Post: #26

This really depends on your integrity. The banks credit allowed you to buy things you otherwise couldn't afford or wouldn't buy on your budget. Paying them back is a matter of honor, are you a man who stands up for what he believes in on issues large and small or do you pick and choose what things you want to be honorable about?

If your next door neighbor was the bank you would think long and hard before blowing the money and deciding not to pay it back. But if the bank is a faceless corporation demonized by the media and pop culture for daring to make a profit it's a lot easier to say fuck it, I ain't paying.

The bank isn't really going to lose money if you quit paying, here's an example of how it works: you run up a $1000 bill on the credit card and stop paying. For the next 180 days the bank charges you 29% penalty interest on the balance plus late fees and whatever else they've written into the fine print of the contract. At the end of 180 days your balance is $3000 or more. The bank sells your account to a debt buyer for 50% of the balance and makes a $500 profit. In return, you'll spend the next 20 years or more running from one collection agency after another and they will harass you, your family and your employers, plus for the first seven years you have a black mark on your credit report.

Banks don't need to sue you unless you're into them for a ton of money, $25,000 or more. Even if they do take you to court which is highly doubtful and win a judgement and put liens on your property or assets the only thing they can legally do to actually force you to pay them is garnish your wages if you have a job on the books. They aren't going to invest all that time and money for a measly 7% of your wages.

The reality is you can run up all the bills you want if someone is dumb enough to give you credit and never pay anything back. They will still make money on you.

Post: #27

@seadog

Yeah agree with all those points. What I am referring to is high end biz clients. If you take a client to say the French open in Paris. I think the billionaire would be a fool not to drop some cash to nail down a relationship with the client. This happens all the time, getting fucked up with a client to build a bond.

And yes, picking up $100 off the street is straight up the stupidest example.

All said, I still can't fathom telling a billionaire anything I would feel like a $10 Tijuana prostitute after giving him any "advice" on how to live.

Post: #28

Actually they sell your debt to collection agencies for pennies on the dollar. Part of the business is expecting loss. But that is how they justify there high interest rates. So regular people do get screwed who pay. If you are going to default best thing to do is transfer to an offer of no interest. Than during that period before you incur interest call and tell them you can't pay. Maybe they will work it out. If not they will sell debt to a collection agency. Often collection agencies will make a deal to accept half. It is a way to pay less than what you borrowed.

Post: #29

i've got the virgin atlantic black card.

for ever £1 i spend on amex i get 4 air miles, and on visa 2 miles.

I run the bill up to about £1k every month then clear it. the rewards are basically free money and i get a sick credit score.

Post: #30

I wish there was a good rewards card for Germany. The German banking system is very archaic and geared towards saving.

Post: #31

I don't have any inheritance coming but I do have a couple maxed out credit cards that I am in the position to either pay off or pay down significantly.

Got 1000 dollars to spend on paying down my credit cards.

first card has a 1000 limit, its maxed out and charges interest.
second card has a 1.5k limit also maxed out and charges interest.

I could pay off card #1 right now or split it up and half the balance on #1 and lower the balance on #2 by a third.


Any advice from the RVF gurus would be appreciated

Post: #32

(06-20-2013 08:47 PM)Screwston Wrote:  Someone told me he's not paying his credit cards because he doesn't ever plan on buying a brand new car or house.

Dont ever take advice from that "someone"

Post: #33

(06-21-2013 10:56 AM)augen sehen Wrote:  I wish there was a good rewards card for Germany. The German banking system is very archaic and geared towards saving.

That's because the Germans are not retarded

Post: #34

(02-03-2018 05:10 PM)LionHound Wrote:  I don't have any inheritance coming but I do have a couple maxed out credit cards that I am in the position to either pay off or pay down significantly.

Got 1000 dollars to spend on paying down my credit cards.

first card has a 1000 limit, its maxed out and charges interest.
second card has a 1.5k limit also maxed out and charges interest.

I could pay off card #1 right now or split it up and half the balance on #1 and lower the balance on #2 by a third.


Any advice from the RVF gurus would be appreciated

There is no advantage to carrying a balance on a credit card, unless the money you're saving is accruing more than the 19.5-24% interests the card is charging and if you have an investment like that, we'd all like to hear it.

