BF2S Forums The tumbling Dollar $$$!

Turquoise wrote:

Americans just need to learn how to save and stop borrowing so much.

Good point.  And for their own good at the very least.  Average credit card debt in this country is staggering. 
The following is an extreme example but I almost fell off my chair:
Last week I entered a boat loan application for a customer who had just completed a 2nd mortgage to consolidate her credit card debt.  AFTER the consolidation she was still paying $1,800 in MINIMUM payments on the remainder of her credit card debt.  I advised against trying for the boat loan, but legally if the customer wants to continue, I cannot deny the submission of the application.  I submitted it and it was denied.  She and her husband pull in 10K/mo. but their DTI (debt to income) is 60%.  Recommended max is 40% . . . I told her the application was denied because of high DTI.  Her response? "Ok, I'll get it done some other way." *beats head against wall*  They don't listen, they just gotta have it.

I think it's almost accurate to say that most prices on everything here on Iceland are US prices doubled.

The_Shipbuilder wrote:

Bertster7 wrote:

Stingray24 wrote:

Good point.  And for their own good at the very least.  Average credit card debt in this country is staggering.

They don't listen, they just gotta have it.

That is exactly the problem.

If something isn't done about the level of borrowing and the value of the dollar many Americans are going to have to learn to wait until they can afford something before buying it or be in serious financial trouble.

Our addiction to credit has been a well-known issue for a long time. I don't understand why absolutely nothing has been done about this on a national level. It goes beyond affecting individual families, this has major macroeconomic ramifications, yet I've never heard an elected official say jack about it. The credit card companies and their lobbyists must be REALLY far up the lawmakers' asses.

If I were in Congress, I'd draw up a bill to

1) make it illegal to market credit cards in outdoor booths (ie on college campuses, in front of grocery stores)
2) require high schools to teach seniors a week-long multi-disciplinarian program designed to educate kids on personal finance, with a strong emphasis on encouraging kids to use credit cards sparingly and as a last resort

2 very good points you bring up, but id ban credit cards all together. theyre not needed atall, if you havnt got it, dont spend it. its very simple.

The_Shipbuilder wrote:

Bertster7 wrote:

Stingray24 wrote:

Good point.  And for their own good at the very least.  Average credit card debt in this country is staggering.

They don't listen, they just gotta have it.

That is exactly the problem.

If something isn't done about the level of borrowing and the value of the dollar many Americans are going to have to learn to wait until they can afford something before buying it or be in serious financial trouble.

Our addiction to credit has been a well-known issue for a long time. I don't understand why absolutely nothing has been done about this on a national level. It goes beyond affecting individual families, this has major macroeconomic ramifications, yet I've never heard an elected official say jack about it. The credit card companies and their lobbyists must be REALLY far up the lawmakers' asses.

If I were in Congress, I'd draw up a bill to

1) make it illegal to market credit cards in outdoor booths (ie on college campuses, in front of grocery stores)
2) require high schools to teach seniors a week-long multi-disciplinarian program designed to educate kids on personal finance, with a strong emphasis on encouraging kids to use credit cards sparingly and as a last resort

In one of the other threads yesterday I made the recommendation that basic money management be a full course in high school, and is mandatory, with higher level AP classes covering investment and retirement planning.

The_Shipbuilder wrote:

Bertster7 wrote:

Stingray24 wrote:

Good point.  And for their own good at the very least.  Average credit card debt in this country is staggering.

They don't listen, they just gotta have it.

That is exactly the problem.

If something isn't done about the level of borrowing and the value of the dollar many Americans are going to have to learn to wait until they can afford something before buying it or be in serious financial trouble.

Our addiction to credit has been a well-known issue for a long time. I don't understand why absolutely nothing has been done about this on a national level. It goes beyond affecting individual families, this has major macroeconomic ramifications, yet I've never heard an elected official say jack about it. The credit card companies and their lobbyists must be REALLY far up the lawmakers' asses.

