redman Posted June 13, 2003 Share Posted June 13, 2003 What % of your annual household income is the amount of your current revolving debt, e.g. credit cards? This doesn't include mortgages, student loans, car payments or other types of debt. I'm talking pure, short-term consumer debt. I'm just curious. Mine (ours) comes to around 10%. Link to comment Share on other sites More sharing options...
redman Posted June 13, 2003 Author Share Posted June 13, 2003 Oops, the second line should read "1-5%", but you know what I meant! BTW, I see more hits on this thread than votes - vote you b@stards! Link to comment Share on other sites More sharing options...
riggins44 Posted June 13, 2003 Share Posted June 13, 2003 My wife had couple from before our marriage. Working on getting them retired. I've had alot of experience working with unsecured debt, from job in general to a banking relationship. Most people have, what I would call, very high revolving debt. Thing is alot of unsecured debt can cost you in getting other loans. It will throw beacon score off as well debt to income ratio. Most lending institutions want to see secured debt vs unsecured. Link to comment Share on other sites More sharing options...
redman Posted June 13, 2003 Author Share Posted June 13, 2003 Our personal goal is to pay all of ours off by the end of the year. While my wife is an attorney also and our combined gross is certainly good, two sets of law school loans (both from private schools) and the mortgage take big chunks out of our after-tax income, so paying off the revolving debt will be no mean feat. Fortunately, we're expecting a big check from Uncle Sam that will go a long way towards that, so we'll see . . . I just look forward to the point when the only plastic debt I have is what I've put on the card last month and will pay off this month. Link to comment Share on other sites More sharing options...
riggins44 Posted June 13, 2003 Share Posted June 13, 2003 Redman, lending institutions look at student loans differently. They don't have the negative impact of unsecured debt. Also, you are better off to have several credit cards with low balances vs. couple that are maxed or close to being maxed out. High balances as a high percentage to available credit sends up red flags. Link to comment Share on other sites More sharing options...
redman Posted June 13, 2003 Author Share Posted June 13, 2003 Nothing's maxed out, and while we consolidated some balances onto some credit cards with 0% APR for however-many months, they're still spread across 4-5 cards between us. I'm not too worried about our student loans . . . even though I always joke that Sallie Mae was the most expensive chick I ever dated! :laugh: Link to comment Share on other sites More sharing options...
Henry Posted June 13, 2003 Share Posted June 13, 2003 about 6-7 years ago I was $13,000 in CC debt and was paying about $600/month just to stay even. Then we sold our house for a mint, I payed it all off, and for about the past 4 years only use my mastercard in dire emergencies, which is never. We have a bit socked away and a rather large line of credit against our current house if the need arises. I keep two cards around just in case, but never plan on using them ever. I've learned my lesson. Link to comment Share on other sites More sharing options...
The Wicked Wop Posted June 13, 2003 Share Posted June 13, 2003 I keep two cards around just in case, but never plan on using them ever. I've learned my lesson. Same hear. If you are pressed to have a CC because you don't like carrying cash.....get a check card. When you see it come out of your checking account you are far more likely to stay in control, than if you put it on a regular CC. Link to comment Share on other sites More sharing options...
Kilmer17 Posted June 13, 2003 Share Posted June 13, 2003 I use my CC all the time. Love the miles. There are months that my business ledger is a little in the red and I have to float a month or two. But otherwise I keep it at Zero. Link to comment Share on other sites More sharing options...
