NationStates Jolt Archive

what do you think of them? sign of the end of times? way to pay for things now instead of later?

ultimately this thread is being made because I met a guy who is essentially trapped in credit card debt at 19 and the same story goes for a woman at my work (who hates the job but can't leave because of debt) both are young and both have/do work at a certain banks card fraud department because it pays so well

really this just vindicates a rule that I must never get a credit card if I ever hope to be happy, but really why are such things given to kids and should we be warned about this in school?

So long as one doesn't spend like a fool and charge more than one can pay, there is no problem with credit cards.

Personally, I would rather carry some solid coinage.

Meh, I'm find at handling credit cards. They're great for when I've forgotten to top up my current account from my savings account that month. Gets me out of those situations where my debit card refuses to work.

That said I haven't used my credit card in ages. And I think I might be one of the few people in the world to have a positive balance on my credit card account - I accidentally paid £5 too much into the account about 6 months ago.

So long as one doesn't spend like a fool and charge more than one can pay, there is no problem with credit cards.

problem is that you don't see the money leaving really so it can get out of hand very quickly

its like being handed a sack of money and told not to spend any of it, we are just monkeys after all

I prefer to spend money that I have right now, hence I have debit cards, cash, and no debt.

what do you think of them? sign of the end of times? way to pay for things now instead of later?

ultimately this thread is being made because I met a guy who is essentially trapped in credit card debt at 19 and the same story goes for a woman at my work (who hates the job but can't leave because of debt) both are young and both have/do work at a certain banks card fraud department because it pays so well

really this just vindicates a rule that I must never get a credit card if I ever hope to be happy, but really why are such things given to kids and should we be warned about this in school?

I have three credit cards, grand total debt, ~$400. They're fine if you're not brain dead stupid.

Keep the limit the card came with. Mine is still $500 after a year. That and pay off your card ASAP. I do my banking online, and balance my Visa account all the time, even if it it's only a few cents. That and I use my card to pay for gas and online purchases only, nothing else. My theory is, if I don't have the money in the bank I can't afford it. I'm pretty sure rich people are the ones with the large bank accounts, not the ones who can empty them real quick.

Speaking as a credit assessor we never give credits cards to kids. If you're under thirty and want one, you better have some nice savings and clear employment stability

Speaking as a credit assessor we never give credits cards to kids. If you're under thirty and want one, you better have some nice savings and clear employment stability

pfft I'm temping as a guy who calls you when you have possible fraud and I can say I have spoken to maybe 5+ kids my age who have the things

this is the UK though are banking is crazy

I dunno. When I was young I couldn't get a credit card unless I secured it, and then my limit was only $500. I'm a cash only person. Buying stuff on credit seems like the worst idea ever. I actually had a friend a few years back who rented his furniture.

Me: This living room set is overpriced to begin with and by the time you are finished paying, you'll have paid this price twice.
Him: It's only $14/week.
Me: But you are paying 4 times the cost of this furniture!
Him: Yeah, but it's cheap and I'll own it in 5 years.:headbang:

pfft I'm temping as a guy who calls you when you have possible fraud and I can say I have spoken to maybe 5+ kids my age who have the things

this is the UK though are banking is crazy

We have the Credit Code Act which outlines very strict rules. The bank I work at has an extremely narrow interpretation, and very conservative lending policy, as a result we see little in the way of defaults or bad debt.

Without violating confidentiality or trade secrets, our policy is basically:

Stability in employment (FullTime & passed probation, ditto PartTime, SelfEmployed with two years tax returns)

Stability in residence (permanent resident, stability in actual living situation)

Capacity to repay (after removing cost-of-living of applicant and any dependants, as well as any regular commitments, does the discretionary income leave enough to repay the loan and maintain a comfortable lifestyle?)

Credit History (Australia uses a negative credit system, whereas in America you receives points for repaying a loan well, we maintain a list of every time in the past four years you applied for credit, any paid or unpaid defaults from four to seven years ago, company directorships, bankruptcy, etcetera)

I dunno. When I was young I couldn't get a credit card unless I secured it, and then my limit was only $500. I'm a cash only person. Buying stuff on credit seems like the worst idea ever. I actually had a friend a few years back who rented his furniture.