If I were in Congress, I'd draw up a bill to

1) make it illegal to market credit cards in outdoor booths (ie on college campuses, in front of grocery stores)
2) require high schools to teach seniors a week-long multi-disciplinarian program designed to educate kids on personal finance, with a strong emphasis on encouraging kids to use credit cards sparingly and as a last resort

Out of curiosity, whats wrong with credit cards?

Bertster7 wrote:

jonsimon wrote:

The_Shipbuilder wrote:

Our addiction to credit has been a well-known issue for a long time. I don't understand why absolutely nothing has been done about this on a national level. It goes beyond affecting individual families, this has major macroeconomic ramifications, yet I've never heard an elected official say jack about it. The credit card companies and their lobbyists must be REALLY far up the lawmakers' asses.

If I were in Congress, I'd draw up a bill to

1) make it illegal to market credit cards in outdoor booths (ie on college campuses, in front of grocery stores)
2) require high schools to teach seniors a week-long multi-disciplinarian program designed to educate kids on personal finance, with a strong emphasis on encouraging kids to use credit cards sparingly and as a last resort

Out of curiosity, whats wrong with credit cards?

Debt. It's spiraling out of control in the US.

National debt, personal debt it all adds up. If nothing is done about it it'll all come tumbling down and leave a horrible mess.

You might think spending lots on credit cards is boosting the economy, actually it's not. It's creating an artificial boost that still needs to be paid for. The only people benefiting are the banks and credit card companies and their share holders.

I agree debt is a bad thing, but I don't see a huge correlation between short term credit card loans and a loan you'd take from a bank. Credit cards obviously reduce the oppertunity cost of persuing a loan, but I don't see this correlating with holding people in constant debt, per say.

Last edited by jonsimon (2006-12-06 12:33:22)

Vilham wrote:

...thanks to low taxes...

My taxed ass they are.

Last edited by unnamednewbie13 (2006-12-06 13:27:20)

Vilham wrote:

unnamednewbie13 wrote:

Vilham wrote:

...thanks to low taxes...

My taxed ass they are.

Sorry but as an American you don't even understand what high taxes are, your one of the lowest taxed MEDC's in the world.

I agree.  Let's take a quick comparison...

U.K. VAT (sales tax): 17.5%

Washington State Sales Tax: 6.5% (plus the occasional 1-2% depending on the city you're in)

U.K. Income Tax: above £2,150 (about $4,226) = 22%

Washington income tax: NONE

Federal income tax: (single filing) 10% up to $7,550, doesn't reach 25% until $30,651 (about £15,509)

NO comparison whatsoever.  I like the U.K.'s culture, but for tax reasons, I'm SO glad I live in America.

Turquoise wrote:

Vilham wrote:

unnamednewbie13 wrote:

My taxed ass they are.

Sorry but as an American you don't even understand what high taxes are, your one of the lowest taxed MEDC's in the world.

I agree.  Let's take a quick comparison...

U.K. VAT (sales tax): 17.5%

Washington State Sales Tax: 6.5% (plus the occasional 1-2% depending on the city you're in)

U.K. Income Tax: above £2,150 (about $4,226) = 22%

Washington income tax: NONE

Federal income tax: (single filing) 10% up to $7,550, doesn't reach 25% until $30,651 (about £15,509)

NO comparison whatsoever.  I like the U.K.'s culture, but for tax reasons, I'm SO glad I live in America.

I thought you got £4000 before having to pay income tax. I could be wrong though. Then there's council tax to pay for the house you live in and road tax to drive etc.

Bertster7 wrote:

Turquoise wrote:

Vilham wrote:

Sorry but as an American you don't even understand what high taxes are, your one of the lowest taxed MEDC's in the world.

I agree.  Let's take a quick comparison...