The Evil Genius Posted June 13, 2003 Share Posted June 13, 2003 Ran up about 8k in CC debt over 6 years of college (undergraduate and graduate school) and over the 1st 2 years of working in the real world...all on stupid stuff. Paid that all off in 10 months though...which felt like the best thing I have ever done. I then paid off my car 23 payments early...and am working on paying down my ridiculous amount of student loans... I wish could re-fi them (since rates are like 4-5%) - but I consolidated them 2 years ago (grrrr).... Next up will be saving enough to buy a house... Link to comment Share on other sites More sharing options...
codeorama Posted June 13, 2003 Share Posted June 13, 2003 My wife and I were pretty good with our credit cards while we lived in a condo, but when we bought our house a year and a half ago, we had to buy appliances (refridge, washer, dryer, microwave), Den furniture (we only had a "great room" before) and we went ahead and bought a big screen tv and a few other "wants". We are not over extended, but would love to be CC free again, it will probably take us a couple of years. Link to comment Share on other sites More sharing options...
gbear Posted June 13, 2003 Share Posted June 13, 2003 I overspent on CC in college. I paid them all off over the first 3 years out of college. Now I have a CC which I try to use once a month just so I can pay it off and establish credit history. Most of the times though I just use my check card. Bank of America has check cards with USAIRways miles. I'm all about that. I like getting miles without incurring CC debt. My fiance is the other way though. She uses her credit card and then just pays it off every month. That works too. Our current goal is to get married in April of next year and escape that and the honeymoon with no debt from those. Link to comment Share on other sites More sharing options...
The Evil Genius Posted June 13, 2003 Share Posted June 13, 2003 Bank of America has check cards with USAIRways miles. Holy shiznit Batman! Do they charge an annual feel for that? Do you have to maintain a certain balance also? Gimme gimme gimme the details... Link to comment Share on other sites More sharing options...
TheKurp Posted June 13, 2003 Share Posted June 13, 2003 Just made the last payment on my Toyota Tundra. Other than my mortgage, I sitting at zero debt. Link to comment Share on other sites More sharing options...
Kilmer17 Posted June 13, 2003 Share Posted June 13, 2003 Kurp, have you read Rich Dad/Poor Dad? good ? for everyone. Link to comment Share on other sites More sharing options...
TheKurp Posted June 13, 2003 Share Posted June 13, 2003 No Kilmer, can't say that I have. Personal finances bore me. Yes, it's a character flaw but one I have little motivation to correct. I contribute to my company's 401k, have a little in the stock market, and some in savings. Other than that, I don't spend much time worrying about money or how to save it. I guess the biggest reason for my lack of motivation is that I can't envision ever retiring. I have a compelling need to feel productive and enjoy the feeling of having accomplished something every day that passes. While I know I won't be a software engineer for the rest of my life, I'll do something that will bring in income, not for the money itself, but for the sense of worth. I should have a decent retirement package from Lockheed when I retire (should I make it without getting laid off), so combining that with whatever else I do (even if it's selling suntan lotion on the beach) will be just fine for me. Of course if I ever get married and have kids, my priorities may shift dramatically. Link to comment Share on other sites More sharing options...
Kilmer17 Posted June 13, 2003 Share Posted June 13, 2003 It's a fairly entertaining and easy read. The reason I bring it up is because if you have no debt other than your mortgage, you should consider buying more property and renting it out. Gives you a better tax break and builds wealth with little risk. Just an FYI. Link to comment Share on other sites More sharing options...
TheKurp Posted June 13, 2003 Share Posted June 13, 2003 The buying property thing has crossed my mind. Of course what I'd like to buy is a condo/villa in St. John but the prices are far more than I can afford. I have a couple of friends who want to do this as well so we've been exploring ways to combine our resources to pull this off. Whether it'll happen or not I don't know. If the book is a fairly easy read then it's right up my alley. I may pick up a copy. Thanks for the suggestion. Link to comment Share on other sites More sharing options...
redman Posted June 13, 2003 Author Share Posted June 13, 2003 Kilmer, on your recommendation I bought Rich Dad, Poor Dad a few weeks ago off of Amazon and I'm now reading it. It's a great book, great for its simple "common" sense. I liked it so much that I also bought a copy off of Amazon for a buddy of mine who I've been talking with about jointly investing in real estate. He'd already read it, but was appreciative to get his own copy. I'd recommend it to anyone. And thanks Kilmer for the recommendation. Link to comment Share on other sites More sharing options...