I have travel reward cards. Use them for EVERYTHING, but I don't carry a balance. I still get the rewards, I just pay none of the interest.

There is "good' debt and there is "bad" debt. Sounds like you're balls deep in "bad" debt, which probably means you don't have any "good" debt, i.e. a home loan in which the interest is tax deductible and usually at a very, very low interest rate (4%). That 4% interest deduction could save you more on your taxes, assuming you pay taxes.

My advice, pay off the one card that you have right now and never carry a balance on it again, then start chipping away at the other, then do the same.

Conversely, I have enough to pay off my home. It doesn't make financial sense to do so. The interest is 3.85% on the loan and I am making twice that in my other investments. Makes no sense to rob those investments to pay off the home loan at such a ridiculously low rate. It's like the leant me money for (almost) free (3.85%). If you are ever offered an interest free loan--take it (assuming you can afford it). T-mobile does this with their products. You can't buy a new iPhone from them if you have an existing account. But, they will sell you one on an interest-free loan, so you renew your service contract. Makes no sense to take out $800 to buy the phone, even though I have it, if they're going to give me the money for free, right?

That's just the simple gist of it. It gets way more complicated the more money and credit you have. Imagine when that credit card you have has a $57,000 limit on it. If you max that out, your monthly interest payment is friggin' substantial. You don't want to live your life that way.

Post: #35

Painter you actually don't know what you are talking about. In the U.S.A. the average defaulted debt sells for something like 4% of face value. In Australia its something like 10 - 20%.

That means in the U.S.A. if for example you default on a credit card debt of $10,000 and its more than 6 months overdue and with accrued interest and penalties the debt climbs to for example $13,000 the bank will sell it for example for $520 (4%) to a debt collection company. So yes the bank does lose money. But yes, you would get hounded by debt collectors for a long time. Although for example if you hold out for a while and play hard ball you could end up settling for 40% of the face value of the debt with the debt collection company. For example let's say the $13,000 debt then becomes $15,000 by the time you have held off paying the debt collectors for a while you might be able to settle the $15,000 at say 40% which would be a payment of $6000 (therefore the profit the debt collection company makes on your account which they bought for $520 more than covers the many losses on all the dud debts they bought and couldn't get anything from). So you settled your debt which was originally $10,000 for $6000 and are $4000 better off, although you have destroyed your credit rating in the process for a measly $4000.

That is why credit card interest rates are so high. its to cover for the many deadbeats who default on their credit cards.

In Australia our credit card rewards are not that great. Unless you are a big baller spender or are using your credit card for business purposes the points/cash back you get will be worth very little, so better to just stick with a debit mastercard/visa card which has the same protections/returns policy/functionality of a credit card except for you cannot borrow on it. Also from what I've been told by mortgage brokers in the Australian system for someone with an already good credit rating/history owning a credit card will only reduce your borrowing capacity. In Australia for a guy like me who is an employee and a modest spender using a credit card would only get me a few hundred dollars worth of rewards points/cash back a year but it would reduced my borrowing capacity for mortgages, margin loans, etc plus it would be one more account/headache to manage therefore I do not own a credit card and just stick to using a debit-MasterCard for online purchases, etc

Post: #36

What if i get a few credit cards in the U.S , pay the interest on all of them for a year then move to another country and live there. Since i don't plan on moving back to the U.S unless to visit, is there a point in paying off my credit card?

Post: #37

(02-04-2018 10:05 AM)fitness2569 Wrote:  What if i get a few credit cards in the U.S , pay the interest on all of them for a year then move to another country and live there. Since i don't plan on moving back to the U.S unless to visit, is there a point in paying off my credit card?

Is there a point not to take a package left on someones doorstep? Is there a point not to help yourself to things in an unlocked car? Is there a point not to agree to do a bunch of work for someone with an upfront deposit, then fucking off to Asia?

Just because you can get away with something that benefit's you, doesn't mean it's good for you or society. No offense, but someone who thinks like that isn't someone I'd want for a neighbour. You go to places like Asia or Mexico and see this sort of short sighted, me first, less-than-zero-sum thinking and it annoys the hell out of me how people can sabotage their own long term, society's long/short term, and other people's long/short term interests, for their own personal short term gains. Destroy $1000 worth of other people's value if it puts me ahead $1. The problem is when everyone thinks like that you get a shithole for a society. People destroying a country's internet backbone because they wanted to steal $40 in copper.

