Can someone please explain credit card debt

[b3nx]

I don't understand how people can rack up credit cards, I lay awake at night worrying about my general bills! I just don't see how people have like 3-5 credit cards wth like 3-5 thousand on them.. I have debt yes such as my car loan but I will never use a credit card, why do people get themselves into such a headache?

[nmboone]

I don't have credit card debt and never have, fortunately. And I'm not sure if you are genuinely asking or if you are just being hypothetical but I'll go along with you here since it might be fun.
Sometimes people rack it up in college when they believe there is a giant pot of gold at the end when they graduate and will be able to pay it all off then and then not so much.
Sometimes emergencies happen like medical debt or a giant car repair bill that they didn't have the cash savings for.
Sometimes people want things they can't afford and must pay lower amounts on things like tv's and computers, so they put it on the credit card.
Sometimes they need a down payment such as on a car and pull the cash out of their credit cards. (I know someone who did this!!! OMG!)
Sometimes they just buy small things here and there and don't pay off the whole balance every month and it balloons into a giant black hole of debt.
There are more reasons than this, probably a lot more. And I imagine it is hard to sleep when your cc balance is out of control. But with more education about money, I believe more people will understand the dangers. Thanks that was fun, lol!

[GREENBACK]

Probably the simple answer(I'm sure you'll get plenty of responses here) is not knowing what you spend or how much you have to spend and then thinking you make enough money to cover it. Carry this scenario out over months/years and before you know it you're buried. This is why cc's aren't good for a lot of people that use them.

[boosami]

Many people think "as long as I can afford the minimum payment, I'll be fine" and so they'll charge without worrying about the debt until they can't afford the minimums anymore. Then they realize they have thousands of dollars in debt. Finally, they end up using the available credit to make ends meet until they are maxed out.

Then they declare bankrupcy and start the whole thing over again!

[maat55]

I see them as a tool that you should use with care. They obviously, can be misused, but can be convienent while earning rewards.

I do not use my card for all purchases. I only pay expenses for my business and others like gas, groceries, cable and utilities. I do not use it for eating out or clothing or other consumer purchases.

I do not recommend anyone use them until you have a handle on your personal finances, and have plenty of reserve funds to cover the monthly charges.

There is nothing wrong with not using them or using them, just treat them with much respect. First time you cannot pay in full, drop them.

[boosami]

Originally Posted by maat55

There is nothing wrong with not using them or using them, just treat them with much respect. First time you cannot pay in full, drop them.

Agreed! People slide back into credit card debt after getting out of it by ignoring this advice. It's too tempting for some people to let a statement go partially paid "just this time" and before they know it they've got a balance they can't possible pay off any time soon. I say as soon as you carry a balance, STOP CHARGING until there's no balance.

[disneysteve]

Originally Posted by b3nx

I don't understand how people can rack up credit cards

I agree. I've posted the same thought many times. I'm not talking about folks who get into CC trouble due to medical bills or unemployment or death of a spouse or some other catastrophic issue - I understand that. I'm talking about plain old everyday spending more than you make kind of debt. I can not comprehend how anyone can walk into a store and whip out a CC to buy an item knowing full well that they do not have the money in their account to pay for that item when the bill comes. It just boggles my mind that so many people do that on a daily basis. If I can't afford something, I don't buy it. Period. Very simple. How anyone can function by a different method amazes me.

[Tree0164]

We had over 20k in debt but alot of that was due to an adoption cost and plane tickets to there. We did paid it off and I haven't charged without paying off in the next month.

I see many people on different message boards that have the attitude well I have 8k in debt but life is too short so I will still take a trip to disney, a cruise or we will continue to go out to eat each night or my husband needs to be an atv because he works 50 hours a week. Live below your means and save cash-you will sleep much better at night.

[maat55]

Originally Posted by Tree0164

We had over 20k in debt but alot of that was due to an adoption cost and plane tickets to there. We did paid it off and I haven't charged without paying off in the next month.

I see many people on different message boards that have the attitude well I have 8k in debt but life is too short so I will still take a trip to disney, a cruise or we will continue to go out to eat each night or my husband needs to be an atv because he works 50 hours a week. Live below your means and save cash-you will sleep much better at night.

Many think that to live below their means is to not enjoy life. There is a peace that comes with it that will lesson the desire for mindless consumption.

[disneysteve]

Originally Posted by Tree0164

I see many people on different message boards that have the attitude well I have 8k in debt but life is too short so I will still take a trip to disney

A fellow DISboader, I see. That's a fine thread, isn't it?

[minnie1928]

Originally Posted by disneysteve

A fellow DISboader, I see. That's a fine thread, isn't it?

It sure is a doozy! But aren't they all when they start out complaining about their finances and how poor they are, but heaven forbid someone suggest that they cancel their Disney vacation! Then it really starts to hit the fan!! It's the same thing, over and over and over....

[disneysteve]

Originally Posted by Tree0164

I see many people on different message boards that have the attitude well I have 8k in debt but life is too short so I will still take a trip to disney

Originally Posted by disneysteve

A fellow DISboader, I see. That's a fine thread, isn't it?

Originally Posted by minnie1928

It sure is a doozy! But aren't they all when they start out complaining about their finances and how poor they are, but heaven forbid someone suggest that they cancel their Disney vacation! Then it really starts to hit the fan!! It's the same thing, over and over and over....

For those of you who aren't on disboards.com and don't know what we're referring to, there is a thread over there by someone who has 8K in CC debt and is panicking because the CC company notified her that her minimum payment would be going up from 2% ($160) to 5% ($400) each month. She doesn't know what to do or how she will afford the extra $240/month and said she may need to consider bankruptcy. Her signature shows a Walt Disney World vacation is planned for 2010 and that she also took one in 2008. She went on to say that her husband has a whole slew of boy toys including an ATV that he just bought a couple of days ago for $800.

More than one person suggested that she can the plans for a costly vacation until the debt situation is cleared up. Others jumped in and said "life is short" or "you only live once" or accused folks of being "holier than thou" by making such a suggestion. Unfortunately, it is a recurring theme at that site. That's a big reason why I left there quite a while ago. People came and posted their situation and asked for advice, but what most of them really wanted was someone to say, "Don't worry about it. Spend the money and figure it out later." At this site, however, folks seem to be much more realistic and give real advice rather than fake hand-holding and undeserved support.

[watsoninc]

Originally Posted by b3nx

I don't understand how people can rack up credit cards

I think credit card debt is just so ingrained into our culture, and credit cards are one of the most aggressively marketed products period. That definitely doesn't remove our personal responsibility to avoid getting in over our heads. Nonetheless, being financially responsible never seems very fun until you actually start really tasting the fruits of your labor. Sometimes this takes years, which is why people just choose to finance the lifestyles they feel entitled to now instead of waiting until they can afford them later.

[Tree0164]

Many think that to live below their means is to not enjoy life. There is a peace that comes with it that will lesson the desire for mindless consumption.


Right they think that you have to be miserable if you do not go out to dinner 3-4 times a week plus have the annual beach trip in the Caribbean


fellow DISboader, I see. That's a fine thread, isn't it?

yes I had a trip planned in my head for next year but until my husband comission sorts itself out we will be staying closer than spending $$$ in Orlando. I don't have credit card debt but I really can't justify spending $5k or more for 7 days. We pay all cash.

[EEinNJ]

Sometimes it's because of emotional problems. "Retail Therapy", spending to feel better.