Another Economic Depression?

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Peachy

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I know exactly where you're coming from, CatcherGirl! BTDT with heavy credit card debt and it was a loooong time (years!!!) climbing out of the hole. We still have ONE credit card for convenience, especially with online purchases. But only things are put on it that can be paid off by the next billing cycle. We learned our lesson the hard way, too.:rolleyes:

~Pramrider
Honestly, I fail to see how people can rack up 30-50 thousand dollars (or Euros) in credit without purchasing any really expensive items, like a house or three cars. But no one in his right mind would finance anything like that with (short term) credit card debt - much cheaper to get an ordinary loan from the bank.
If you need debt to finance absolutely essential items or services (food, electricity, rent, transportation) then you either need to stop living a life of luxury that your salary cannot afford, or you need to find a better paying job.
Personally, I've never understood why people buy useless junk with debt - if I don't have the money, I cannot spend it. End of story! If I happen to have excess money, I tend to just save it rather than blow it on stuff I don't need.
The only debt I can understand and (mostly) encourage is student loans, as I have had those myself (government student loans). When they became due, I just paid the whole thing off in one go after getting a nice 40% discount for good grades and having finished my degree early.

But then, it's easier for me because credit cards are a very "new" thing in this country. Up until 5 years ago, credit cards were only a method of (rarely accepted) payment that wouldn't even let you run a balance on it after the montly bill was due. Short term debt was exclusively done by checking account overdrafts, and your bank has a pretty good idea about your financial status because they have a pile of historical account data about your income and spending, so they kept a tight lid on who gets money and who doesn't.
However, I recently got my first credit card with a 2,000 Euro limit on it that I don't have to pay back immediately (I got it because it gives me a 5% cash bonus on gasoline :D), and all I had to do was fill in a form and let them run a credit check. And now the EU is trying to make overdraft credit illegal...great. Soon we'll all be in debt and have hours of commercials for credit consolidation services on TV ... just like in America. :(

Peachy
 

Aidy

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Well, this is how people get in debt Peachy.

My parents were on a single income with 2 kids. They had bought a house before my dad got out of a job and so had to pay for it. (I'm not counting the house mortgage as a debt in this case because the repayments are the same as a rent) My mum worked(works still) at a supermarket for $500 a week. The mortgage was $250, which left $250 for necessities. $100-150 a week of food for four people (only necessary food. I went 3 years without us having snacks in the house unless mum made us pancakes) so that's $100 to $150 to spend on bills when car registration is $250 a year or more, third party insurance you have to legally have and that's $400 a year, not to mention electricity, rates, water and all the other crap.
Then they also had to pay for fuel and still have money left over for clothes. (Hence why my first t-shirt since I was like, 9, that wasn't a hand me down was when I was 14)
So basically, with only bare necessities we were forced to spend around $600-$700 a week with only $500 a week to spend.

Of course, they could have sold the house but then we would have had to go to homes west housing, which my parents didn't want us to be raised in those areas due to crime and crap. Dad could have stopped trying to start up the business he'd been working on for years (but that would be letting down the 3 family members who had invested $10,000 each in it to get it running... it still didn't happen though)

Still, it's hard to figure out how people get in debt when you haven't been in it yourself. It's actually funny that the more money you have the worse off you are in regards to debt. Lotto winners are notorious for bankruptcy and my generation, the mine workers, are heavily in debt even when an 18 year old can earn $80,000 minimum. (Exchange rate is 90 AU to the American dollar or 60 to the Euro.

Though I do find it hard to understand how a single person can get in debt and how a young person can get in debt. I've only taken one loan out ($1500 last month to repair my brothers car) and I payed that off in 2 weeks.
 

Pramrider

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Honestly, I fail to see how people can rack up 30-50 thousand dollars (or Euros) in credit without purchasing any really expensive items.....
We weren't quite that deep in debt, only about $8k to $9k. That was bad enough, however. I'd really be worried with much more debt than that hanging over my head. We kept doing balance transfers when receiving new CC offers in the mail with 0% introductory rates for 6 or more months. It would have taken much longer to climb out if it wasn't for those 0% offers we took advantage of. We still get a couple pre-approved CC offers in the mail each and every week. The banks over here make it easy for you drop back into another hole of debt if you're not careful. More and more, people are using plastic for nearly every purchase, large or small, including food at the supermarkets. My daughter who's a market cashier is regularly having customers try to pay with a CC only to have it denied due to being maxed out. Then they dig around in their wallet and try another one. Sometimes they try 3 or more before one still has unused credit on it. That's pretty sad!:frown:

~Pramrider
 

Peachy

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We still get a couple pre-approved CC offers in the mail each and every week.
I'm glad unsolicited junk mail is illegal here. So no credit card offers for me here. However, when I lived in the U.S., it took your companies less than half a year to become aware of my existence, so after about 6 months of residence in your country, I received my very first credit card offer in the mail! I felt proud...and thought about getting the card, maxing it out and then leaving the country. :D

Peachy
 

Pramrider

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I'm glad unsolicited junk mail is illegal here. So no credit card offers for me here. However, when I lived in the U.S., it took your companies less than half a year to become aware of my existence, so after about 6 months of residence in your country, I received my very first credit card offer in the mail! I felt proud...and thought about getting the card, maxing it out and then leaving the country. :D
:laugh: I tell you, Peachy, if it weren't for all the junk mail we get the mail carrier would only be stopping at our box about three times a week to drop off bills and/or employer related info for one of us. Oh, and on very rare occasions an actual letter or card from someone!:D

~Pramrider
 
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