaves me with mixed emotions. The Puritan in me likes the part about personal responsibility. People who borrow have a moral duty to pay back their debt. And there are bad people who work the system. They do a Chapter 7 on Monday, then drive off in a new BMW Tuesday.
The liberal in me, however, thinks that the weak deserve protection. Many people fall into bankruptcy owing to medical bills or other bad luck. And the legislation does nothing to stop credit-card pushers from luring the innocent into obligations they barely understand.
(Excerpt) Read more at jewishworldreview.com ...
It is about risk. Insurance companies are pricing in risk for those criteria that liberals have not banned yet.
Ummm, this is about insurance, not loans.
Fine
Self insure yourself.
Nope, they don't. For personal use, debit cards have the same protection from fraud as credit cards. Go check out Visa's own site on this.
As to 1% cash back or whatever else, that's just not worth the risk. You cannot know what tommorrow will bring.. 70% of us can expect a negative event in our lives that will affect our income over any 10 year span... You have balances on credit cards, there is absolutely no way you can guarantee you will pay it off every time indefinately. Debit is the same as cash.. there is no risk... If you think some 1% cashback is worth the risk you are taking, more power to you... Me, I personally say no way.
CASH CASH CASH! Credit Cards are just dumb.
Right, that is my point.
Fine Self insure yourself.
I do on some things, not on others. I'm just trying to find out the actual facts about this reported policy by some companies.
No
Paying off your credit card balance every month is the wisest course as it incurs low risk and builds excellent credit.
Mark my words, if this bankruptcy bill passes, debt will become the indentured slavery of the US in the 21's century. And it will start from debt incurred in your first year of adulthood.
We all know people who pay and pay and pay and still owe virtually what they owed in the beginning.
BS.. you don't understand credit or risk if you believe that.
Anytime you owe someone anything you are at risk, I don't care if its for 30 days or 30 years... you cannot know the future.
Secondly Credit Cards don't help "build your credit" that's hogwash... What exactly are you building your credit for? A leveraged buyout of GE?? No. For most folks the major need for "credit" is to get a Home or Car Loan.. and guess what you DON'T NEED 1 DAY OF CREDIT TO GET EITHER OF THEM, LET ALONE CREDIT CARD DEBTS or HISTORY! That is an absolute LIE, and people that spread that kind of garbage are why that LIE becomes accepted as truth when it is ANYTHING BUT!
DEBT has risks, and There is NOTHING WISE about using DEBT for consumer purchases. The safest and lowest risk there is is to SAVE YOUR MONEY AND PAY CASH! Want to build your credit? PAY CASH FOR YOUR BILLS ON TIME! You don't borrow to pay it off and think that's helping your credit, that's a LIE!
You walk in to get a mortgage and you can show you have been paying your rent and utilities on time with cancelled checks or money order reciepts... It's not gonna matter one IOTA if you have no credit cards... in fact open lines of CREDIT count against you when you get a mortgage, because the bank assumes you are going to run them up to their max, so you can borrow LESS for your mortgage.
Stop listening to morons about what wise, and what helps your credit. They are LYING TO YOU, and you are perpetuating the lies. Now their lies may not be lies of conscious, they may actually believe the crap they are telling you.. but what you are being told is CRAP.
The ABSOLUTE SAFEST AND WISEST WAY to live your life is to SAVE AND PAY CASH... anyone telling you otherwise is just full of it. I don't want to hear about your free hat or your 1% cash back... I don't care how "responsible" you have always been.. its all crap.. You get hit by a bus tommorrow are laid up in the hospital for a few weeks, the interest you will pay for that 1% cashback will be more than all those rebate checks you have ever recieved....
Borrowing money for consumption is DUMB, DON'T DO IT!
Fear and paranoia are not your friends.
The ABSOLUTE SAFEST AND WISEST WAY to live your life is to SAVE AND PAY CASH
Let's just pretend you were selected for an important staff position in a major metropolitan area and wanted to buy a home for you and your family (wife, 1-5 kids). Explain to me how you are safe and wise living in a tent while you save your money to pay cash for a home.
AF Vet... mortgage debt is not credit card debt, you want to switch gears and play both sides against the middle.
Did you not read anything I have written? You can get a morgage without credit card debts. Mortgages may be needed to get into a house... Or you can rent and put money away until you can BUY too.
The notion that you have to have a credit card, or that credit cards build your credit is absolutely 100% a lie.
You are certainly safer with ZERO DEBT.. and you are definately NOT wise or safe using credit cards for consumption! If you need to borrow to pay for your consumption, you are OVER CONSUMING! Cut back on your payments or make more money... you don't risk leveraging your future income for something today if you can help it.
Credit Cards aren't used to buy houses (for the overwhelming majority of folks).
LIVE ON LESS THAN YOU MAKE!
