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I cut up my credit cards after having paid them off back in 2003 and closed all the accounts. I don't use credit cards at all. I use my debit card. If I can't afford it, I don't buy it. I have not one iota of concern about my credit score. I'm sure it's pretty low now as I bought my home with cash and paid off my truck back in 2001 and I have no debt, no loans, and I avoid them. I personally think people pay too much attention to it and they get themselves in debt and waste money perpetuating this system just to have a good credit score. I see where it can be necessary to obtain credit, and I've done it, but I don't carry it long and never in the form of credit cards (I used to be a Department Manager for two very large and well known banks both in credit card sales, and on the other side in collections. It's scary out there what people spend and can't pay back. I never want to be caught in that and I can go to sleep at night knowing I own my home free and clear and owe no one any money.
Your speaking my language MOMARK!! We have a small mortgage...but other than that ....nada!! We use American Express and pay one bill every month. We were in debt to the tune o 17k when we lived in California...moved to Texas and paid it off in a year!!
Well, most people who have no debt and own a home free and clear obtained some sort of inheratance somewhere along the line. If everyone was that lucky we would own our homes also.
Some people played the real estate market at the right time. Some left expensive areas for less expensive. My home will be paid off in less than 7 years ( maybe less) and I bought it in 2000....I live below my means instead of above. No inheritence here...not yet anyway. It's amazing how much money you have when your not paying interest on credit cards etc. and you buy a home to live in.....not to impress with.
Well, most people who have no debt and own a home free and clear obtained some sort of inheratance somewhere along the line.
I disagree that debt is inevitable without some sort of windfall. When I was 18 and got my first job (back in the Hippie Era ) I went through the dreaded "new-plastic shopping spree" and got myself ridiculously in debt -- to the point where I had to borrow from my parents in order to make the minimum monthly payments. That was a tremendous wakeup call to me; I was mortified. I cut up every credit card I owned except for one gasoline card for emergencies only, and spent over a year getting myself completely out of debt.
I do have credit cards (I don't see the point of debit cards; I would rather use a credit card and keep my money in my bank, earning interest, even it's only for a few weeks) but I pay the balance in full every month. If I don't already have the money to cover the purchase, I don't buy. When I need a new car, I wait until I have saved up the cash and buy it outright (the last car loan I had was in the 1970s). I did have a mortgage (50%) on the first house I ever owned, but was lucky enough to be able to sell it, and the second one as well, for enough of a profit to enable me to pay cash for the home I am now in. I intend to do the same with this house as well.
I regularly "shop" banks for the best interest rate deals and have found that if you go to one bank and show them that another is giving a better rate on a savings account or CD, they will often contact the Powers That Be and find some sort of unadvertised in-house promo rate to offer you. I've been known to go back to the first bank again and say "Can you do better?" Sometimes they will, sometimes they won't. But it is always worth the try. Banks want to retain your money, and the more of it you have, the more their motivation to keep it. Often it is advantageous to have some money in "Bank B" because banks regularly have promo rates for "new money" that is not available to existing accounts (you can be a customer but the money cannot already be on deposit there).
My philosophy is that the purpose of a bank is to put money into my pocket in the form of paying me interest, rather than to take money out of my pocket in the form of charging me interest on a loan or credit card. So I'm probably one of the few people who applaud when the Fed announces that they are raising the prime rate, or at least not lowering it: When banks make more, they pay more!
Well, most people who have no debt and own a home free and clear obtained some sort of inheratance somewhere along the line. If everyone was that lucky we would own our homes also.
That is funny in my case. Inheritance, lmao. Sure (we all joke that we do not want to be included in their wills as all it would be is bills ). My husband and I are only where we are today because our parents worked hard, we saw their struggles and they taught us well. Today we are not completely "debt free" as we do have a mortgage all but less than 50% of the value of our home and we are the ones giving our parents money and helping them out. We only use credit cards when we have to like for travel expenses (most car rental places will not accept a debit card even if it is also a credit card). I only carry a debit card on me and use it or pay cash most of the time. Which is another weird thing in our society today, you pay someone cash even for a large purchase and they look at you weird as in they have never seen that green stuff before. If we want new furniture we save our money, shop around, buy good quality so that it will last w/ cash. I know many people that make a good living yet they struggle w/ debt and need to be bailed out often by their parents. My kids already know that I won't do that. If they like the lifestyle that we have in order for them to attain such as adults they will have to support it, I will NOT support my adult children in a lifestyle that is over their heads (except in emergencies and such but NOT to bail them out because they can not control their spending).
