Credit Card Debt

[cturne]

Darn it - I had a big long rant about Bank of America that I just finished and something happened when I tried to submit and I lost it! - In a nutshell - STAY AWAY FROM BOA!

 

[Ðanisty]

Darn it - I had a big long rant about Bank of America that I just finished and something happened when I tried to submit and I lost it! - In a nutshell - STAY AWAY FROM BOA!

I've gotta second that! I don't know what your story is, but BOA screwed us over.

 

[kadzbiz]

I hate most banks, that's why I'm not with any. The four major ones in Australia keep closing their small town branches and provide less and less customer service and yet keep hiking up their fees and charges. I'm with a police co-op that is pretty reasonable, but my main financial institution is with a mortgage service. I live in Bendigo where the Bendigo Bank started and it has grown to be very big in the past 10 years, and they're pretty good, if I had to change to a bank.

 

[FFH]

From what I understand a credit card is actually a bit safer to use then a debit card. If someone steals your credit card you usually aren't liable for the charges. If someone steals your debit card they can empty out your checking account.

I could be wrong about that though.

Why do I use a credit card? A couple of reasons.

1. It's easy
2. I get an online record of all of my purchases so I can reconcile them more easily (of course, that means that the bank also has a lot of information on me and my spending patterns, so this could cut both ways)
3. Rewards points
4. I get to earn interest on my money for a few extra days each month - and it doesn't cost me anything (free loan)

Good points, but I've found that if I have a credit card, it's mentally draining for me, because I really don't pay attention to the bill, until I get it and I really don't need any negative surprises..

With a debit card I sleep at night, knowing my bills are paid and no unexpected bills will be arriving in the mail

I save time not having to write a check each month, filling out the form and mailing off the bill and on postage, what a hastle...

I have all my bills automatically withdrawn from my checking each month...

I have no bills to worry about. They are all automatically paid...

Worry free living is the way to go, I don't care how much Discover card wants me to sign up for their card and get 1 to 5 percent cash back on "selected" purchases....

My credit score is off the charts and I'll keep it that way...by not signing up with any credit card companies...
.
Each credit card you take out takes a few points off your score.

little things like calling about insurance quotes, takes a few points off your score..

Checking different mortgage rates takes points off your score..

That's my simple little credit card rant...

 

[Bishka]

I've gotta second that! I don't know what your story is, but BOA screwed us over.

I feel that way about Wells Fargo.

 

[FFH]

Just for fun:







Let's say you have $2,000 in credit card debt at 18% interest (I searched for the average debt and rate online). The minimum payment on a credit card is usually 2.5% of the balance. So -

Month 1: Beginning balance - $2,000.00​

Interest - $ 27.78​

Minimum Pmt - $ 50.00​

Ending Balance - $1,977.78​

Month 2: Beginning balance - $1,977.78​

Interest - $ 27.47​

Minimum Pmt - $ 49.44​

Ending Balance - $1,955.81​

Etc.​

Anyone want to take a wild guess at how long it is going to take you to pay off this $2,000 just paying the minumum each month?

Looks like no one took a guess...

hmmm I want to say 9 years, but it's probably some crazy amount like 12 or 15 years...

I honestly don't know, so enlighten us..

 

[FFH]

Here's a good link that may give us some clues as to how long it would take to pay off that particular credit card situation SoyLeche has posted.

Loan calculator

See your FICO Score Range -- Free

Calculate the real cost of your debt

What will it take to pay off your credit card?

The true cost of paying the minimum
VIEW ALL

 

[FFH]

So I clicked on this link what will it take to pay off your credit card?

and the time it would take to pay off a 2000 dollar credit card debt at 18 percent interest, with a minimum payment of 50 dollars a month (didn't do the minimum as suggested by Soy, which would take longer, but just did a flat 50 dollar amount for each payment) is 61 months or 5 years and 1 month...