Kilmer17 Posted June 13, 2003 Share Posted June 13, 2003 Yeah, I gave it for Xmas gifts this year. Kurp, you can easily afford it. Hers's how. Find a condo complex that will alow for rentals as well as personal. Without overbuying, buy a property without putting money down. How? Easy. Get an appraisal that shows the value is more than the asking price. If you cant find one, put down 5% and get a 80-15 piggyback loan. Then do a simple cheap upgrade (retile, new cabinets etc) then have it reappraised and say the upgrade cost the equivalent of your downpayment. THen refinance for the full amount. As long as you can rent it out for more than your mortgage (even close to it is fine) you win. The interest is tax deductable and any depreciation is a capital loss. At the same time the property is actually APPRECIATING and that's the best part. 3-4 years from now you can have it reappraised and refinance it for the full value and pull out the difference TAX FREE. Then use that money to buy another property. and so on, and so on....... Link to comment Share on other sites More sharing options...
carlsbadd Posted June 13, 2003 Share Posted June 13, 2003 This threas is right up my alley! I work in the Mortgage industry and look at credit all day long. It is best to have at least 3 line of credit open, at 1/2 of the maximum limit. This will givwe you a great credit rating. My wife and I have alot of debt but it's managed pretty well. I would say it's about 8-12% of our gross. Since I work on commission there are lean times and boom times,so our credit debt changes with it. We have gotten better at keeping it low, but I also added into our figure the car loans. I would add that being with a good credit union helps keep banking costs down and you need not be in any special group to join one. Worth checking out. Whatever happens in your life, I strongly encourage everyone to stay away from Debt counselling services,nothing will ruin your credit more than that,you are better off declaring Bankruptcy. Link to comment Share on other sites More sharing options...
TheKurp Posted June 13, 2003 Share Posted June 13, 2003 Good advice there Kilmer, I only wish it would work in the V.I. V.I. banks won't hand out mortgages with less than 20% down. With most properties listed at $1M and above, $200k is a bit steep for me. Renting is the other problem. Long-term rentals don't come close to paying the mortgage so most rental properties are by the week. Even at that, with the villa management fees and upkeep it's unlikely you'll break even. The payoff is in the appreciation. The trouble is trying to stay afloat while you give time for the appreciation to add up. But there's no reason I can't apply the strategy to homes here in Central Florida. Again, thanks for the suggestion. Link to comment Share on other sites More sharing options...
jbooma Posted June 13, 2003 Share Posted June 13, 2003 My wife and I don't believe in paying interest. We pay off the entire credit card bill every month. The only reason we use it is for miles so we can fly for free When I was younger I was one of those suckers he bought the "pay the minimum" part of the credit card. Then I realized the CC Company was making a furtune off of me I think the house should have passed that bill where all credit card companies should inform the consumer how long it would take to pay off you debt if you just pay the minimum. Our school systems don't teach the young kids this so they have no clue. That is why the majority of kids after college have bad credit. Link to comment Share on other sites More sharing options...
Kilmer17 Posted June 13, 2003 Share Posted June 13, 2003 Sorry Kurp, missed the St. Johns part. :shootinth Link to comment Share on other sites More sharing options...
jbooma Posted June 13, 2003 Share Posted June 13, 2003 Originally posted by Kilmer17 As long as you can rent it out for more than your mortgage (even close to it is fine) you win. The interest is tax deductable and any depreciation is a capital loss. At the same time the property is actually APPRECIATING and that's the best part. 3-4 years from now you can have it reappraised and refinance it for the full value and pull out the difference TAX FREE. Then use that money to buy another property. and so on, and so on....... Only one problem with that, you have to live in the place for at least 2 years before you plan on selling it or you will get killed on taxes. Link to comment Share on other sites More sharing options...
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