Credit Card PIF or not

**cooliemae** · 01-21-2009, 05:42 PM

I've only had one card that I purposefully (i.e. didn't have to, but) went into debt with and that would be my capitol one card.

My wife and I got married last october and in sept. received an offer from capitol one for 0% intro rate on purchases and balance transfers for 14 months. We had one card with 2K balance at 0% that had to be paid off by October, so we transferred that balance and ate the 3% fee, but then put most of our big stuff for the wedding on the card.

We then took the cash that we were going to spend on the wedding and locked it into cd's paying 3.75% and maturing right before the intro rate on the capitol one card expires.

So we got the points for spending on the card and the interest from the money we would have spent on wedding.

**disneysteve** · 01-21-2009, 06:29 PM

Originally posted by maat55 View Post

It made me wonder if there were many people who do not care if they carry a balance

I can't speak from personal experience, but I think this statement is right on the money. A lot of people really don't look at CC debt as a problem that needs solving.

A number of years ago, one of the news shows like 20/20 or Dateline did an episode on debt and personal finance. They spoke with a group of regular people. Several of them had more than enough in savings (earning next to nothing) to pay off their modest CC debt (that had a sky-high interest rate). When the anchor asked them why they don't just pay off the cards, they said they just felt more comfortable having the savings. They understood that the CC was costing them a bunch of money in interest but that didn't matter to them.

**snafu** · 01-21-2009, 06:53 PM

People use CCs because they are convenient and don't feel like they are spending money. The research says that consumers will by more [quantity] and more expensive items when they use CC; they buy less and seek lower cost items when using cash.

The majority of consumers just don't understand how interest adds to the cost of their purchases. How I wish they related basic economics as part of middle school school math!

**TBH** · 01-21-2009, 07:14 PM

My dad always has at least one credit card with a balance and a HELOC. He has a high income and a lot of assets, including cash, but it doesn't bother him to have debt. He sees it as leveraging his capital. If the debt gets high he works on paying it down for a while, and he usually throws big windfalls (he is in sales so he gets quarterly commissions) at the HELOC to keep it under control, but he doesn't have any problem owing a bunch of money here and there.

Me, I wouldn't be able to sleep at night.

**maat55** · 01-21-2009, 08:01 PM

Originally posted by disneysteve View Post

I can't speak from personal experience, but I think this statement is right on the money. A lot of people really don't look at CC debt as a problem that needs solving.

I've noticed that a lot of people don't get serious about fixing their debt problems until the problem is overwhelming. I would be scared if I had 100 dollars on a card I could not pay in full.

Mindsets seem to be the key to many of these problems.

**cptacek** · 01-21-2009, 08:04 PM

I have credit card debt. I know what it is costing me every month in interest and sanity. I am trying to pay it off. We got into it because one month we couldn't pay the bills because of a hail storm and it slowly grew from then on, until we got my house sold, and now I'm slowly plugging away at it. Up until last July, we didn't have any credit card debt.

I have $2000 in an account that I do not want to touch. It isn't making any money for us, but that is like my last ditch, everything goes to hell in a handbasket fund, so I'm not going to use it to pay down a credit card.

**simpleyme** · 01-22-2009, 07:19 AM

for many years we had a citibank card and we never paid it in full we would use it pay the minimum we always used it and basically owed city bank about 600 dollars for about 10 years
one day i got a letter that they were raising my rate ,it woke me up I asked my husband why do we even owe these people any money it makes no sense? so I just wrote a check and have never carried a balance again
and basically quit using ccs altogether

**Caoineag** · 01-22-2009, 08:50 AM

I have balances and one card that I pay in full. Right now almost all of my debt is at 0% ( a little bit is at 1% but that is gone next month). I have never paid a lot of interest on my debt and I have never paid just the minimum. It never occurred to me to have an EF until 2 years ago because I always had the availability of cheap credit so that contributed a lot. I used the credit cards as an EF.

I am paying them all off now and trying to build an EF but it takes time and buying a house was a definite set back. I should be credit card debt free in the next 6 months AND have an EF so that should finally break that cycle but I also started this process 2 years ago with a lot more debt.