Call it karma, or what goes around comes around, but life has a funny way of letting you reap what you sow.

Post: #38

(02-04-2018 10:17 PM)Seadog Wrote:  

(02-04-2018 10:05 AM)fitness2569 Wrote:  What if i get a few credit cards in the U.S , pay the interest on all of them for a year then move to another country and live there. Since i don't plan on moving back to the U.S unless to visit, is there a point in paying off my credit card?

Is there a point not to take a package left on someones doorstep? Is there a point not to help yourself to things in an unlocked car? Is there a point not to agree to do a bunch of work for someone with an upfront deposit, then fucking off to Asia?

Just because you can get away with something that benefit's you, doesn't mean it's good for you or society. No offense, but someone who thinks like that isn't someone I'd want for a neighbour. You go to places like Asia or Mexico and see this sort of short sighted, me first, less-than-zero-sum thinking and it annoys the hell out of me how people can sabotage their own long term, society's long/short term, and other people's long/short term interests, for their own personal short term gains. Destroy $1000 worth of other people's value if it puts me ahead $1. The problem is when everyone thinks like that you get a shithole for a society. People destroying a country's internet backbone because they wanted to steal $40 in copper.

Call it karma, or what goes around comes around, but life has a funny way of letting you reap what you sow.

Seadog, I totally understand the sentiment of what you are saying, and in some ways OP did give off that impression.

However, I partially disagree with you.

If the credit you have is from your local bank, or people who you know who gave that money to you in good faith and trust that you would pay it back, then yes, you are nothing but a scumbag for abusing the system or a loophole to pay it back. You are hurting other peoples lives.

However, this is hardly ever the case. Any credit card is issued by one of the big creditors. They would not hesitate to make your life an absolute living hell and keep you in debt for the rest of your life if they could. No matter what hardship you endured due to know fault of your own, they will show you no grace or mercy. In some cases, they deliberately push credit on people who should not recieve it, tacitly putting people in never ending debt and outright destroying their lives.

This is often the case with mortgages. There was an expose on one of Warren Buffets companies who bought out all the trailer park financing companies, and jacked up the interest rates. With no competition, poor middle Americans are not forced to go with these usurous rates, because they literally have no choice. The law is on the side of the big companies, and they have optimized their practice to suck out every bit of cash they can and keep you dependent on them.

If you can somehow erase your debt, or stop making payments and get away with it legally, do it. Just like tax deductions, you have no moral obligation to someone who willingly chose to make a risky bet on you by extending credit to you in the first place. Why should you keep paying money on an underwater mortgage if just walking away is the better option? Did any of the big banks "do the right thing" in 2008? Naw, they paid out the same fat bonuses and somehow got tax payers to cover the bill.

The analogy of abusing social trust and screwing over large financial institutions is not apt.

That said, make sure you know the difference and don't abuse social trust.

Even local pawn shops (LOCAL pawn shops), are actually very good places and absolutely worthy of respect.

Post: #39

(02-03-2018 05:10 PM)LionHound Wrote:  I don't have any inheritance coming but I do have a couple maxed out credit cards that I am in the position to either pay off or pay down significantly.

Got 1000 dollars to spend on paying down my credit cards.

first card has a 1000 limit, its maxed out and charges interest.
second card has a 1.5k limit also maxed out and charges interest.

I could pay off card #1 right now or split it up and half the balance on #1 and lower the balance on #2 by a third.


Any advice from the RVF gurus would be appreciated

Need to run the numbers on the cards and find out where that $1000 will save you the most money.

For example:

The card with the $1000 may be tempting to pay it off in one whack, but if it has say a 15% interest rate, while the $1500 card has a 24% interest rate, then the $1500 card is costing you a lot more money every month and it would be in your best interest to throw that $1000 at card #2 instead. If the $1000 debt is hitting you with a $15 finance charge every month, but the $1500 debt is hitting you with a $30 finance charge every month, then you are paying a total of $45 in interest every month. If you pay off the $1000 debt then you are still paying $30/month to the $1500 card, but if you put that $1k towards the $1500 card instead then you will only be paying $25/month in total interest charges.

See what I mean?