Do You Have High Credit Card Debt?

I did that when I was young and dumb. As soon as I turned 18, I got a credit card and ran that baby up in a very short time. I learned my lesson and can now say I have $0 credit card debt, and have one for emergency only.

Not any more thanks to Brian Wilson @ WSPD. His program caused me to change the station and led me to Dave Ramsey over on WTOD 1560AM and Dave showed me the way out.

I'm a credit card "deadbeat" too. I pay the balance off every month. For that Chase card just reduced the amount of my available credit. Last year Bank Of America raised my interest rate to about 22%. I didn't/don't carry any balance to pay interest on. I'm just waiting for Bank of America to cut my credit line or charge an annual fee. The paying deadbeats are going to have to make up for the non-paying real deadbeats. Thank you Ronnie!

The system is truly messed up in this regards. I agree with Holland.

If you use it responsibly you end up getting shafted. I know the CC companies are a business, but personally if I ran a business I would want to cater to the people who PAY me, instead of relying on those who don't and allow the company to tally up more over draft fees, interest, late fees whatever.

What's the point of racking up tons of paper $$if they may never pay off and snub those are loyal to their obligations.

I did the same as frost when I was 18. CC companies literally swarm college campuses offering freebies just for signing up and most people aren't fiscally responsible enough to use them conservatively. But that is part of growing up.

Glad to say I have only 1 card I use for emergencies (automobile repairs, etc) and pay it off as quickly as possible.

Got caught up in that many many moons ago. first step is to cut the fuggers up.

I havent had a credit card in over 15 years, and dont miss em a bit. Had to learn the hard way, that if you cant afford it, then dont buy it. As far as auto repairs and such, Ive finally (and I mean after YEARS) built up enough in savings to cover that

Nope. Got "clean" some years ago and I have only a mortgage and some deferred student loans: no credit card debt, no car loans, no home equity loans, nada. Given the present economic uncertainty, I picked the right time to be right-side-up.

One of the few truly smart financial moves I have made in my life was to disconnect from the credit matrix.

Zero balance on all cards and loans. No car loan, no mortgage. I use one Visa card for fuel and pay it off each month.

Count me in as one who overspent with all that "free money" in my early 20's. There was that summer semester of college when I didn't qualify for student loans, books pretty much the whole 4-1/2 years, and of course my brilliant idea to put all sorts of expenses related to my first wedding on credit cards. Oh, and then two cross-country moves and periods of unemployment related to those.

Ugh.

At one point I was up to about $25K-$30K in debt once you factored in a car loan, student loans and credit cards. So that makes my current total debt of about $3,400 not look so bad! Sadly it is all credit card debt, but at least I'm below the national average. I am working as aggressively as possible on it, and I've got good interest rates due to some creative balance transferring I did a few years ago -- currently 1.84 percent(!) and 7.9 percent, about half-and-half. Needless to say, I am paying most aggressively on the balance that is at 7.9 percent. But I am also saving for a down-payment on a house, and mortgage loaners are pretty serious about that 20 percent down these days if you want the best interest rates.

Bank of America has "rewarded" my new approach to credit (i.e. paying down balances but never charging anything anymore) with a reduction of my credit line. A SERIOUS reduction, like almost $20,000 in available credit vanished in the past year. They said I was "unlikely to need or use that much credit." Thanks BofA. I don't like you, either. Way to mess up my debt-to-credit ratio. With all the stories I've read, I wouldn't be surprised if they outright closed the account on me within the next six months. In fact, I sort of expect they will. I have a zero balance with them, meaning I am worthless.

The credit scoring system is whack. When I was in such incredible debt, my score was sky-high! When I paid off my car, it went down a tad. And then when I paid off my student loan, it went down a tad more. And then of course BofA took all that available credit away, and my score went down again. (Sigh.)

I'm with Billy. The day I retired, I cut 'em up. Had heard far too many horror stories about retirees and CC troubles. Once in a very great while I have to borrow money off a kid for extensive car repair, but that's about it.

My experience seems to have been different than most. I got my first credit card as soon as I could went I got to college. I charged a few things, always paid it off, and requested credit increases at normal intervals. I got a few more cards, used them all appropriately, and paid them all off all the time. I currently have 3 fee-free cards, all with cash-back or bonus programs, and I use the one that gives me the biggest rewards on the right tasks. (some cards give better gas rebates, etc) Why did so many others manage their credit so poorly? I don't think I ever had any sort of particular education about it, it just seemed to be common sense.

Better use up any accumulated bonus points or whatever. They're about to go away. The conservative CC users are going to shoulder the CC companies losses from those who default.