Me: This living room set is overpriced to begin with and by the time you are finished paying, you'll have paid this price twice.
Him: It's only $14/week.
Me: But you are paying 4 times the cost of this furniture!
Him: Yeah, but it's cheap and I'll own it in 5 years.:headbang:There are certain advantages to renting. However, you want to rent things that devalue fast though. Furniture is not among these items.

I seem to remember that this company that rented out laptops. You could get a new one each year if wanted, and it worked out fairly cheap too. Plus they were very good at coming out and fixing/replacing it if it ever broke and it wasn't because you threw it under a bus or something.

There are certain advantages to renting. However, you want to rent things that devalue fast though. Furniture is not among these items.

I seem to remember that this company that rented out laptops. You could get a new one each year if wanted, and it worked out fairly cheap too. Plus they were very good at coming out and fixing/replacing it if it ever broke and it wasn't because you threw it under a bus or something.

IN a case like that, it might be worth it. In the case of renting to own your furniture and paying 4 times what it's worth, notsomuch.

I don't plan to have credit cards, I think that if you can't buy it outright, then you shouldn't buy it at all. This excludes mortgages of course.

I dunno. When I was young I couldn't get a credit card unless I secured it, and then my limit was only $500. I'm a cash only person. Buying stuff on credit seems like the worst idea ever. I actually had a friend a few years back who rented his furniture.

Me: This living room set is overpriced to begin with and by the time you are finished paying, you'll have paid this price twice.
Him: It's only $14/week.
Me: But you are paying 4 times the cost of this furniture!
Him: Yeah, but it's cheap and I'll own it in 5 years.:headbang:

The in-store finance, big chunk of our refinancing work. Because a lot of these smaller lending are less strict then we are, they often commit people to debt levels well beyond our lending criteria, and as a result, we cannot in good conscience refinance the debt into one of our cheaper loans.

i certainly think personal planning and finance should be taught at school, in some form or other. when i left home to go to uni i had no idea what i was doing at all.

however, i did just recently get my first credit card. its kinda scary, but i'm just going to use it for when my debit card won't do and such... gonna try hard not to build up debt! i always said i'd never get a credit card, but i realised that in order to get a mortgage in a few years, i'll have to have a credit history.

I've started to use my credit card more often after my bank charged me for using my debit card too many times in a month. I never buy things with money I don't have. Although, that would be difficult because I have no expenses and my income is higher than my credit limit. I don't spend much money.

however, i did just recently get my first credit card. its kinda scary, but i'm just going to use it for when my debit card won't do and such... gonna try hard not to build up debt!

don't be silly take as much out as you can and burn it because you will never get the chance to do so again

then flee overseas where the bank will never be able to get in contact with you and return maybe a year later (I actually know someone who did this and it worked to the level where the bank sends junk mail with card offers)

i always said i'd never get a credit card, but i realised that in order to get a mortgage in a few years, i'll have to have a credit history.

ah, the stage in growing up where you must be enslaved in work for the rest of your life :)

I have zero credit cards, and it's staying that way.

I buy expensive things with my credit card and them immediately pay them off to increase my credit rating.

Personally, I don't see the point. I see people pay for petrol with credit cards, and I just think 'why?' - you'd think people have enough on a savings account for that.

I like the idea of debit cards so I can pay for stuff on the web myself, rather than asking my dad all the time, but they cost fees so I'm not getting one.

But then, if you want to use a credit card, go for your life. It's none of my business.

used properly, credit and credit cards are great.

how else are you going to buy a new car or a house?

credit cards give you the kind of buyer protection that cash just cant.

you should get a credit card and use it only for things that you can afford but dont want to use cash to pay for. meaning you dont want to carry $800 to the store to pay for a computer so you buy it with the credit card and pay the $800 out of your bank account when the bill comes.

if you treat it like the card limit is money to be used up, you will end up in a mountain of debt.

I used my credit card to pay my tuition fees, because the interest rate for staff is less than a personal loan (7.25%p.a.)

I don't plan to have credit cards, I think that if you can't buy it outright, then you shouldn't buy it at all. This excludes mortgages of course.