2000 dollar credit card debt
18 percent interest
50 dollar a month payment

5 years and 1 month to pay off

Edit: okay tried to enter the lowest possible amount on this calculator What will it take to pay off your credit card?

which was 31 dollars, which would take 204 months or 17 years.

2000 dollar credit card debt
18 percent interest
31 dollar a month payment (just enough to cover the interest and make a small payment)

204 months or 17 years


Don't see a calculator that factors in minimum required payments, which obviously changes each month...

So we can assume Soy's scenario is between 5 years and 17 years...

 

[michel]

Michel, you're my hero! Perhaps if more people took advantage of them like this they might be more responsible members of society. I detest predatory lending and, sadly, it's so profitable that the majority of lending (at least in the United States) is predatory.

By the way, I have no credit cards, only the debit card for my checking account. My only debt is from student loans and the car payment. That's it. I haven't had a credit card in over ten years.

I am no hero; just plainly ready to accept "gifts" if they are offered.

I worked for a bank for 25 years; I thought (and still do so) that financial institutions have become so greedy (maybe profit - orientated would be a better word), that they are determined to lend as much as possible to those who can least afford to borrow.

During my last years in the bank, I spoke up, and made my views known - which didn't go down well. To tell the truth, maybe I was "fortunate" to become so stressed out as to have been eligible for medical retirement; with the views I voiced, I should - by rights - have either been sacked, or made redundant. I could quote you cases (in general terms) of how vile the lending was - which, now is even worse.....

 

[SoyLeche]

So I clicked on this link what will it take to pay off your credit card?

and the time it would take to pay off a 2000 dollar credit card debt at 18 percent interest, with a minimum payment of 50 dollars a month (didn't do the minimum as suggested by Soy, which would take longer, but just did a flat 50 dollar amount for each payment) is 61 months or 5 years and 1 month...

2000 dollar credit card debt
18 percent interest
50 dollar a month payment

5 years and 1 month to pay off

Edit: okay tried to enter the lowest possible amount on this calculator What will it take to pay off your credit card?

which was 31 dollars, which would take 204 months or 17 years.

2000 dollar credit card debt
18 percent interest
31 dollar a month payment (just enough to cover the interest and make a small payment)

204 months or 17 years


Don't see a calculator that factors in minimum required payments, which obviously changes each month...

So we can assume Soy's scenario is between 5 years and 17 years...

(I already gave the answer. Highlight the area between my "spoiler" tags)

 

[Reverend Rick]

Many people cannot understand that Credit cards cannot boost your lifestyle and give you the ability to live beyond your means.

If you want to buy goods and services on line, rent a car, reserve a hotel room, you need to have a credit card. If you do not pay the balance back to zero sometime in a 12 month period, you are living beyond your means and now you will have to live below your income plus interest to get out of debt.

I used to go on vacation and use a credit card to pay for everything, but I did not get to take another vacation till the card was paid off.

I have bought things on sale and saved money using a credit card before as well.

I have improved houses and flipped them with credit cards as well.

Some people do not have the ability to understand that credit cards are not free candy. You have to pay the piper sometime.

If your car breaks down and needs repair and you are out of town, a credit card can be a life line. If you buy what ever you like when ever you like and pay the minimum payment each month, the life line can be a hang man's noose.

 

[Ðanisty]

Yeah, but not everyone who gets screwed by a credit card company is being irresponsible, Rick.

 

[Reverend Rick]

You mean like when you pay your card late or do not read all of the terms of agreement?

 

[TurtleGirl]

I thought (and still do so) that financial institutions have become so greedy (maybe profit - orientated would be a better word), that they are determined to lend as much as possible to those who can least afford to borrow.

Very true. NPR had an excellent report a couple weeks or so ago about the direction in which lending has gone. Lenders prefer more risky borrowers because they can profit more from them. People who pay bills on time and pay off their debts early make no money, but they can get fees from people who are on the very uncomfortable edge.

Much like the way banks creatively rearrange overdrafts and late fees to maximize the amount they can get from the financial misfortunes of others...