Butch Cassidy

what a loada bollocks (IMHO)

As others have said a Credit Card is often the ONLY way to build up the much needed credit history.

Further bollocks, no one can force you into debt. Although I agree with you regarding redunancy etc (from an earlier post), if you have so much debt that you are unable to either
a) clear it with your 'severance' pay
OR
b) contact the Credit Card company with an alternative (and lets be honest 99.9% of CC companies are open to you providing an alternative)
then you ONLY have YOURSELF to blame.

Spot on

pgtips

Butch, what planet are you on ? Worship the credit card planet ?
You defend these cards as though your life depended on it.
How did we all survive before the age of credit cards ? perfectly fine !!!
The banks want us all deeply indebted to them, and unless you are a banker or an affiliate please do not try and tell me any different. stop trying to pull the wool over peoples eyes.

Debt free is the way to be, shun these devil cards !!!
HP cards, store cards, loans all have one thing in commom, they are tools for companies to enslave you, nothing else.

If your assets are worth less than your debts, and things go belly up, you will see how quick these people will show you who owns your ass !!!

Aviator

Credit cards are just fine for those who know how to use them. Of course the credit card issuers want people to owe money. If you cannot figure how to use it to your benefit then the answer maybe to not have one.

Having credit cards does not put you in debt, spending beyond your means puts you in debt. I have several cards and my only debt is what balance there is each month, then pay it off. End of the year I get money back from the card issuers

That's called insolvency and why people go into bankruptcy! They only own you if you let them. Butches comments were spot on.

pgtips

Credit Card Arrears Account for Over a Third of All Debts
May 2009
34% of unsecured debt is from credit cards, report reveals

New data from leading debt management provider, EuroDebt, reveals that the average unsecured debt over the last 18 months was nearly £29,000 of which 34% is card debt. With a recent report from the Halifax* suggesting that an estimated 217,000 credit cards are hidden from spouses, EuroDebt is warning that this scale of debt could cause major difficulties for families already struggling with an increased cost of living and reduced earnings, if it's kept secret.

"The analysis of a sample cross section of over 4,300 debt management plans with EuroDebt showed that typically our clients have just under 3 credit cards and an average balance of over £3,600 per card" confirmed Kevin Still, Director, EuroDebt. "When looked at in the context of the Halifax survey about hidden credit cards, there could be quite severe consequences for families right across the country if there isn't honesty and openness about the level of credit card debt being incurred.

"We strongly advise that couples should always openly discuss their financial situation. Keeping financial secrets is never a good idea, but in the current economic climate it's especially risky. After all, if the family circumstances suddenly change, perhaps because of redundancy or illness, then the best approach is to talk to all your creditors and make them aware of a possible delay in payments. But, of course, this can only be done if everything is known about all financial commitments."

* Research conducted on behalf of Halifax Credit Cards by GfK NOP. Sample 1,000 adults UK-wide, 27th-29th March 2009.

No doubt the situation is much worse now.

Wake up guys, get your head out of the goldfish bowl !!!!

Aviator

Research can demonstrate whatever you want by how the sampling is done. A study of 1000 adults in a country of how many million? Hardly representative when one thinks there are 60.7 million credit cards in issue in the UK as of Nov. 2009.

The card companies are quite open about your debt, they send you a statement and ask for their money back. It does not get away from the fact that debt management is about self control and being financially educated.

There are no big secrets, every card I get I know the terms and accept them. There are I suspect those who don't read the terms and then complain they were not told. You have to sign an agreement which lays out the terms, if you choose not to read it or adhere to it, who's fault is that? I make my purchase decisions based on what I can afford, same as if I were paying cash. If one has say $5000 available for spending in a month, make sure you don't spend more than that, not too difficult.

If people go to the trouble of hiding their spending from their spouse then that makes me think they already know they making a mess of things.

The world is full of those who want to blame someone or something else for their misfortune rather than accept responsibility for their own actions.

pgtips

Bank of England Reports Rise in Credit Card Debt

Sep 18, 2009 Neil Gunn

The latest Bank of England Trends in Lending Report has said that although the levels of overall consumer debt fell in June (2009) credit card debt showed a rise.


The Bank of England report also makes the point that effective rates on personal loans and overdrafts have fallen since late 2008, although by much less than Bank Rate. However by contrast, credit card interest rates have remained broadly the same.

Credit Card ArrearsDepressingly the Bank of England adds that most of the UKs major lenders expect arrears, including credit card arrears, to increase over the next few months as unemployment continues to rise.

The Bank of England credit card figures come at a time that some credit card companies are increasing their interest rates by up to 10%. This inevitably means that some consumers are faced with the very real prospect of serious credit card debt.
The well-known UK financial journalist Martin Lewis, commenting on the interest rate increases on his Money Saving Expert website, has said, “These massive interest rate hikes from companies like Egg, Barclaycard and MBNA are what we call ‘rate-jacking’ – as they’re hijacking accounts to irresponsibly boost the costs – blighting people’s ability to manage their debts."