What my roommate told me, which makes sense, is that you should only buy things with money you don't have if the value of that thing will grow over time. So its ok to buy a house with a loan from the bank because the value of the house should increase over time which covers the interest, but its not ok to buy a car or a tv with a loan because the value of those items will only go down, so you lose money overall.

But if I really needed a car to get to work and didn't have the money to buy one that was reliable, I would buy a car with a bank loan. Necessity always comes first and buying a car t get to work is kind of like a business investment.

What my roommate told me, which makes sense, is that you should only buy things with money you don't have if the value of that thing will grow over time. So its ok to buy a house with a loan from the bank because the value of the house should increase over time which covers the interest, but its not ok to buy a car or a tv with a loan because the value of those items will only go down, so you lose money overall.

But if I really needed a car to get to work and didn't have the money to buy one that was reliable, I would buy a car with a bank loan. Necessity always comes first and buying a car t get to work is kind of like a business investment.
Also, really think about auto-finance. The dealer may promise you "approval in under an hour" but, what they don't tell you is they have to perform the same due diligence as a bank (so it's only pre-approval), and most banks can do pre-approval in a matter of minutes.

Another reason to check out multiple lenders is that despite what most people think, it is not easy to refinance a car loan, particually in a country which attract stamp duty or other taxes. If you take out a loan on a car in Queensland, Australia for example, and the loan is the same amount as the car, you drive off the lot with the loan being worth 120% of the value of the car AS NEW! This means unless you placed down a sizable deposit, or your car is a luxury car that is likely to hold or increase in value, banks will not refinance the loan.

Ugh, I hate credit cards, yet I can't live without them. Not until I have an income steady enough...well okay until I can stop living beyond my means. Hopefully soon.

To all the people who have said "I will never have a credit card",

how do you plan to buy a house or car? You won't have a credit history, so it is unlikely that you will be able to get a mortgage/financing. Do you honestly intend to save up $450,000 and pay for your house upfront? Then do the same for your $30,000 car?

A necessary evil some times. I hardly use mine. It's a good thing to have when you need to buy something where it would cost you to use your debit. I use my credit card on groceries then pay back right away. This way I don't pay the fee for using interac.

To all the people who have said "I will never have a credit card",

how do you plan to buy a house or car? You won't have a credit history, so it is unlikely that you will be able to get a mortgage/financing. Do you honestly intend to save up $450,000 and pay for your house upfront? Then do the same for your $30,000 car?

I pay cash for my cars. Until recently I had a good thing going. Pay cash, pay myself car payments, car dies, spent $12k buying a new one.

The only way to have a good "credit score" is to stay in debt. I don't like debt. I pay cash. You can, btw, get a home loan without a "good score" you just have to find a lender who will do it, with 20% down, it's not hard, if you had more down, it gets even easier.

Speaking as a credit assessor we never give credits cards to kids. If you're under thirty and want one, you better have some nice savings and clear employment stability

So you still give cards to kids.....

To all the people who have said "I will never have a credit card",

how do you plan to buy a house or car? You won't have a credit history, so it is unlikely that you will be able to get a mortgage/financing. Do you honestly intend to save up $450,000 and pay for your house upfront? Then do the same for your $30,000 car?

Paying off student loans works too...and hardly requires a credit card.

what do you think of them? sign of the end of times? way to pay for things now instead of later?

ultimately this thread is being made because I met a guy who is essentially trapped in credit card debt at 19 and the same story goes for a woman at my work (who hates the job but can't leave because of debt) both are young and both have/do work at a certain banks card fraud department because it pays so well

really this just vindicates a rule that I must never get a credit card if I ever hope to be happy, but really why are such things given to kids and should we be warned about this in school?

I hate the idea of buying on credit. Or being in debt, in general. So for me I will try to avoid them like the plague, though it's conceivable I might get one for some purpose or another... I hope I don't need to.