Thanks for the reminder, Holland. I have bonus points yet to use up. I hardly ever redeemed any because in order to get anything "good," you had to have charged like $20-$30-$40K -- on that one card!

Also, get ready for your previously no-fee cards to start charging you annual fees. I fully expect it to happen to mine.

**

And apparently I'm the sole poster in all of Toledo Talk who carries credit card debt. Who knew?

Heh - you are just the only TT poster with debt willing to share your story, jmleong. Those of us who have been preaching fiscal restraint and paying cash for purchases are crowing now, since our collective wisdom has proven to be correct. Those with TT posters high credit card debt are probably either too depressed to post or are too busy working extra jobs to pay down that debt (and thus too tired to post).

Notice, also, that the low-debt and no-debt folks are mostly 40 years and older. Part of this is due to the fact that we have higher earning potential and/or are retired, but I think this is also a function of growing up in earlier eras when accumulating debt was seen as an impoverishing and wasteful practice. At some point in the early 1980s credit cards became much more socially acceptable and more widely marketed.

Luckily for me my parents and grandparents preached to me about the evils of debt. I still opened up a few accounts and at one point in the late 1980s I had about $8,000 in credit card debt, but I always felt guilty about it, even though I made my payments and gradually eliminated that debt.

I think I have about 4k on cards, Discover is charging me 1.99% for now, so trying to pay big each month before that ends.

I use mine as needed. We just put an unexpected $1,400 car repair bill on one. I'll take the money out of the savings to pay the bii when it comes due. But if I didn't have the money? I need wheels so I would be making payments. I don't think it's wrong to use them if you use them responsibly. I can think of a whopper of a bill for an emergency dental problem a couple of years back. Stuff happens. Not everybody can get a cash reserve large enough for every contingency.

I respectfully disagree, holland, though admittedly some folks are unwilling to make the sorts of concessions needed to stockpile cash. My route to financial well-being involves such factors as the following:

• Buying quality used cars under $1000 and paying cash for them.

• Shopping at the Goodwill, Craigslist, and garage sales for specific items before purchasing new.

• Maxing out employer-match savings accounts.

• Choosing high-deductible insurance policies.

• Choosing low-cost home entertainment options over expensive concerts and first-run films.

Since consciously choosing a lifestyle geared toward voluntary simplicity, my life is less stressful and our savings have increased at a rate beyond our most optimistic expectations. Besides, there is considerable satisfaction in finding less expensive alternatives to the malignant consumerism to which we are constantly exposed by the wonks of Madison Avenue.

I do the max 401k thing, I have high deductibles, rent dvds, etc. But how long does a car under a grand last?

My 1995 Hyundai, which I purchased for $700 in May 2007, is running great. I have plunked about $600 into it in repairs over the course of two years, which means that I have essentially spent about $25 a month on this car excluding gas.

In that time I have put about 20,000 miles on it. Of course, the car is a rather loud purple color and has some surface rust, so my friends sometimes kid me, but I chuckle on the way to the bank.

However, a lot of people are too proud to drive a 15-year-old car, especially a subcompact. If you can keep your ego in check, there are a ton of good-running cars under $1000. Sometimes you need to put a little extra money into them early (especially brakes and front end work), but if you know cars fairly well (or have a knowledgeable friend to accompany you), you can save a ton of money by driving older vehicles.

I also bought an extra car last year, which is a 1994 Saturn. We have driven this car quite a bit, and so far the only repair has been an ignition coil ($150 or so). Both of these cars get 30 MPG or more on the highway, and both are cheap to insure (with no collision, high deductibles, and two drivers with clean records).

LOL, I'm pretty sure my ego's reasonably in check. I live in a 400-square-foot basement apartment -- which is an upgrade from the last place! My car is not quite as old as yours, but it is almost 9 years old. Still runs great, although we're due for some major exhaust work anytime now. It's only got 50,000 miles on it, so I don't expect to be purchasing a new car for quite some time. I did go through a round of age-related repairs at around 35,000 miles but other that, it's been reliable and caused no maintenance worries or hassles. (Uhh, except that one time. When I backed into a van. Ugh.) My collision deductible is high, although I've kept my comprehensive deductible low -- at a cost of around $4.00 a month toward the total premium. Meh.

'Course that high collision deductible meant that when I backed into the aforementioned van, I did have to come up with $470 out of pocket for the repairs.

I refuse to feel ashamed of my debt. I'm not over-the-moon thrilled about it, but I'm not ashamed, either. Actually I feel pretty great about how much of it I've paid off. I have worked very hard to do that, and I continue to do so.