I suppose you will be saying the bank of England is speaking Hogwash ?
you enjoy your life on credit whilst it last, lets just hope they don't rate jack your ass

Aviator

I do enjoy it, but I don't carry any significant debt and then only short term (under 30 days). I really don't care what the rate is as I carry no balance and consequently pay no interest. So long as I get my 2% back at the end of the year and all those coveted points I'm quite contented, however I appreciate your concern for my financial welfare.

One think you may have overlooked. When you make store purchases you are quite possibly contributing to the credit card phenomena anyway, whether you use one or not. Stores pay a merchant fee, often in the 2% mark, which gets included into many of the prices they charge.

Alan2005

You should find out how our monetary system works. It is completely and utterly dependent on the issuing of debt; our economy would collapse if people stopped borrowing.

pgtips

Your good for now, but if your circumstances ever change and an emergency crops up, I wonder how long it will be before you are maxing out your credit limits ?

Time to end this credit card slavery

The Nation) This column was written by Nicholas von Hoffman.
--------------------------------------------------------------------------------
In the old days, banks lent money to people they were confident would pay them back. No more. These days, banks search for people who cannot pay them back and lend them money anyhow.

These unsecured loans come in the form of credit cards. And the banks cannot find enough young people, students, sick people and old people on small fixed incomes to give credit cards to.

Once they've got them signed up for a card the tricks and traps begin. From then on their victims will spend their money and their lives paying on a debt which they will never discharge. It's as though they had been thrown into a new form of indenture to Citigroup or J. P. Morgan Chase.

An example of what credit card-issuing banks do to people was given to the Senate Subcommittee on Investigations, where Alys Cohen of the National Consumer Law Center, testified about "a young Navy sailor who opened a credit card account with First Premier Bank on November 21, 2006. The credit card had a $250 credit limit and a 9.9 percent APR for purchases. The same day that the sailor opened the account, he was assessed two fees — a "Program Fee" of $95 and an "Account Set-Up Fee" of $29. The next day (November 22), he was assessed a participation fee of $6. Three days later (November 24), he was assessed an annual fee of $48. When this young sailor received his first month bill, which had a closing date of Nov. 24, 2006, he had already accrued a balance of $178, without making a single purchase.

"The next week, the young sailor used the credit card for four transactions totaling $84.85.On Dec. 22, 2006, he was assessed a participation fee of $6. With all these fees, the young sailor was already over his credit limit, despite making less than $85 in purchases on a card with a $250 limit. He was assessed an over-limit fee of $25 and a late fee of $25, plus a finance charge of $1.96, on Dec. 26. He now owed a balance of $320.81."

The Wall Street Journal, covering the same Senate hearing, recounted the story of "an Ohio credit card holder named Wesley Wannemacher, who recounted for the committee how he wound up paying $6,300 on a $3,200 debt on a credit card issued by J.P. Morgan Chase & Co., and still owed $4,400. He was charged $4,900 in interest, $1,100 in late fees and $1,500 in over-the-limit fees


Still smiling smugly ?

pgtips

Borrowing is a form of slavery nothing else.
It is used to keep the rich, rich, and the poor in shackles.

My advice, get out of debt as soon as you can and only carry essential debt such as money borrowed to pay for your house purchase.

Alan2005

No - the opposite is actually the case. Before credit was available people would find it very hard to buy a house or start a business as they would have to save for a long time first. Credit allows people to bring forward their future income and spend it now on things they want and need. In the system we have there is nothing wrong with being in debt; in fact it's a requirement that the debt level of society is forever increasing (and exponentially too, take a look at the M4 money growth of any western country to see this).

The problems with it are twofold. 1 - Many people don't understand how to manage debt and 2 - Debt is priced incorrectly (people that have a high risk of default should be paying a lot more for their money), but there is little to no downside for getting it wrong.

Aviator

So how does that help? If you borrow too much to buy a house, have an 'emergency' as you say or lose your job and cannot meet the repayments you still lose the house, plus get hammered with any penalties and costs imposed. Why is buying a house 'essential debt' By your rationale, one would be better off renting rather than borrowing and then not be in debt at all. so long as you pay your rent.

You seem to have a no understanding of how an economy functions or prudent financial management.

Aviator

pgtips

Alan, and hear lies the problem of the world today, this kind of wicked brainwashing that we should be in debt, and it is normal !!!!!

It is not normal, totally opposite. Who would willingly choose a life of slavery ?
For what ? We come into this world with nothing, and we shall leave with nothing. So why spend a good part of our lives paying a bunch of parasites for a whole load of crap we don't need.

Credit by and large satisfies our greed not our need.The only thing worth borrowing for is a house purchase (we all need somewher to live right). all the rest of the stuff we can save up for and buy when we have the means to pay for it.

Thats how I live now, I may not have the latest car, or gadgets, but what I have is not on credit and I am all the more happy for it !!!

pgtips

Over a long period say 25 years, it is better to buy your house. After the mortgage term there is no repayments to make. You will still be paying rent as a renter. You will hopefully also build up a large chunk of equity with the long term house price appreciation. If you cannot pay the mortgage you can always rent the property out to cover this cost until you are in a better financial situation.

Maybe I know a bit more than you think. Even though I have had my little problems with credit cards, I have managed to build quite a tidy portfolio over the years, most now debt free and was once a financial advisor for one of the largest financial institutions in Europe.