How Americans Get Out of Credit Card Debt • Hacker News Board

Re: How Americans Get Out of Credit Card Debt

#91

Post by zizee » Sat, Feb 05, 2011, 12:52 AM UTC

mkr-hn wrote: post #79

joubert wrote: post #72

Earlier quoted context omitted.

It's not something I'd do, but I have a hard time blaming someone for making that sacrifice. a) Why is it that you won't do it? b) The issue is that they're sacrificing the financial security of their kids by living on the edge and that is irresponsible if you're someone's guardian. Imagine a company/government says we'll go into heavy debt because we want to give our shareholders/citizens a good shot - is that not i…

Mainly because I don't have any plans to have kids, but I'm also not the sort to take that kind of risk. I'd rather supplement a bad school with good resources at home and plenty of guidance.

I would say that you haven't thought about the power of a bad peer group can have over a good kid.

I didn't think about that stuff until I had kids myself, so it is not that surprising, given your position, that you haven't thought of that.

Re: How Americans Get Out of Credit Card Debt

#92

Post by nostrademons » Sat, Feb 05, 2011, 12:53 AM UTC

ramchip wrote: post #84

nostrademons wrote: post #73

Earlier quoted context omitted.

Unless you're going to a top-tier college and majoring in a marketable skill, that is a bad idea too. There's a bubble in higher education where many people are being promised a good life merely by going to college. These people get out of college, find out that such a good life was just a mirage, and then find out that the $200K in debt they took on for it wasn't such a great idea either. The responsible thing to do…

> The responsible thing to do there is to just say no. Or just go to a college that doesn't charge $200k in fees?

That works too, if there are any left.

Actually, a bunch of top colleges will give you a full ride if you're under a certain income, so if you get one of those packages, take it.

Re: How Americans Get Out of Credit Card Debt

#93

Post by lutorm » Sat, Feb 05, 2011, 12:57 AM UTC

rick888 wrote: post #78

joubert wrote: post #67

Earlier quoted context omitted.

The parent wrote: "They did it because they overextended themselves to get a house in a good school district and then one of them lost their job or they had a medical emergency." So, they overextended themselves and THEN lost a job or had a medical emergency. The problem is people choose to live on the edge financially, which I think is irresponsible, especially if you have others who depend on you for their life.

"So, they overextended themselves and THEN lost a job or had a medical emergency. The problem is people choose to live on the edge financially, which I think is irresponsible, especially if you have others who depend on you for their life." This is exactly true. Someone above mentioned that people buy houses, to get into a good school district. Why can't we allow people in bad school districts to go to another school…

Teacher's unions???

Why don't we have state-wide, or at least city-wide financing of schools? That would take away the school district issue entirely.

Re: How Americans Get Out of Credit Card Debt

#94

Post by lutorm » Sat, Feb 05, 2011, 12:58 AM UTC

giardini wrote: post #89

lutorm wrote: post #47

Earlier quoted context omitted.

Elizabeth Warren said that in their bankruptcy study, the vast majority of people who filed for bankruptcy didn't do it because they "bought things they didn't need". They did it because they overextended themselves to get a house in a good school district and then one of them lost their job or they had a medical emergency. It's easy to paint those people as irresponsible, but according to her, it's very far from the…

tutorm states: "They did it because they overextended themselves to get a house in a good school district " That cannot be true. Furthermore you are taking her too literally and/or misunderstanding her intent. What she actually said was ( http://www.guernicamag.com/interviews/1485/generation_gap/ ): “Families with children are tightening the belt one more notch,” she says, “are working extra hours, are sending both p…

You're right that I condensed her "Two-income trap" book into a single sentence. But she really harps over and over at this fact.

Re: How Americans Get Out of Credit Card Debt

#95

Post by updog » Sat, Feb 05, 2011, 1:22 AM UTC

nostrademons wrote: post #71

lutorm wrote: post #47

Earlier quoted context omitted.

Elizabeth Warren said that in their bankruptcy study, the vast majority of people who filed for bankruptcy didn't do it because they "bought things they didn't need". They did it because they overextended themselves to get a house in a good school district and then one of them lost their job or they had a medical emergency. It's easy to paint those people as irresponsible, but according to her, it's very far from the…

I remember a study on general aviation plane crashes. They found that very few plane crashes came about because the pilot made a single, obvious mistake. Instead, the common pattern was a series of missteps, each so small that you couldn't properly call it a "mistake" in and of itself, the pilot was just cutting corners on the recommended safety margin. And then something happened that was out of the pilot's control,…

Man, you are clearly speaking from a position of privilege on that one. How the hell do you hold back 6-12 months salary when you can barely afford the rent, utility bills and the costs of raising some kids to begin with?

Haha, just hold back 6 months salary! You make it sound so easy!

It's not that they didn't prepare, it's that many of them have no means to prepare, and barely have the means to continue as is.

Many also believe that it is worth risking living on the edge to support a better school for their kids (ideally breaking the cycle), than moving to project housing and dangerous gang-controlled areas in order to enjoy their "margin of safety". I can't fault them for that.

And, if you're in such a position, and aren't fortunate enough to have your area of expertise and interest involving computers, good luck getting a job without a degree. So what do they do to pay for the outrageous tuition costs these days? Take a giant loan from Sallie Mae.

Now you have two problems.

