$50 billion credit card debt

Discussion in 'Markets & Economies' started by fishball, Jan 12, 2012.

  1. fishball

    fishball New Member Silver Stacker

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    http://www.smh.com.au/business/credit-card-debt-swells-to-record-50-billion-20120112-1pwqe.html

    That's pretty huge, average of $3333 debt per card.

    And since some people (like me) have multiple credit cards, there are probably some Australians with well over $10000 debt.

    Ick.
     
  2. hawkeye

    hawkeye New Member Silver Stacker

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    I confess to being someone who is incapable of using Credit Cards responsibly and I tend to think I am generally more responsible than the average person in most areas. So, it doesn't surprise me at all. That's the consequences of govt mandated easy credit.
     
  3. Prior

    Prior Member Silver Stacker

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    People sign them selves up to these thing's... The bank's are not at fault, is we the sheeple.

    Personally I will never use one but you can use them to your advantage if your disciplined with your spending.
     
  4. Nukz

    Nukz New Member

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    It's very very common these days when i speak to clients that they are using credit cards to pay their mortgage and utility bills and cashing in annual leave.

    There was a very similar statistic out of Britain about credit cards recently. It said that 2 million British are using credit cards to pay mortgages or rent which was a increase of 50% in a year.
     
  5. goldpelican

    goldpelican Administrator Staff Member

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    I knew someone with $250,000 in credit card debt. They were literally a credit addict.

    Passed away at a young age - the cards in that persons name were wiped, but their spouse inherited much of the debt as it was joint cards :( Wasteful wasteful stuff like multiple OS holidays a year with no assets to show for the money. The remaining debt is still a destructive burden. Unbelievable that so much credit was provided by numerous issuers with no checks or balances other than "state your income and current obligations" type forms. Abused so easily :(
     
  6. Eureka Moments

    Eureka Moments Well-Known Member Silver Stacker

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    Live fast, die young, leave the tab for someone else to pick up.
     
  7. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Expect to read in the national papers in the next month or two of a spike in retail spending. I suspect it is the result of consumers who, having put off absolutely non-essential purchases for as long as possible, have been forced to spend in order to replace items that have long worn out like clothing or cars. Me in both categories.

    At least I look schmick now and don't spend hours on the side of the road getting grease and oil under my nails. Not on credit though thank fully.

    Actually the car is financed
     
  8. shano73

    shano73 Member

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    I dont have a credit card at all, guess im one of the lucky ones.

    I was always brought up to save for what I wanted, if I didnt have the $$$ I go without, pity that doesnt exist with the other 95% of the country :(

    But I guess too many ppl out there want their big 55' LED TV, Blu Ray players, $2500 Coffee machines, tanning salons, pedicures, $100+ haircuts/extensions.........want, want ,want........now, now, now

    Honestly parents have alot to answer for in not teaching kids the value of the almighty dollar, I mean shit, kids having mobile phones, latest label clothing, expensive watches, $200+ sneakers..........what a load of BS.

    Gen Y is definately a ................."Y" cant I have it now generation ................buy now think later, If I dont have the cash I'll put it on the drip on the plastic fantastic & worry about it later and pay the bare minimum.
     
  9. jackbrown

    jackbrown New Member

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    Credit cards are redundant now that debit cards available. If anyone still has personal credit cards it just means they cannot manage their money and should go back to school and study general accounting.
     
  10. null

    null Member

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    If you're crap at managing your own dosh, having just debit cards won't suddenly change the fact. Conversely, having credit card(s) does not make one a bad money manager. They are just tools for you to use. You can still overdraw on a debit card can't you (I don't know as I have never overdrawn on mine and not about to find out)? If so, then definitely will be fees attached. So how would that make you any better?

    Bottom line is, if you cannot control your spending, no card will be able to solve that. Credit cards just digs you a bigger hole.
     
  11. PerthStack

    PerthStack Member

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    If I'm still single and get a terminal disease with no chance of recovery, my plan is to go on a massive bender funded by credit cards and then croak leaving a bank holding the bag. Those leaches send me preapproved crap every month or two so I'll have easy access to tens of thousands of dollars worth of goodbye cash.
     
  12. fishball

    fishball New Member Silver Stacker

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    General accounting has pretty much nothing to do with personal financial management or fiscal responsibility and personal credit cards are awesome provided you make them work for you.

    Debit cards suck anyway, no interest free period & no rewards and if you get your card skimmed then you are out of the pocket until the bank refunds you whereas credit cards you aren't.

    Oh and Woolworths doesn't allow Credit to be pressed on Debit Cards, so if you're holding a debit card with no SAV/CHQ (like Commsec MC debit) you're boned :p.

    Still though, I agree it's better to be not using credit cards than to use one and get into never-ending debt.

    Depends on the person and their mentality really.
     
  13. Diablo21

    Diablo21 Member

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    I have 2 credit cards and I use them like I would use cash, I've been using them for the last 10 years and have never paid a cent in interest. The only reason I use them because I get cashback and when I time it right, I don't have to pay for 60 days some time.