**Caoineag** · 01-22-2009, 09:01 AM

Originally posted by maat55 View Post

I've noticed that a lot of people don't get serious about fixing their debt problems until the problem is overwhelming. I would be scared if I had 100 dollars on a card I could not pay in full.

I have noticed that too. Which is weird to me because I have always gone through cycles of paying them off. This last time I got so serious because I hadn't realized my spouse had accumulated a lot of debt at high interest rates until I set him down and said, okay enough, let's pay it off now that we are fully employed. I nearly had a heart attack when he told me it wasn't just my debt that we needed to pay off.

As to being scared about debt, I think my student loans are responsible for curing me of that. My credit cards have always been cheaper than my loans so it was always in my best interest to use them to avoid loans because I would pay it off before interest would accrue ( I was my sole financial support through college).

**ksluis62** · 01-22-2009, 03:29 PM

Originally posted by maat55 View Post

I've noticed that a lot of people don't get serious about fixing their debt problems until the problem is overwhelming.

I would fit into this category. I've been far too "comfortable" through the years carrying CC debt. My interest rates have generally been fairly good on one hand, and on the other, unexpected expenses seemed to have always popped up to divert attention from paying down debt. Much of my problem has been a lack of budgeting... many of the "unexpected" costs were really just "unbudgeted", and could have been planned for. 4 kids in soccer and hockey, lots of out of town tournaments, team and coaching fees. I spent $800 to send my daughter to a soccer tournament in Orlando after X-mas, then found out last week I owed another $450 to cover coach and chaperone travel expenses. I probably could have figured that out earlier and planned for it better.

Anyway, I'm serious now and chugging through debt. 2 Years and 9 months from now, I'll be free and will start building up savings.

-ksluis62
www-dueminder-com

**maat55** · 01-22-2009, 03:39 PM

Originally posted by ksluis62 View Post

I would fit into this category. I've been far too "comfortable" through the years carrying CC debt. My interest rates have generally been fairly good on one hand, and on the other, unexpected expenses seemed to have always popped up to divert attention from paying down debt. Much of my problem has been a lack of budgeting... many of the "unexpected" costs were really just "unbudgeted", and could have been planned for. 4 kids in soccer and hockey, lots of out of town tournaments, team and coaching fees. I spent $800 to send my daughter to a soccer tournament in Orlando after X-mas, then found out last week I owed another $450 to cover coach and chaperone travel expenses. I probably could have figured that out earlier and planned for it better.

Anyway, I'm serious now and chugging through debt. 2 Years and 9 months from now, I'll be free and will start building up savings.

-ksluis62
www-dueminder-com

I didn't get serious about my finances until a few years ago. I have always had a fear of CC debt after watching my dad in debt to them for years.

Since becoming a DR fan, I have changed my philosophical mentallity towards my finances.

Good to see you are serious also, good luck.

**maat55** · 01-22-2009, 03:45 PM

Originally posted by Caoineag View Post

As to being scared about debt, I think my student loans are responsible for curing me of that. My credit cards have always been cheaper than my loans so it was always in my best interest to use them to avoid loans because I would pay it off before interest would accrue ( I was my sole financial support through college).

The reason I say I am scared is because I am very structure oriented. I am my strongest when I stick to my plan, not paying in full would be a small mental loss.

**ksluis62** · 01-22-2009, 03:50 PM

Originally posted by maat55 View Post

I have always had a fear of CC debt after watching my dad in debt to them for years.

You know, the funny thing is, my parents always seemed to be in debt. They had 5 kids truckin' around to sporting events, and we cost them more than their income! So if anything, that taught me it was OK to be in debt. I have not been able to break the mold yet, but I'm working on it!

**waijai** · 01-23-2009, 06:50 AM

I've been debt free a couple times in my life, but always ended up back into major debt. This last time has been the worst, but I know my mentality that got me into it now. From now on, all my finances will be heavily controlled and debt will be minimal. I'd love to live on a cash basis.

One of my finance professors said living on a cash basis is simple, but not easy.

Credit Card PIF or not