Re: How Americans Get Out of Credit Card Debt

#96

Post by Qz » Sat, Feb 05, 2011, 1:49 AM UTC

updog wrote: post #95

nostrademons wrote: post #71

Earlier quoted context omitted.

I remember a study on general aviation plane crashes. They found that very few plane crashes came about because the pilot made a single, obvious mistake. Instead, the common pattern was a series of missteps, each so small that you couldn't properly call it a "mistake" in and of itself, the pilot was just cutting corners on the recommended safety margin. And then something happened that was out of the pilot's control,…

Man, you are clearly speaking from a position of privilege on that one. How the hell do you hold back 6-12 months salary when you can barely afford the rent, utility bills and the costs of raising some kids to begin with? Haha, just hold back 6 months salary! You make it sound so easy! It's not that they didn't prepare, it's that many of them have no means to prepare, and barely have the means to continue as is. Many…

If you're willing to move, and live with roommates, it's fairly easy to live comfortably (assuming no children) on 12k/year total. Assuming you're making minimum wage-ish, that's 8k to put in the bank every year.

Re: How Americans Get Out of Credit Card Debt

#97

Post by jfrumar » Sat, Feb 05, 2011, 2:08 AM UTC

rick888 wrote: post #78

joubert wrote: post #67

Earlier quoted context omitted.

The parent wrote: "They did it because they overextended themselves to get a house in a good school district and then one of them lost their job or they had a medical emergency." So, they overextended themselves and THEN lost a job or had a medical emergency. The problem is people choose to live on the edge financially, which I think is irresponsible, especially if you have others who depend on you for their life.

"So, they overextended themselves and THEN lost a job or had a medical emergency. The problem is people choose to live on the edge financially, which I think is irresponsible, especially if you have others who depend on you for their life." This is exactly true. Someone above mentioned that people buy houses, to get into a good school district. Why can't we allow people in bad school districts to go to another school…

Times your "probably less than 5%" by twelve and you're closer to the truth:

http://articles.cnn.com/2009-06-05/health/bankruptcy.medical...

Re: How Americans Get Out of Credit Card Debt

#98

Post by lionhearted » Sat, Feb 05, 2011, 2:25 AM UTC

geuis wrote: post #22

So my question is what about people that aren't in debt, but need help improving their credit score? I had a lot of debt from about 5-10 years ago and it killed my credit score. The debt has all been paid off for a few years, I haven't had credit cards in years, and I still have a few notices from closed accounts that won't fall off for a few years. So I'm currently doing what I can to remove the closed notices and h…

Go to your bank and ask about a secured loan. Basically, you put money in a CD and get 2% or whatever. The CD sits at the bank. You then get a loan for the same amount as the CD at 3% or so.

They've got your money in the bank, so it's no risk for them. You put the loan on auto-pay, you lose 1% per year to do this, but you get 12 of these kinds of transaction credits on your account which is good because they count differently than credit card.

I did it with $1100 and it cost me $10 or $15 or whatever, but I went from not eligible for a credit card with a limit over $250 to getting an uncapped charge card with good rewards in 12 months, which was very helpful in business. I don't know about getting the bad transactions off, but getting good ones on is important too. I don't know what the lowest amount you can do it with is, but I did it with two loans: one $1000 and one $100, and it worked well.

Re: How Americans Get Out of Credit Card Debt

#99

Post by anamax » Sat, Feb 05, 2011, 2:34 AM UTC

jfrumar wrote: post #97

rick888 wrote: post #78

Earlier quoted context omitted.

"So, they overextended themselves and THEN lost a job or had a medical emergency. The problem is people choose to live on the edge financially, which I think is irresponsible, especially if you have others who depend on you for their life." This is exactly true. Someone above mentioned that people buy houses, to get into a good school district. Why can't we allow people in bad school districts to go to another school…

Times your "probably less than 5%" by twelve and you're closer to the truth: http://articles.cnn.com/2009-06-05/health/bankruptcy.medical...

> Times your "probably less than 5%" by twelve and you're closer to the truth:

Nope. They miscounted and several other problems. (When someone goes broke because they're an alcoholic and lose their job, do you really think that's a medical bankruptcy?)

Google "mcardle atlantic medical" and start reading.

Re: How Americans Get Out of Credit Card Debt

#100

Post by Helianthus16 » Sat, Feb 05, 2011, 2:45 AM UTC

nostrademons wrote: post #71

lutorm wrote: post #47

Earlier quoted context omitted.

Elizabeth Warren said that in their bankruptcy study, the vast majority of people who filed for bankruptcy didn't do it because they "bought things they didn't need". They did it because they overextended themselves to get a house in a good school district and then one of them lost their job or they had a medical emergency. It's easy to paint those people as irresponsible, but according to her, it's very far from the…

I remember a study on general aviation plane crashes. They found that very few plane crashes came about because the pilot made a single, obvious mistake. Instead, the common pattern was a series of missteps, each so small that you couldn't properly call it a "mistake" in and of itself, the pilot was just cutting corners on the recommended safety margin. And then something happened that was out of the pilot's control,…

In that story, the "irresponsible" part is that they took a gamble in order for their kids to grow up in a better neighborhood, and lost.

Sounds like a somewhat calculated risk rather than irresonsibility to me.

also everything people have said about your position of privilege