U.K. VAT (sales tax): 17.5%

Washington State Sales Tax: 6.5% (plus the occasional 1-2% depending on the city you're in)

U.K. Income Tax: above £2,150 (about $4,226) = 22%

Washington income tax: NONE

Federal income tax: (single filing) 10% up to $7,550, doesn't reach 25% until $30,651 (about £15,509)

NO comparison whatsoever.  I like the U.K.'s culture, but for tax reasons, I'm SO glad I live in America.

I thought you got £4000 before having to pay income tax. I could be wrong though. Then there's council tax to pay for the house you live in and road tax to drive etc.

I'm not sure...  you might be right.  I'm just going by what I found on the net.  I know that, in America, income taxation starts at the very beginning of income.  We do have personal deductions though.  I'm not sure how your deductions work in the U.K.

jonsimon wrote:

Bertster7 wrote:

jonsimon wrote:

Out of curiosity, whats wrong with credit cards?

Debt. It's spiraling out of control in the US.

National debt, personal debt it all adds up. If nothing is done about it it'll all come tumbling down and leave a horrible mess.

You might think spending lots on credit cards is boosting the economy, actually it's not. It's creating an artificial boost that still needs to be paid for. The only people benefiting are the banks and credit card companies and their share holders.

I agree debt is a bad thing, but I don't see a huge correlation between short term credit card loans and a loan you'd take from a bank. Credit cards obviously reduce the oppertunity cost of persuing a loan, but I don't see this correlating with holding people in constant debt, per say.

Then you have obviously never held the kind of CC debt we are talking about.  Most people get sucked into CC offers that seem too good to be true (and usually are) so they spend like there is no tomorrow.  The problem is that the when they pay the minimum amount required on their CC debt, they can end up spending way to long paying it off. 

Don't quote me on this, but I believe the statistics are that some one owing $20K in debt, and making only the minimum monthly payments, would take 20 years to repay that debt.  This obviously assumes that no additional spending occurred and that interest rates didn't increase.

did anyone see the special, i think it was nightline or one of those show's on warren buffet?

in a scene he said it all in plain english to the reporter.

uno numero rule to becoming debt free and either rich or comfortable


DONT USE CREDIT CARDS PERIOD

i trust those words coming from a honest billionaire

jonsimon wrote:

Agent_Dung_Bomb wrote:

jonsimon wrote:

I agree debt is a bad thing, but I don't see a huge correlation between short term credit card loans and a loan you'd take from a bank. Credit cards obviously reduce the oppertunity cost of persuing a loan, but I don't see this correlating with holding people in constant debt, per say.

Then you have obviously never held the kind of CC debt we are talking about.  Most people get sucked into CC offers that seem too good to be true (and usually are) so they spend like there is no tomorrow.  The problem is that the when they pay the minimum amount required on their CC debt, they can end up spending way to long paying it off. 

Don't quote me on this, but I believe the statistics are that some one owing $20K in debt, and making only the minimum monthly payments, would take 20 years to repay that debt.  This obviously assumes that no additional spending occurred and that interest rates didn't increase.

You're right, I've never made a bank loan in my life, but as you are explaining it, there apparantly is no inherent quality of a credit card that brings about long-term standing debt. The scenerio you are presenting finds its roots in misleading advertising and irresponsible debtor choices.

I agree completely on the issue of debt, I'm just playing devil's advocate to develop my understanding of credit cards and their role.

Credit cards aren't inherently evil, it just comes down to irresponsible behavior when using them.  Because credit cards are revolving debt, they are unlike a loan where a specific amount of money is borrowed, usually with set interest rates and payments (but not always), and a pre-determined payoff date.  With credit cards you buy things until you're at your limit, and once you pay that down and have available credit, you can go right back to spending.

One of the best commercials I saw about using credit cards wisely showed this kid in college and he gets a credit card.  It shows him partying and living it up.  He buys this, what would have been at the the time, modern record player with 8-track.  Then it shows him many years later, several pounds heavier and balding, and sitting on the table behind him is the same record player with 8-track.  Basically a show that unfettered spending on credit cards can haunt you for many, many years.