Schools generally don't teach much if anything about personal finance at all. [Insert conspiracy theory here.] They should, though. Starting with the idea that a credit card is not a magic, permanent, infinite-dollar-bill in plastic form. Kids need to understand that it's basically the same thing as going to the neighborhood wiseguys and getting them to give you $5,000. They'll want it back, plus extra. Or else you gets your legs broke.

i think what people need to understand is that credit is defacto a form of indenture. i refuse to use them myself. or have managed to avoid doing so so far. the "privelage" of using credit is not free either. something i don't think everyone who uses it fully understands.

i won't say doing so is invariably evil or anything like that, but there is i think a responsibility with every purchase, and that includes paying what is charged to use credit, to consider what the profits contributed to by doing so are being used to pay for and further.

this is the voting at the cash register thing, which is of course, the vote that is always counted, whatever party or idiology may be in power or paid lip service to. even if and when political elections are completely rigged, the vote at the cash register is still always counted.

=^^=
.../\...

So you still give cards to kids.....

I'd hardly call someone under thirty, with a good repayment history, stable employment and an established savings pattern a kid.

(for the record, I'm the youngest person to ever be issued a credit card by my bank)

I've grown to truly loathe the American credit system. If there's one thing my job has taught me, its that people who use a lot of credit are up to something. Yes, credit references are important, but rewarding people with more accessible credit for extending their debt is foolish.

I have two credit cards and a debit card. I paid off my $2800 debt some time ago. :D

But I'm in the hole once again, with about $487 in debt that I'm paying off next week. Weeee.

I'll never get a credit card. I'd rather have the money to pay for something instead of not and then pay later plus interest. The only reason I'm in debt now is because of my student loan.

Credit Cards are fine if you use them as a convenience and not as a crutch. However, it is very easy to get into debt with them, especially when you're a young guy with very limited funds, and limited life experience. And the CC issuers are evil!

naaa don't use, em, don't want to use, em.

Because usury is immoral, so are most credit cards. The ones where you pay no interest for a limited time or in certain situations are fine, though.

Do you honestly intend to save up $450,000 and pay for your house upfront?$450,000? :eek:

$450,000 is cheap as hell for a house. Then again I live in New York and everything is way more expensive than everywhere else...

I don't have a credit card, mostly because I don't need or want one (and probably because I couldn't get one since I don't work because I'm still studying). I also rater pay with relatively rare metals.

$450,000 is cheap as hell for a house. Then again I live in New York and everything is way more expensive than everywhere else...Yikes.
According to Wiki, "The average price for a 3- to 4-bedroom, 2-bath family home in Pittsburgh is $162,000"

$264,000 is the mean, in the US, I believe

To all the people who have said "I will never have a credit card",

how do you plan to buy a house or car? You won't have a credit history, so it is unlikely that you will be able to get a mortgage/financing. Do you honestly intend to save up $450,000 and pay for your house upfront? Then do the same for your $30,000 car?

I live in a country where having no credit history is a plus when requesting a mortgage. It saves banks the trouble of demanding you get rid of them before granting the loan (they are obligated by law to check you do not loan more than your income can support; and the taxation on non-house related loans is much heavier).

$264,000 is the mean, in the US, I believeYep.

Yep.

What would you do without your friendly neighbourhood credit officer...?

I prefer to spend money that I have right now, hence I have debit cards, cash, and no debt.

Same here, although I guess I'll eventually take up a mortgage together with my BF for a place of our own.

I don't plan to have credit cards, I think that if you can't buy it outright, then you shouldn't buy it at all. This excludes mortgages of course.


Just get one and buy stuff like snacks and gas, stuff you have to pay for anyway.

That way when you go to get a mortgage you'll have a stellar credit history.

When I was 20 I had a little bit of trouble getting a mortgage because I never had a credit card, just a debit. I ended up getting a higher interest rate for a few years because of it.

Just get one and buy stuff like snacks and gas, stuff you have to pay for anyway.

That way when you go to get a mortgage you'll have a stellar credit history.

When I was 20 I had a little bit of trouble getting a mortgage because I never had a credit card, just a debit. I ended up getting a higher interest rate for a few years because of it.

that's horrible advice.

When I was 20 I had a little bit of trouble getting a mortgage because I never had a credit card, just a debit. I ended up getting a higher interest rate for a few years because of it.

