I got a shock! - Page 2

Boy'nBlack · May 7th, 2008

Added credit is bad. You should tell them to NOT do that. It's open revolving credit and hurts you. If you were $750 before, keep them to that.

If you use it, pay it off in 30 days. If you can't, don't. You get just as crummy APR's from pay advances from your bank. If it's open at $2K and not used, it's still shown as a charge you can, and assumed will, charge up. It's a ding. Say you want to get credit elsewhere for a $2K laptop. They see you can afford it possibly, but also see you can turn around and charge $2K on your open credit card. They now assumed you can't afford $4K and things get sticky.

Stop them from doing that. Keep it to a figure you use, and not as something like hitting the lottery. In time, you may find yourself with $20K in revolving credit and trying to back it all out just to get a basic loan. (where there it may be a $20K car declined because you have $40K open if approved).

So now it's spent, and let's assume it's a good 12% APR. Most are 22%, but I digress. You've just paid $2240 for a $2000 laptop, and that's if you pay toward the principle. That's not real, and seldom happens. If you make the monthly payments and nothing toward the principle, that's a $5,000 laptop. Better like it, you then payed double retail for it! And good buyers never pay retail to start with. And this is assumed at a decent 12% APR and not the common 19-22% they hand out to non platinum holders.

WhiteEagle · May 7th, 2008

I never said I'd spend all of it

. I've only used a 100 and some so far, and that's for living expenses and business-related fees.

I will pay off all my debt by May 2009. That is a definate. I hate my debt and will get rid of it as fast as I can. (the refund I always get at the end of February always helps big time

)

screwballl · May 7th, 2008

$2K is still low nowadays but the increase means his credit history is getting better and it will help him more than it hurts... as long as he doesn't go charging up $2000 worth in the first few weeks and takes months to pay it off.. thats where it hurts you.

**Hitman** · May 7th, 2008

Quote:

Originally Posted by garetjax

I guess you made a decision then?

I think they want you to spend some of that economic stimulus money the Feds gave you in order to cover the outrageous interest rate your credit card will charge you for charging $2,312.10 to it.

Get a HP or even a regular Inspirion. They aren't bad notebooks, brother. And you'll be saving yourself some cash to boot.

He lives in Canada. NO STIMULUS MONEY FOR YOU!!!

Boy'nBlack · May 7th, 2008

I can not agree less. The open revolving credit hurts you if you actually want to get credit. When I was buying this last house, I had to close 4 cards because I had over $120K in revolving credit. When I bought my liberty in 2002, same thing. I had over $30K in revolving credit and the $17K purchase I could afford was looked at as a $47K purchase. Closed/backdown on open credit and it made the 12.6% APR turn into an 8.6% buy.

Having all cards charged up, it's a different light shown on the purchases. You then are dictated by your minimal payout and actually hurt worse than open credit. They then assume you're not doing the right thing and paying the minimum. That's then compounding interest. That's the secret to investing in stocks, but the recipe for bankruptcy when credit is concerned. They pile on, and the user agrees. That's why the housing market is what it is.

WhiteEagle · May 7th, 2008

I'm gonna pay it off...already re-got rid of my Reader's Digest problem, and I'm refusing any and all parcels from them, getting them shipped back and canceled!

Trust me, I'm gonna save up for my custom Dell XPS and pay more, but means I'll pay $0 in interest for it! Same thing for a moped, save and then buy. Probably will do the same for my house! Why get debt when I can save and avoid it?

**Hitman** · May 8th, 2008

Quote:

Originally Posted by WhiteEagle

Trust me, I'm gonna save up for my custom Dell XPS and pay more, but means I'll pay $0 in interest for it! Same thing for a moped, save and then buy. Probably will do the same for my house! Why get debt when I can save and avoid it?

Houses are a different kind of debt. There is nothing wrong with owing a mortgage. It's much better then the alternative of throwing money away at rent every month. Save the money for the down payment, and closing cost.

WhiteEagle · May 8th, 2008

I don't want to be stuck with a **** mortgage for 20+ years! After all, I'm gonna build my house, not buy some old fixer-uper!

**Hitman** · May 9th, 2008

Quote:

Originally Posted by WhiteEagle

I don't want to be stuck with a **** mortgage for 20+ years! After all, I'm gonna build my house, not buy some old fixer-uper!

Instead you will be stuck paying rent for 20 years until you save the money to buy a house cash. I don't think you truly understand how buying a house works. Think of it this way, no matter what you have to pay to live somewhere, if your not paying a mortgage, your paying rent. The problem with rent is you never get the money back. When you buy a house your house gains value. On average the value of a home doubles it's value every 10 years. So if you wait say, 10 years to save the money to buy a house, you actually loose money, because the house will be twice as expensive as it was 10 years prior. In most areas the cost of rent is just as much or more then the cost of a mortgage of a similar home.

onebxr · May 9th, 2008

Quote:

Originally Posted by Hitman

Instead you will be stuck paying rent for 20 years until you save the money to buy a house cash. I don't think you truly understand how buying a house works. Think of it this way, no matter what you have to pay to live somewhere, if your not paying a mortgage, your paying rent. The problem with rent is you never get the money back. When you buy a house your house gains value. On average the value of a home doubles it's value every 10 years. So if you wait say, 10 years to save the money to buy a house, you actually loose money, because the house will be twice as expensive as it was 10 years prior. In most areas the cost of rent is just as much or more then the cost of a mortgage of a similar home.

this is probably the most intellegent thing hitman has said to date!

This is true, there is a such thing as agood debt and bad debt. A house is good debt in that a house is more of an investment than a hinderance. It is one of the few things in life that gain value as they get older. Think of it this way, they cant make any more land....
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