Not buying stuff sucks a lot!!

[m-Kresol]

I agree with Muadzin in regards to our views of the north american banking system. I'm not really aware of how it works, but it often sounds like mambo-jumbo to me, because it's so different. Maybe it's also because I was never in any financial troubles and was lucky in that way, but I also have never bought a car, house or appartement yet.

Good luck on your diet, Jimi. I hope your new house has space for a guitar-room + storage

[bsoncini]

As someone who has lived in both the US and Europe I can say the system in the US is pretty messed up. I know no one here in France that has a credit card. Just debit. We are not encouraged to go into debt like in the US. It also helps that no one goes into massive debt for university or health care costs also.

If you use a credit card and pay it off Everytime in the US there are often some nice advantages, airline miles, money back, etc. But if you don't pay it back you get screwed. If everyone paid on time there would be no reason for them to exist.  They really prey on 18-21 year olds who recklessly buy crap and go into a lot of debt young. About 10 years ago banks would give mortgages to almost anyone that had a pulse.

Me and my wife have been searching to buy an apartment in Paris. I have no credit history at all in France and she has zero also. The bank only asked us for work contracts, pay stubs, bank statements and monthly statements from our landlords.

Anyway. Good luck in the house search. It can be pretty long and frustrating. Hope you find what you're looking for.

[pickdropper]

As someone who has lived in both the US and Europe I can say the system in the US is pretty messed up. I know no one here in France that has a credit card. Just debit. We are not encouraged to go into debt like in the US. It also helps that no one goes into massive debt for university or health care costs also.

If you use a credit card and pay it off Everytime in the US there are often some nice advantages, airline miles, money back, etc. But if you don't pay it back you get screwed. If everyone paid on time there would be no reason for them to exist.  They really prey on 18-21 year olds who recklessly buy crap and go into a lot of debt young. About 10 years ago banks would give mortgages to almost anyone that had a pulse.

Me and my wife have been searching to buy an apartment in Paris. I have no credit history at all in France and she has zero also. The bank only asked us for work contracts, pay stubs, bank statements and monthly statements from our landlords.

Anyway. Good luck in the house search. It can be pretty long and frustrating. Hope you find what you're looking for.

I would tend to agree with this.  I assume that if it can't be paid back by the end of the month, I can't afford it in the first place; credit cards are for convenience.

Now, there are certainly emergency situations, but I'm not paying over 10% interest on a steak dinner.

[TNblueshawk]

I would add this bit for the Europeans.

For the past few decades we have used a credit card to our advantage. Bsoncini reminded me of this with the airline miles. We obtained a Southwest Visa many years ago. When we would make big purchases, furniture or whatever comes around in life, we would purposely put it on the credit card and then turn around and write them a check to pay it off. Now, the key is the do that last part of course. By us not taking advantage of this it seemed to me we were literally tossing away free money as in plane flights for vacation.

To this day with the same Southwest Visa, I have not paid for a plane flight in many years, 6 or 7 maybe, and my wife has flown for free many times. Admittedly part of that is I travel some for work so that helps build the points but then if I don't have the credit card then it would not build towards anything.

Like anything in life, manage the situation to your advantage assuming you have the means, which we did not very early on but later on did.

[alanp]

I'll add that with my first car, while I was paying off the loan with the pre-arranged payments, I was also saving up at the same time, and paid the balance off halfway through the repayment period.

I don't think the finance company was happy with that (probably because they lost the interest for the second half), since when I bought my second car (always check your radiator levels before six hour trips, people), they told me to bugger off.

I went with a second company who were happy to deal with me, no problem. The truly funny part was a month later, when I received a letter from the first company who asked me to consider them in future when buying a new car...

[dan.schumaker]

Sometimes it does make sense to have loans/things on the credit card.  Like was mentioned, I have totally taken advantage of free miles for credit cards.  American Express used to have a deal where if you put $2000 on a credit card, you got the equivalent of $500 in flyer miles, or at one time, $500 in gift cards to like Home Depot.  I put $2000 of everyday expenses on the card, paid it off right away, and used the extra gift cards to buy my Table Saw, Miter Saw, Spindle Sander and Planer.  So I made out pretty good on those.

Another example, my wife and I just bought a new car, planning on buying in cash.  The dealership was offering a deal if you finance $10,000, they take $750 off.  Ok, I'll pay about $80 in interest to save $750...

[jimilee]

No interest with credit cards is the only way to go for me.