Sorry but... what kind of pathetic and moronic system do banks employ when deciding if you should get a mortgage in your country ? A mortgage is quite different from a simple consumer credit.

Oh wait. This actually explains the mortgage crisis in the USA quite well.

that's horrible advice.

Why?

Sorry but... what kind of pathetic and moronic system do banks employ when deciding if you should get a mortgage in your country ? A mortgage is quite different from a simple consumer credit.

Oh wait. This actually explains the mortgage crisis in the USA quite well.

Credit card history is one of several factors used in determining mortgage eligibility.

Do you own a house?

Why?

first it's a good way to get into debt, second trying to "adjust" your Fico score enough to "make it perfect" is a long and confusing prospect which usually leaves people with an average of 3 cards and $8K in debt, no savings but a "really good score" which is good for what? getting more debt. Keeping your score "just right" involves moving balances, taking on more debt, keeping balances on your remaining cards, and making sure you don't pay everything off every month. Guess what? it's not going to help you get a mortgage that much.

If you don't have any debt, no late payments for at least 2 years and you have a good down payment, there should be no problem with you getting a mortgage. If your interest is a bit higher for the first two years, I think that's okay, just re-fi it later. The choice is between saving 2-3% on interest on a 15 year loan and living in debt or paying a bit more for a few years and being financially stable.

The only way to have a good "credit score" is to stay in debt. I don't like debt. I pay cash. You can, btw, get a home loan without a "good score" you just have to find a lender who will do it, with 20% down, it's not hard, if you had more down, it gets even easier.
From some of your past posts I realise that debt-related matters are part of your profession, and it's obvious that you know far more about it than I do, but this doesn't hold true, in my experience.

For about 10 years, starting in my late teens, I was horrifically irresponsible (financially). I had no dependents and a healthy income which I supplemented with endless bank loans, credit card use and - worst of all - store cards. By the end, my credit rating was appalling. However, I then met, got engaged to, and eventually married an accountant, who was quick to put me back on track. I got rid of all my cards bar one credit card, consolidated my loan obligations into one large loan with one monthly payment by arrangement with my bank (who were excellent throughout, which surprised me a little) and have never looked back.

My credit rating, as you can probably imagine, was terrible as a result of what I'd done. However, since I cleaned up my act I have used my credit card regularly - for online purchases etc - and cleared the balance at the end of each month and doing so has repaired my credit rating nicely. There is, in my opinion, nothing wrong with using a credit card as long as you are responsible enough not to charge things to it that you cannot pay off before you start getting charged interest.

Credit card history is one of several factors used in determining mortgage eligibility.

I have worked at the mortgage acceptation deparment of a large bank (an ING subsidary) to help me finance college. Credithistory was only reviewed to see if someone was able to pay their bills or not (customer protection) or liked to loan sums of money and run (bank protection).
Having no credit history is considered a positive thing.

Then again, most banks here refuse to finance much more than the house is actually worth.

first it's a good way to get into debt, second trying to "adjust" your Fico score enough to "make it perfect" is a long and confusing prospect which usually leaves people with an average of 3 cards and $8K in debt, no savings but a "really good score" which is good for what? getting more debt. Keeping your score "just right" involves moving balances, taking on more debt, keeping balances on your remaining cards, and making sure you don't pay everything off every month. Guess what? it's not going to help you get a mortgage that much.
If you don't have any debt, no late payments for at least 2 years and you have a good down payment, there should be no problem with you getting a mortgage. If your interest is a bit higher for the first two years, I think that's okay, just re-fi it later. The choice is between saving 2-3% on interest on a 15 year loan and living in debt or paying a bit more for a few years and being financially stable.



You won't get into debt if you're buying things you already normally buy.

My way worked for me, just fine. I never went into debt. I just bought stuff I normally buy and paid it off at the end of the month.

Maybe I wasn't clear enough. I didn't have a credit history when I bought my house because I never had a credit card. I figured my debit card and bills would have been enough, but they weren't. I got stuck with an %8 interest rate for a year when everyone else I knew had like 6% or 7%.

You won't get into debt if you're buying things you already normally buy.