And anywho, Holland is right, not everybody has or can even reasonably acquire a cash reserve on-hand for every emergency. To say otherwise and really, really, (really HM?) mean it is a misunderstanding of America's working class. (And, currently, our non-working class!) It is often an income problem, not necessarily a spending problem, that puts people in some bad situations. There's quite a difference between, say, a guy who charged a family vacation to Disneyworld, and a guy who charged his kid's hospital stay. Not to say there aren't a whole lot of irresponsible people out there, because there are.

I haven’t used CCs in years but I don’t blame others who do. Jmleong, it’s a great feeling to see liabilities dwindle (and assets mount).

For most, accumulating assets takes a long time and many young families don’t want to delay purchases, vacations etc. when they can have it now for the extra cost of interest. I did.
Now, in my early 50s, all I have is a tax deductible but shrinking mortgage.
I know many a person that could not stand to live in a subdivision that didn’t have some silly suburban name and deed restrictions. That’s their problem.
I live in what I consider to be an enviable beautiful home, some would call it modest, others might frown on it but I’m giddy every time I pull in the driveway; BTW, I drive a 21 year-old car (cuz I don’t give a shit!).
Sacrifice, hard work, solid sensible values, and time can make for a comfortable life and retirement and it’s a tenuous balance of liabilities and assets.

Holland refers to the costs of unknowns! Jeez, it never ends does it?! I try to stick to a budget and include a lot for vacations and fun but the “misc” column never seems sufficient.

I haven’t used CCs in years but I don’t blame others who do. Jmleong, it’s a great feeling to see liabilities dwindle (and assets mount).

For most, accumulating assets takes a long time and many young families don’t want to delay purchases, vacations etc. when they can have it now for the extra cost of interest. I did.
Now, in my early 50s, all I have is a tax deductible but shrinking mortgage.
I know many a person that could not stand to live in a subdivision that didn’t have some silly suburban name and deed restrictions. That’s their problem.
I live in what I consider to be an enviable beautiful home, some would call it modest, others might frown on it but I’m giddy every time I pull in the driveway; BTW, I drive a 21 year-old car (cuz I don’t give a shit!).
Sacrifice, hard work, solid sensible values, and time can make for a comfortable life and retirement and it’s a tenuous balance of liabilities and assets.

Holland refers to the costs of unknowns! Jeez, it never ends does it?! I try to stick to a budget and include a lot for vacations and fun but the “misc” column never seems sufficient.

Agreed, offshore, that many people refuse to delay gratification. Saving money is hard work, and most folks are not willing to sacrifice now for future rewards. However, it only takes a few years to build a bank account that can withstand the "emergencies" many people claim they need credit cards to offset.

We also make use of one of those Health Savings Accounts (HSA), which allows us to use pre-tax dollars via payroll deduction to pay for medical, dental, and optical expenses. I am amazed that so few people take advantage of what is essentially a middle-class tax haven.

Good advice Mike. I need to pass that along to my kids.

jmleong: you're not alone. While I dont really have CC debt, my student loans are around 90k (150k by the time they're paid off). sigh.

I just don't have cc debt. I do have student loans. I think I'm up to about 22k so far.

Med school? It sounds like you're gonna have to be a Doc to pay those off.

Student loans are "good debt." (An oxymoron if I ever heard one!)

You might be surprised what having a student loan -- even one "not in repayment" -- does to your credit score. Believe it or not, it loads it up!* Yeah, I don't know why, either. The computers favor installment loans over revolving credit, though. Although I've never seen a credit report with 90K in student loan debt before. Not sure if there's a limit or cut-off point when it no longer helps, but hurts your score.

Good luck to you both. A student loan is an investment. Just don't go crazy with it; borrow as little as you absolutely can. You don't have to take the whole amount that you qualify for.

(*Unless you're supposed to be paying on it and you're not doing so.)

jmleong, i agree about the student loans, it knocks your debt to income ratio out of whack if you have too much, regardless if its listed in the positive side of your report.

I don't currently have high credit card debt. Balance is about $1,500. I was at zero a few years ago, but my husband has been laid off several times in the past couple of years. We had to charge a few things while he was laid off. Then we'd start to pay it off, and he'd get laid off again.

Since his first layoff, we've trimmed a lot out of the household budget. So, I don't anticipate accumulating any more credit card debt...just need to pay off what we accumulated during the course of those initial layoffs.

(I did accumulate a substantial amount of credit card debt during college/the first few years afterwards...about $8,000. But I managed to pay it all off before I got married and had kids. This is the first time since starting my family that I've actually had a credit card balance. Sigh.)