Sent from my iPhone using Tapatalk

[bsoncini]

Taking advantage of the credit card benefits is definitely nice. I never did it when I was is the US though, I guess I was too young.  But it seems to me as part of the problem. I am an American and french citizen and it might be the French part of me talking now.

They entice people to buy things with credit with the benefits of airline miles, money back, lower car rates, etc. But they are hoping that something happens in your life like a layoff, unexpected medical problem, etc. And you can't pay it off and you go into debt.

In a weird way it is a sort of redistribution of wealth. The less fortunate who are using credit cards to pay for credit cards paying for people who are more fortunate for free fights, table saws etc. For many of these people it is a vicious circle. Get a credit card to pay off the other, take a quick payday loan to pay the mortgage.

I'm not judging anyone that takes advantage of the benefits. If you can and it's offered why not. But it's not just people who are stupid and make bad decisions that are funding it

I guess this is a bit different from building a credit score to buy a house. But nonetheless interesting. At least for me.

[pickdropper]

Taking advantage of the credit card benefits is definitely nice. I never did it when I was is the US though, I guess I was too young.  But it seems to me as part of the problem. I am an American and french citizen and it might be the French part of me talking now.

They entice people to buy things with credit with the benefits of airline miles, money back, lower car rates, etc. But they are hoping that something happens in your life like a layoff, unexpected medical problem, etc. And you can't pay it off and you go into debt.

In a weird way it is a sort of redistribution of wealth. The less fortunate who are using credit cards to pay for credit cards paying for people who are more fortunate for free fights, table saws etc. For many of these people it is a vicious circle. Get a credit card to pay off the other brake a quick payday loan to pay the mortgage.

I'm not judging anyone that takes advantage of the benefits. If you can and it's offered why not. But it's not just people who are stupid and make bad decisions that are funding it

I guess this is a bit different from building a credit score to buy a house. But nonetheless interesting. At least for me.

It does indeed happen like that.  Entirely too many people carry heavy credit card debt.  I've had friends that had maxed out cards and were paying absurd amounts of interest each month; and they had very good jobs.  One in particular furnished his house that way.  It's really a rough way to handle finances.  I had another friend who ended up selling their house and moving his family back with his parents for a year so he could step back, reduce living expenses simply to clear debt and start over.  It was a smart, if somewhat drastic move.

As far as the emergency scenarios popping up, all of that underlies the importance of actually having savings.  If so, something can usually pop up and credit cards can still be paid off at the end of the month.  That involves not living above your means in the first place, which is really what all of this boils down to, I suspect.  Credit cards themselves are just a means of convenience.  It's when people using them as a means of financing that things can get dicey.

[jimilee]

When I divorced my last wife, I found out she had over 60k in credit card debt.
I was blown away, still am.


Sent from my iPhone using Tapatalk

[alanp]

The North American finance business really relies on debt to create wealth. It's not a good longterm wealth creator, though.

[EBRAddict]

The rewards (miles, cash back) are just a way to help customers to rationalize/justify over-consumption. It's a artful way the marketers inject noise into the decision-making process.

[Maple Larynx]

No judgement toward any individuals or financial plan is intended in the following contribution to this thread.

About 10 years ago I heard a financial counselor indicate that credit card users spend about 12% more than non-card users.  At that time I used cards for the convenience and never carried a balance.  However, after hearing the spending statistic, Mrs Larynx and I cut up all our cards, paid off the car loan, closed and 'froze' all the credit accounts, and started paying cash for everything.  Our goal is to never borrow another dime. 

I recognize that this thread has migrated from G.A.S. to Debt and finances so I'll try to bring it back around...Jimi is right; 'not buying stuff sucks a lot'...until a person finds contentment.  I search for it and find it on occasion, but I have to be careful, because too much contentment sometimes gives me G.A.S.

[stringsthings]

The older I get, I appreciate more of what I have.  That doesn't stop me from wanting to buy new things.
It just helps keep things in perspective.  America is a consumer nation.  It's pretty much what we do.
We've just been brought up that way.  I'm as guilty of the next man of wanting more and more, but I've gotten
better at saying "no".  ( or at least, "wait" )

One thing that I really love about DIY, is that it helps me appreciate what I have.
It's very cool to buy something, but it's even cooler to have something cool that you made with your own two hands.

[bsoncini]

When I divorced my last wife, I found out she had over 60k in credit card debt.
I was blown away, still am.


Sent from my iPhone using Tapatalk

Hopefully she took that debt with her in the divorce.