I now have no credit cards as well. I use my debit card for online and other purchases. If I don't have the money, I can't spend it. About a year ago, as I was switching jobs, I did have a brief time when I needed to pay a couple of utility bills, and almost looked to credit cards again. Instead I tried a payday loan. Not the best idea, I know, but I paid it off immediately, and again, had no debt or temptation to go into it. Credit cards always offer you the opportunity to fall into deep debt within moments. Moderator cut: website
Last edited by AustinTraveler; 04-02-2007 at 06:25 PM..
Reason: Advertising
I used to put all of my bills on my Delta Skymiles AmEx card, then I paid it off in full at the end of every month. It worked well for awhile and got me to Hawaii for free, so I thought it was working out great.
After I got my free ticket, I cancelled my card and went to cash/debit only. I put money in savings at every payday and lived on what was left. What I found out was that I began spending a LOT less because at the moment of purchase, I had to be immediately certain that I had money in the checking account to cover it. I found that I talked myself out of buying a lot of things that I ultimately didn't need. When I was using a credit card, I didn't think about paying for the item until the monthly bill came.
It may not SEEM like much of a difference but it really has been huge in terms of controlling my spending! I consider that to be a hidden downfall of using credit cards for everyday purchases, even if you do pay the balance off in full each month.
I remember the 1980's when so many people lost their homes because of the recessions. I was very young and rates rose as high as 22% on new mortgages. I am just amazed that banks here push people to get mortgages with 0 down or let people borrow on their credit cards for a down payment as long as they have good credit. So many of these people are really young, and then they borrow for furniture and everything under the sun. So many mortgages have been written at low rates, that will soon be up for renewal at rates probably in the 6% range.
As a Canadian I am interested in knowing how you write off your mortgage interest on your income tax. (We can't do that here). Most of our mortgages here are renewable after 5-10 years and the amortization period is 25 years. The market here is still rising in lots of places.
I have read recently that the market in the States is dropping and there are lots of foreclosures. We are not seeing that here yet, even though our economies are very closely related, as your largest trading partner and neighbour.
Assuming you have a reasonable credit rating, what is the formula used to assess how much you can afford, and how is your mortgage structure typically set up. Can you borrow up to 100% too?
Last edited by taigagirl; 04-03-2007 at 10:45 PM..
Reason: error given for length of average mortgage
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) I went through the dreaded "new-plastic shopping spree" and got myself ridiculously in debt -- to the point where I had to borrow from my parents in order to make the minimum monthly payments. That was a tremendous wakeup call to me; I was mortified. I cut up every credit card I owned except for one gasoline card for emergencies only, and spent over a year getting myself completely out of debt. 
). My husband and I are only where we are today because our parents worked hard, we saw their struggles and they taught us well. Today we are not completely "debt free" as we do have a mortgage all but less than 50% of the value of our home and we are the ones giving our parents money and helping them out. We only use credit cards when we have to like for travel expenses (most car rental places will not accept a debit card even if it is also a credit card). I only carry a debit card on me and use it or pay cash most of the time. Which is another weird thing in our society today, you pay someone cash even for a large purchase and they look at you weird as in they have never seen that green stuff before. If we want new furniture we save our money, shop around, buy good quality so that it will last w/ cash. I know many people that make a good living yet they struggle w/ debt and need to be bailed out often by their parents. My kids already know that I won't do that. If they like the lifestyle that we have in order for them to attain such as adults they will have to support it, I will NOT support my adult children in a lifestyle that is over their heads (except in emergencies and such but NOT to bail them out because they can not control their spending).
Credit cards: BOOOO!
