Credit Card Debt crisis

I wonder if the next crisis is going to be when people are unable to pay their credit card bills. With universal default your rate can jump quickly even if you are not late on your payments. I wonder what effect that will have on the economy.

I am paying mine off as fast as I can.

 

I'm thinking HELOCs.

 

As always I recommend eliminating debt, especially credit card. This might be a good time to invest in some fixed income investments also.

 

VA, as long as rates are kept low, I think HELOCs will hold off (well, until they get foreclosed anyways). If rates start to climb again, HELOC payments will climb as well since most of them are tied to Prime.

Thelt, the scary thing about Credit Card debt is that it isn't tied to anything. At least with a HELOC/Mortgage, there is some hope the bank will get something back. With a Credit Card, they get nothing. From rough numbers I remember, there is roughly the same amount of debt on Credit Cards as there are Subprime Mortgages but of course, the mortgages have an asset backing them (somewhat).

 

Agree with eliminating credit card debt (along with every other debt) but disagree on the fixed income. If someone doesn't need the money in the next 5 years, why in the world would you not be buying right now? One of the best buyers market since the Great Depression. Now, if someone needs the money in the next 5 years, I would agree (depending on the investment of course).

 

I agree if you have a long time horizon. I'll never be as aggressive as I was before this though.

 

I haven't changed my positions at all and am picking up shares very cheaply but then, I don't need the money for 35 years. Only thing I wish is I had more money sitting around to put in right now. We are still working on building up our emergency fund (which is a good thing to have in today's world as well) so I am focused on that right now.

 

The effect is already hitting the retail industry. Sell numbers are down. Just hope they do not try any type of bailout deal. Credit card companies IMO need to be held more to the fire. If you give credit to anyone without any backing. That is high risk and if they fail. I joe tax payer should not pay for your bad risk taking. Agree pay it off and cut it up.

 

One of the things I'm most proud of is paying off my credit cards and cutting them up. I have 1 cc that I decreased to a 500 dollar limit and it hasn't been used in years.

If I want something, I save for it, or do without. I do without a lot.

If the government starts paying off cc debt for everyone, I'm applying for every single one I get in the mail for 2 weeks and running them all up.

 

Credit cards are a bad thing for a lot of people and I certainly got in deeper than I wanted to but at the same time I ran them up over the course of three years while my wife cut back to working part time. She did this to spend more time with our children while they were babies. My oldest is three my youngest is one and a half. Granted I am having to make some sacrifices now to pay it back and it cost me a lot of interest but it was not an entirely bad thing either. She is working full time again and together we make a pretty good income for our area. We should have it all paid off in about 2 years, including all credit cards and both of our cars. If I had it to do over again I would be a little smarter about it but I do not regret taking on some extra debt in return for her staying with the babies most of the time.