My way worked for me, just fine. I never went into debt. I just bought stuff I normally buy and paid it off at the end of the month.

Maybe I wasn't clear enough. I didn't have a credit history when I bought my house because I never had a credit card. I figured my debit card and bills would have been enough, but they weren't. I got stuck with an %8 interest rate for a year when everyone else I knew had like 6% or 7%.

so you had to pay 1% or 2% more in interest? how horrible. While you were "responsible" with your credit, most people can't/won't be. I don't see the point in taking the risk and actually having to pay interest on things you could have paid cash for to save 1% in interest on your house, especially when you can just go down to the bank and having them manually underwrite your loan and not have to pay extra interest and not be in debt. Remember charging and paying off every month isn't helping your credit score any at all, you have to keep a balance on the cards to help your score, so you are paying interest on your gum and soda. Sounds stupid to me.

From some of your past posts I realise that debt-related matters are part of your profession, and it's obvious that you know far more about it than I do, but this doesn't hold true, in my experience.

For about 10 years, starting in my late teens, I was horrifically irresponsible (financially). I had no dependents and a healthy income which I supplemented with endless bank loans, credit card use and - worst of all - store cards. By the end, my credit rating was appalling. However, I then met, got engaged to, and eventually married an accountant, who was quick to put me back on track. I got rid of all my cards bar one credit card, consolidated my loan obligations into one large loan with one monthly payment by arrangement with my bank (who were excellent throughout, which surprised me a little) and have never looked back.

My credit rating, as you can probably imagine, was terrible as a result of what I'd done. However, since I cleaned up my act I have used my credit card regularly - for online purchases etc - and cleared the balance at the end of each month and doing so has repaired my credit rating nicely. There is, in my opinion, nothing wrong with using a credit card as long as you are responsible enough not to charge things to it that you cannot pay off before you start getting charged interest.
To have a good Fico score you have to carry debt. I promise. You can look it up. If you charge things, pay them off at the end of the month and never carry any debt it hurts your score just as bad as not using cards at all.


* 35% — punctuality of payment in the past (only includes payments later than 30 days past due)[citation needed]
* 30% — the amount of debt, expressed as the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits)
* 15% — length of credit history
* 10% — types of credit used (installment, revolving, consumer finance)
* 10% — recent search for credit and/or amount of credit obtained recently

To have a good Fico score you have to carry debt. I promise. You can look it up.
I don't need to look it up, I trust you. It's one of those little facets of my personality that I am given to trusting people to know what they're talking about when they hold forth on things in their area of expertise :)

Perhaps the influence of the FSA in this country leads to credit ratings being calculated differently. Alternatively, I might just simply be wrong - it wouldn't be the first time.

Because usury is immoral, so are most credit cards. The ones where you pay no interest for a limited time or in certain situations are fine, though.

$450,000? :eek:

$450,000 isn't much when it comes to buying a house..though i guess that does depend on where your are trying to buy.

I have a credit card, which I have stopped using and intend never to use again.

A few years ago, I used it to pay for a move from one state to another (US). The plan was to incur a certain amount of debt, get a better job (the point of the move), and use my higher income to pay off the debt. However, the move involved some last minute, unexpected expenses which ended up increasing the debt I was carrying from $7000 to over $10,000, making it take longer to pay it off. Then the bank that issued the card was bought by another bank, one with which I would prefer not to do business, and they immediately raised interest rates on all the acquired accounts (one of the reasons I didn't want to business with them). Now I was not able to pay enough over the monthly minimum to pay down the balance. Interest rates were raised two more times, as well, raising my minimum payment to several hundred dollars per month, from the original less than $100/month. At this point, my increased income (which I had managed also to increase twice during this time) could not keep up, and I was under increasing financial pressure. Then luck intervened -- I inherited a property, sold it, and paid off my balance in full.

I will never allow myself to get trapped like that again. The credit and lending industries in the US are usury, plain and simple. Until the system is reformed, I will not use it.

$450,000? :eek:It is not the official average cost of a dwelling, but a guess. Where I live is expensive, and I am pretty far from the city core.

EDIT: According to wiki, the average price of a two story home is $840,000 in the city core.