    Now for my American family members, well that's a different story :)
     
  14. jackbrown

    jackbrown New Member

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    You put it correctly, they are tools, identical in every respect except the CC is a lot more expensive in the long term, so why have it?

    With a visa debit card you can only access as much money as in in your savings account, when that is gone your cannot make further purchases. You have hence managed your money, and managed to spent it all. The average person with a CC has no hope of managing their money because they are using debt from the outset. If you had 20 thousand in a savings account { ie you can demonstrate money management skills} why would you borrow $2000 to buy a TV set at 18% interest? You wouldn't. You would instead sit down and rationally say to yourself "Do I really want to deplete my account by $2000 just to have a bigger tv?" If you really wanted the tv you would, but if it was just a whim that month because a friend had bought one you'd probably not buy it.

    This is the root of the psychology behind CC's. Your not spending your money your spending imaginary money and that is a lot easier. The fact that the debt compounds at odorous interest rates is ignored from the outset. Everyone thinks they can manage their credit cards yet they all seem to have thousands and thousands of dollars in debt on them and nothing in their savings account?

    One of my banks recently sent me my new keycard to replace the old one but it was a visa debit card! I cut it up instantly. I have one debit card with another bank and that is all I need, probably all anyone needs unless they are an international business person. I called the bank and was told that key cards are not issued any more and it was my only option. I said it was a security risk, I had over 10 thousand in the 2 linked accounts and anyone could use the details on the card to spend it online? The young woman told me that as long as I didn't lose the card my money would be safe, to which I said "you banks told us years ago not to carry cash because it wasn't safe and now your saying it's safe to carry thousands of dollars in plastic that is as good as cash?" She backtracked immediately and assured me a new Keycard, not debit card, would be sent.

    Perhaps one day they will abolish debit cards and try to force everyone like me who is addicted to eBay to get a credit card, but I will cross that bridge when I come to it.
     
  15. JulieW

    JulieW Well-Known Member Silver Stacker

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    Visa and Mastercard both owned by Goldman Sachs ?

    Well my post above, inspired me to go looking on the interweb.

    So apart from discovering that Visa and Mastercard collude and jointly fight anti-Trust actions and jointly had to pay Wal Mart 3 billion for dirty tricks, and removed financial channels for Wikileaks, I did find out that Westpac has a voice on the Boards of Visa.

    On the size of the transactions covered globally by these two, if we end up with an electronic currency, these two jointly have the means to institute it fairly painlessly. All it needs is for everyone to either use a Visa or a Mastercard.
     
  16. Stedlar

    Stedlar Active Member

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    If you can't handle credit cards then stay away from them. But just because you can't doesn't mean others can't. I feel sorry for those who can't control their credit cards, just like I feel sorry for people who can't control their drinking or gambling. But general sweeping statements do not make for well positioned arguments.

    I use credit cards for everything. Almost every cent I spend goes onto a card. 1 day before the bill is due it is paid off. Every time, without fail. The credit card is how I manage my money. Just because I spend onto a card doesn't mean I think of the money any differently. It is every bit as cash to me as cash itself.

    Now eating. That's what I would like to get under control.
     
  17. wallynut

    wallynut New Member

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    I'm a CC user and have no issues, paid off all the time.
    Have even used new CC's to offset mortgage where balance transfer is offered.

    When you consider I spend close to 75k ever year on the CC, I am making money on the interest free period of 45 days.
     
  18. null

    null Member

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    And you can probably get a "free-ish" return ticket to somewhere nice overseas, why not?
     
  19. null

    null Member

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    But let this thread not degenerate into a debate on which card types are good/bad. Or "I am better because I use/don't use such an such "As members here pointed out, both card types can be good or bad in the hands of the card user.

    What is a sad state of affairs now a days (and I believe it will get worse) is that the majority of the population do not have any financial acumen. You don't have to be geniuses to get your budgets/monies under control (in fact, it can be a hindrance as shown by LTCM). What the population requires is simple maths knowledge, stuff you think was useless when you were in lower high school. Ask around your work area, family, and see how many grown ups know how to calculate compound interest. Well, if they don't, then a computer at the bank will help them when that CC statement comes.

    Knowledge is everything, and without it, you are behind those who have it. It's astounding so may so called uni grads (post grads), don't really know simple maths. Simple additions, mult, div, etc. These are the building blocks to finance, yet either they are not taught/taught properly, or we are choosing not to learn. That's what eventually gets many into trouble.

    I don't know when supermarkets started showing breakdowns of each item's prices, but they are so useful and practically given information for you to compare between products. But who actually reads them and make use of them to their advantage.

    A pack of biscuit 150gram @ $2.99. It now tells you that it's also $1.99 per 100g. So if on an adjacent shelf, the same biscuit pack was a bulk 1kg "discounted" @ $22.50, then are you getting a discount?

    Basic, basic maths. And if you don't know such simple stuff after leaving school, then

    Read the last paragraph of the article, does that make sense? Does a growing economy logically implies that credit card balances also need to grow along with it? Well, we all know here what happens to those economies sooner or later
     
  20. lamp

    lamp New Member

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