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Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

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Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#21

Post by abarringer »

throwawaykeno wrote: post #7

One thing that's unclear for the article: does this include debt that never incurs any interest? I typically have an outstanding balance in the 3-4 figures on my credit card because I pay for rent, gas, and airline tickets with credit. However, it gets paid off every month. I guess that's technically debt, but it's not problematic or anything... I feel like the majority of credit card debt is the type of "debt" that…

Your feelings are way off. Most credit card debt is not paid off every month. Not by a very very long shot.

Average credit card debt per U.S. adult, excluding zero-balance cards and store cards: $5,232.43

Average debt per credit card that usually carries a balance: $7,494.44

Average number of cards held by cardholders - bankcards: 2.24

Average debt per credit card that doesn't usually carry a balance: $1,128.44

http://www.creditcards.com/credit-card-news/credit-card-indu...

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#22

Post by shanecleveland »

toomuchtodo wrote: post #14
TheOtherHobbes wrote: post #10

Earlier quoted context omitted.

Sticking up a middle finger will trash your credit rating and make it impossible to get a mortgage. In the UK you'll also be put through collections, which can include attempts to force you to sell a property - if you own one - and/or most of your possessions to repay the debt. Credit cards may not be secured, but lenders have risk management divisions who make some attempt to estimate default rates. The biggest prob…

> Sticking up a middle finger will trash your credit rating and make it impossible to get a mortgage. I walked away from an underwater mortgage on a townhouse. It only caused my dropped my credit score ~100 points, and was eligible for another mortgage after 3 years (My credit card provider didn't blink, and had no problem allowing me to keep a charge card with high five figures of credit available). The repercussion…

That's incredible. I wonder how typical your experience is. I've considered this strategy on a home we are forced to rent at a loss, as we'd be unable to sell. But I couldn't bring myself to do it.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#23

Post by empath75 »

TheOtherHobbes wrote: post #10
askyourmother wrote: post #3

Best part is credit card debt is typically unsecured - spend, consume, enjoy, stick up middle finger when repayment is due. Those who do repay will of course sub those who don't over the long course in the variable rates and fees.

Sticking up a middle finger will trash your credit rating and make it impossible to get a mortgage. In the UK you'll also be put through collections, which can include attempts to force you to sell a property - if you own one - and/or most of your possessions to repay the debt. Credit cards may not be secured, but lenders have risk management divisions who make some attempt to estimate default rates. The biggest prob…

I went through a bankruptcy about 10 years ago, mostly stupid credit card debt I ran up in my early twenties. I paid for everything with cash for years after that and having a poor credit rating barely impacted my life. I have credit up near 800 now and the bankruptcy is still on my record for another couple of years. Other than a few months after my wedding and honeymoon, I haven't carried a balance for years.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#24

Post by tehwebguy »

toomuchtodo wrote: post #14
TheOtherHobbes wrote: post #10

Earlier quoted context omitted.

Sticking up a middle finger will trash your credit rating and make it impossible to get a mortgage. In the UK you'll also be put through collections, which can include attempts to force you to sell a property - if you own one - and/or most of your possessions to repay the debt. Credit cards may not be secured, but lenders have risk management divisions who make some attempt to estimate default rates. The biggest prob…

> Sticking up a middle finger will trash your credit rating and make it impossible to get a mortgage. I walked away from an underwater mortgage on a townhouse. It only caused my dropped my credit score ~100 points, and was eligible for another mortgage after 3 years (My credit card provider didn't blink, and had no problem allowing me to keep a charge card with high five figures of credit available). The repercussion…

Main difference being the debt you walked away from was for property that the lender presumably got back.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#25

Post by rm_-rf_slash »

throwawaykeno wrote: post #7

One thing that's unclear for the article: does this include debt that never incurs any interest? I typically have an outstanding balance in the 3-4 figures on my credit card because I pay for rent, gas, and airline tickets with credit. However, it gets paid off every month. I guess that's technically debt, but it's not problematic or anything... I feel like the majority of credit card debt is the type of "debt" that…

There was an eerily prescient 2006 documentary about consumer credit called "Maxed Out," which featured a scene where someone recalled going to a conference of bank and credit card executives, and one of the CC CEOs plainly stated: "The bulk of our profits come from people making minimum payments for the rest of their lives."

As for "pay-in-full" folks like you and me, credit card companies could care less. Whenever we pay with plastic, they get processing fees.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#26

Post by toomuchtodo »

shanecleveland wrote: post #22
toomuchtodo wrote: post #14

Earlier quoted context omitted.

> Sticking up a middle finger will trash your credit rating and make it impossible to get a mortgage. I walked away from an underwater mortgage on a townhouse. It only caused my dropped my credit score ~100 points, and was eligible for another mortgage after 3 years (My credit card provider didn't blink, and had no problem allowing me to keep a charge card with high five figures of credit available). The repercussion…

That's incredible. I wonder how typical your experience is. I've considered this strategy on a home we are forced to rent at a loss, as we'd be unable to sell. But I couldn't bring myself to do it.

At the time, I was backed into a corner so to say. It wasn't something I went into willingly.

My HOA would not allow me to rent the townhouse out (too many rentals already), nor could I come up with the $150K to bring the mortgage down to the new fair market value. So, mailed the keys back to the bank and walked away.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#28

Post by wf »

siscia wrote: post #27

Honest question. There aren't debit cards in the united states? They are simple plastic cards like credit carda but the bank is withdrawing your money directly from your account. There is not debt involved.

Yes, of course there are. But how would we buy things we can't afford now without a credit card?! /s

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#29

Post by rco8786 »

askyourmother wrote: post #3

Best part is credit card debt is typically unsecured - spend, consume, enjoy, stick up middle finger when repayment is due. Those who do repay will of course sub those who don't over the long course in the variable rates and fees.

> stick up middle finger when repayment is due

Err, what a terrible idea. That might work once, sure. Then you're pretty fucked for a long time. The only way to avoid the collections would be to full on declare bankruptcy.

Honestly there's basically no situation in which that's a good idea unless you're actually bankrupt.

Re: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic

#30

Post by tootie »

siscia wrote: post #27

Honest question. There aren't debit cards in the united states? They are simple plastic cards like credit carda but the bank is withdrawing your money directly from your account. There is not debt involved.

They exist and I think probably most people have them. What they don't have is money in their bank accounts.
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