February 5, 2008
Cutting Up Credit Cards
My wife and I leveraged a lot credit cards to help with our rehab project at the investment property. We utilized all those 0% interest for a year cards and transferred the balances when the rates readjusted (probably not the best thing to do for our credit scores). The neat thing is that we’ve paid them all off, except for one which will be paid off next month. In the end we had 2-1/2 years of free money for our project and managed the cards wisely.
Despite all this, I hate credit cards and plan on never using them again. I believe many Americans now share my sentiment, especially after they wake up to find to oppressive due balances.
“We don’t use our credit cards anymore,” said Lisa Merhaut, a professional at a telecommunications company who lives in Leesburg, Va., and whose family last year ran up credit card debt it could not handle.
Today, Ms. Merhaut, 44, manages her money the way her father did. Despite a household income reaching six figures, she uses cash for every purchase. “What we have is what we have,” Ms. Merhaut said. “We have to rely on the money that we’re bringing in.”[via NY Times]
As Laura Ingalls once said on Little House on the Prairie, “Pa always said to pay cash on the barrel.” Pa was indeed a wise man.
February 5th, 2008 at 7:43 am
I am of the same mindset right now. I have set up a plan to pay all but one off by end of this year and that one a few months after. I don’t plan to use them anymore also. I am concerned as I plan to save for a home then and wonder if no credit will hurt me on credit reports? But I still plan to do it as I refuse to let them change the rules when I have large balances that effect all my lines of credit causing high interest rates and hardship.
I love that show and watch it often and she sure did say that.
I think the next thing people will default on are car and credit cards and those rates will sore even higher another reason to get out so not to pay someones elses misfortune.
February 5th, 2008 at 4:08 pm
According to the credit card companies, you’re a ‘deadbeat’ instead of a much loved ‘revolver’,
http://wiki.answers.com/Q/Is_it_better_to_pay_the_full_amount_or_the_minimum_amount_on_a_credit_card
February 5th, 2008 at 6:45 pm
Guess I’m a deadbeat then :)
February 5th, 2008 at 6:46 pm
Or should I say, debt beat?
February 5th, 2008 at 7:11 pm
Suffice to say, banks have evolved from their humble roots to become the ultimate profit making machine.
I found this forum, http://www.wiseclerk.com/ it lists discussion boards on 8 microlenders like Kiva and Prosper, maybe this will do to banks what Paypal did to Western Union.
February 6th, 2008 at 6:29 am
I think that people are slowly realizing that they’re being fleeced by the banks and start to move back to sound financial management and budgeting.
This only happens when people start feeling the pinch, once we have “good times” again, people will throw caution to wind and spend.
The big banks know this and will figure out ways to capitalize on our weaknesses.
February 6th, 2008 at 6:55 am
Then there’s not much hope of the Gini coefficient changing any time soon!
“If the world’s population was reduced to a group of 10 people, one person would hold $99 and the remaining nine would share $1….”
February 6th, 2008 at 3:40 pm
I like to use the Pareto distribution instead.