Comments on: Credit Card Debt http://nslog.com/2008/03/21/credit_card_debt The Weblog of Erik J. Barzeski Tue, 13 May 2008 03:20:59 +0000 http://wordpress.org/?v=2.5.1 By: Freddy http://nslog.com/2008/03/21/credit_card_debt#comment-46854 Freddy Tue, 25 Mar 2008 06:31:25 +0000 http://nslog.com/2008/03/21/credit_card_debt#comment-46854 A couple things to remember here: (a) Some people use credit cards as money for startups or personal businesses. This may not be the best idea in the world, but lots of small businesses have done it. Not hard to reach these astronomical debts this way. (b) You can charge medical care. As crappy as that sounds, it is also more common than you might think. Also an easy way to have very high credit debt. (c) Once you jack up huge amounts of credit debt, the additional fees added each month are ENORMOUS. I'm sure you all already know what a ripoff credit cards can be (high interest, fees, etc). Now imagine the same thing once you have $100k as a balance. Yowza. I suspect that if someone has, say, 60k in credit card debt that it wouldn't be very hard to reach 100k without purchasing another thing with the cards (just interest and fees alone). A couple things to remember here:

(a) Some people use credit cards as money for startups or personal businesses. This may not be the best idea in the world, but lots of small businesses have done it. Not hard to reach these astronomical debts this way.

(b) You can charge medical care. As crappy as that sounds, it is also more common than you might think. Also an easy way to have very high credit debt.

(c) Once you jack up huge amounts of credit debt, the additional fees added each month are ENORMOUS. I'm sure you all already know what a ripoff credit cards can be (high interest, fees, etc). Now imagine the same thing once you have $100k as a balance. Yowza. I suspect that if someone has, say, 60k in credit card debt that it wouldn't be very hard to reach 100k without purchasing another thing with the cards (just interest and fees alone).

]]> By: Erik J. Barzeski http://nslog.com/2008/03/21/credit_card_debt#comment-46846 Erik J. Barzeski Mon, 24 Mar 2008 20:13:11 +0000 http://nslog.com/2008/03/21/credit_card_debt#comment-46846 [quote comment="46845"]Those people carrying those ridiculous balances are paying for those Borders and Target and Circuit City gift cards that I get from my credit card company once every few months. :-)[/quote] Interesting - we just get "points" which equates to dollars. Something like around 1-4% (4% is on gas, most everything else is 1 or 2%). Currently we have $120 already this year. They just apply it to our December balance every year. Tim Buchheim said on March 24, 2008:

Those people carrying those ridiculous balances are paying for those Borders and Target and Circuit City gift cards that I get from my credit card company once every few months. :-)

Interesting - we just get "points" which equates to dollars. Something like around 1-4% (4% is on gas, most everything else is 1 or 2%). Currently we have $120 already this year. They just apply it to our December balance every year.

]]> By: Tim Buchheim http://nslog.com/2008/03/21/credit_card_debt#comment-46845 Tim Buchheim Mon, 24 Mar 2008 19:25:23 +0000 http://nslog.com/2008/03/21/credit_card_debt#comment-46845 I did carry balances fairly often in the first two years or so that I was out of college, mostly due to living in an area where rents were ridiculous (and I had a great bargain, only $1350/month, in an apartment which could have easily gone for $1800.). I do the "put everything on the card to get reward points" thing but pay off my balance every month. Those people carrying those ridiculous balances are paying for those Borders and Target and Circuit City gift cards that I get from my credit card company once every few months. :-) I did carry balances fairly often in the first two years or so that I was out of college, mostly due to living in an area where rents were ridiculous (and I had a great bargain, only $1350/month, in an apartment which could have easily gone for $1800.). I do the "put everything on the card to get reward points" thing but pay off my balance every month. Those people carrying those ridiculous balances are paying for those Borders and Target and Circuit City gift cards that I get from my credit card company once every few months. :-)

]]> By: DJ http://nslog.com/2008/03/21/credit_card_debt#comment-46842 DJ Mon, 24 Mar 2008 16:49:13 +0000 http://nslog.com/2008/03/21/credit_card_debt#comment-46842 I have friends who've gone through med school and racked up $200,000 plus in debt. Some of that is tuition, of course. But once you get past $100,000 in overall debt, you do seem to pick up steam. I knew one guy who had more than 100K in credit card debt alone – paid for everything on his card and paid the monthly minimums only. He wasn't just buying food and books, but electronics, concert and plane tix, etc. Took him several years as a well-paid doc to pay it down and improve his credit enough to buy a house. Personally, we use our cards like Erik - get the rewards, but pay the balance every month. I remember feeling bad about having a balance of $600 on my credit card when I graduated from college. Never again! I have friends who've gone through med school and racked up $200,000 plus in debt. Some of that is tuition, of course. But once you get past $100,000 in overall debt, you do seem to pick up steam. I knew one guy who had more than 100K in credit card debt alone – paid for everything on his card and paid the monthly minimums only. He wasn't just buying food and books, but electronics, concert and plane tix, etc. Took him several years as a well-paid doc to pay it down and improve his credit enough to buy a house.