If you bought 7 years ago, and haven't refinanced - you are spending too much on the house - even just to rate/term refinance would make sense financially to keep some of that money in your's, not the bank's, pocket.
PM me for details.
There is absolutely no risk if you don't spend more on credit than you have in accessible cash accounts. Even if you do get hit by a bus and have large unforseen costs, you still have the choice of either paying off your CC balance or paying the unexpected bill. With a debit card you don't have that choice since the money is already gone from your bank account. You're never in a worse position with a credit card that you are with a debit card.
My card is paid off each month with money I have in the bank budgeted for that specific purpose because I buy with my credit card the EXACT SAME THINGS I would buy with my debit card. The only difference is that the money goes to the credit card company once instead of to the gas station, the grocery store, the restaurant, the mall, etc. 30 times a month, so your argument is specious.
I could get hit by a bus tomorrow, and the credit card would still get paid off because the money to pay it off is already in the bank account right at this moment. As far as my budget is concerned, it has already been spent; I just haven't written the check, yet.
You don't have a choice with a credit card... you are going to pay that interest if you don't pay it off. If I pay with my debit card, its PAID.. period.
Its not a matter of choosing medical bills over credit cards, its a matter of carrying debt. You have a risk when you borrow, PERIOD... and no amout of pretzel logic changes that. Using Credit Cards to pay living expenses and consumption purchases is just flat out NOT remotely wise or without RISK.
You live on less than you make, and you pay cash for what you do buy. EVERYTHING ELSE is HIGHER RISK and FAR LESS WISE.
You are ALWAYS in a worse position with a credit card than with CASH... you are foolish beyond believe if you think carrying a credit card balance puts you in a safer position than paying cash for what you consume.
Sorry not true, it isn't SPENT until the credit card company gets and cashes the check.. you are unconcious and in a hospital bed and the due date comes and goes.. guess what? You just got an intrest payment.. not only that, but since you paid late, you got hit with a $35 fee, and they jacked you rate up too.
I don't care if you mentally count your credit card spending against your budget, you are NEVER in a safer position using a credit card vs spending money you actually have.
Anytime you BORROW for consumption, you are not being wise. Even if you plan, or even if you have a 10 year history of never missing a payment... you cannot with certainty guarantee that your credit card will be paid in fully before the due date 100% of the time, because you cannot guarantee what will happen to you. I can guarantee that when I pay cash to buy something I have absolutely ZERO risk of being hit with any interest or late fees or other issues. You are NEVER in a better position using borrowed money for consumption than paying cash. Borrowing money always has a risk associated with it, period.
"Utter rubbish."
I second your sentiment
We refinaced a year and a half ago at 5.5%.
And it was actually with a mortgage company which promised no closing costs whatsoever. I didn't think it could be done, but from what I can tell we received a great deal. They say they can do it because they keep the mortgage for the entire term of the loan instead of selling it like a lot of mortgage companies.
I just need to make more money. ;) Don't we all.
I guess you didn't read my auto insurance posts. I am a recent college grad and I was denied auto insurance by more than one carrier because I had been responsible and never went into debt, and didn't generate a credit report. Soon thereafter I got my first credit card and I use it even when I don't really need it so that this will never happen to me again (but I pay it off every month). There is also a new trend where employers are checking candidates's credit histories before offering positions. Would somebody be turned down for a high-level position if they didn't have a credit report? Possibly. I won't take that chance. In modern society you increasingly NEED to play the games to get a good credit report even if you never intend to go into debt.
I read your post, and YES insurance companies reference credit histories, but that doesn't mean you have to get a credit card to have a credit history for your auto insurance... or that you can't find auto insurance without it.
Debt is dumb... period.
I can guarantee that when I pay cash to buy something I have absolutely ZERO risk of being hit with any interest or late fees or other issues.
What if you're inadvertently using counterfeit bills? (Or if idiot police think you are, like the guy with the $2 bills the other day)? Yes, that's exceptionally unlikely, but so are your credit card scenarios.
My credit card scenarios are NOT highly uncommon. You are again showing ignorance of reality. One guy in the history of the world gets arrested for using $2 bills, and is in and out of jail in a few hours, and that's the same as people getting into situations using credit cards that they don't see coming? Not likely.
The number one cause of Bankruptcy is medical bills.... 70% of people can expect a negative event in their lives to impact their incomes over any 10 year period...those are FACTS... not made up one offs.
Few, VERY FEW, people plan to not pay their bills.. life happens and they find that what they thought they had control over isn't so in control any more. You cannot predict tommorrow... no one can... but I can predict that if you use credit... you will have bills to pay tommorrow that you wouldn't have had you paid cash for your purchase.
Debt ALWAYS has risks associated with it, and if you think it doesn't you are patently ignorant on the topic.
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