Personally, we use our cards like Erik - get the rewards, but pay the balance every month. I remember feeling bad about having a balance of $600 on my credit card when I graduated from college. Never again!

]]> By: The Plaid Cow http://nslog.com/2008/03/21/credit_card_debt#comment-46839 The Plaid Cow Mon, 24 Mar 2008 13:23:25 +0000 http://nslog.com/2008/03/21/credit_card_debt#comment-46839 Yes, but at a rate that is over two percentage points lower than my mortgage. Yes, but at a rate that is over two percentage points lower than my mortgage.

]]> By: Erik J. Barzeski http://nslog.com/2008/03/21/credit_card_debt#comment-46838 Erik J. Barzeski Mon, 24 Mar 2008 12:49:25 +0000 http://nslog.com/2008/03/21/credit_card_debt#comment-46838 FWIW, I don't consider using a credit card and paying it off monthly to be "credit card debt." Carey and I earn rewards for using our credit card, so we buy all kinds of stuff each month on the CC… and then pay it off when the bill comes. So if that wasn't obvious by the question, that's what I'm asking: are you carrying a balance between months? FWIW, I don't consider using a credit card and paying it off monthly to be "credit card debt." Carey and I earn rewards for using our credit card, so we buy all kinds of stuff each month on the CC… and then pay it off when the bill comes.

So if that wasn't obvious by the question, that's what I'm asking: are you carrying a balance between months?

]]> By: Bryan http://nslog.com/2008/03/21/credit_card_debt#comment-46834 Bryan Mon, 24 Mar 2008 09:07:10 +0000 http://nslog.com/2008/03/21/credit_card_debt#comment-46834 I'm with you, Jeff. My credit card balance is at about $350 and will be paid off soon. I use it to get stuff quickly without having to corral funds together. Then I pay it off. I've done it a few times, but I'm still relatively new to the whole credit thing. Quite frankly it frightens me, so I avoid it when I can. I'm with you, Jeff. My credit card balance is at about $350 and will be paid off soon. I use it to get stuff quickly without having to corral funds together. Then I pay it off. I've done it a few times, but I'm still relatively new to the whole credit thing. Quite frankly it frightens me, so I avoid it when I can.

]]> By: Jeff http://nslog.com/2008/03/21/credit_card_debt#comment-46829 Jeff Mon, 24 Mar 2008 06:32:43 +0000 http://nslog.com/2008/03/21/credit_card_debt#comment-46829 I voted "yes" - but it's down to about $500, to be paid off in the next month or two, and i generally charge up and pay off about that much a month... So that's pretty close to "no" - or would be, if the question were "Do you pay interest on your credit card?" School loans, and vehicle loans, now that's a different story. I voted "yes" - but it's down to about $500, to be paid off in the next month or two, and i generally charge up and pay off about that much a month...

So that's pretty close to "no" - or would be, if the question were "Do you pay interest on your credit card?"

School loans, and vehicle loans, now that's a different story.

]]> By: Alan http://nslog.com/2008/03/21/credit_card_debt#comment-46824 Alan Mon, 24 Mar 2008 03:05:40 +0000 http://nslog.com/2008/03/21/credit_card_debt#comment-46824 As of today, yes but I haven't sent in my expense reports for work yet. :grin: $140k? Wow, that is unbelievable. As of today, yes but I haven't sent in my expense reports for work yet. :grin:

$140k? Wow, that is unbelievable.

]]> By: Mike http://nslog.com/2008/03/21/credit_card_debt#comment-46822 Mike Sun, 23 Mar 2008 23:20:27 +0000 http://nslog.com/2008/03/21/credit_card_debt#comment-46822 Don't buy what you can't afford, and pay your bills on time. It's so easy. Then again, I haven't yet bought a house or a car, so I'm sure eventually I'll need some help to buy something big...but it blows my mind that people will buy stupid stuff on credit, as if they have extra money to burn. Don't buy what you can't afford, and pay your bills on time. It's so easy.

Then again, I haven't yet bought a house or a car, so I'm sure eventually I'll need some help to buy something big...but it blows my mind that people will buy stupid stuff on credit, as if they have extra money to burn.

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