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smilingheart1's avatar

What, for you, is the threshold of personal financial debt?

Asked by smilingheart1 (6431points) November 18th, 2011

What is your comfort level of amounts outstanding from month to month on credit cards especially? Do you carry a credit card balance from month to month or do you tighten your belt if necessary and just not purchase on credit until your existing balances are fully paid?

Please discuss this at length if you wish, what your philosophy is. For instance, I have heard it said that the generation now in their early adult life have the attitude that get as much as you can while you can because the thing (world economic system) is going broke and it won’t matter anyhow in a short while.

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7 Answers

LuckyGuy's avatar

I have no credit card debt. None. I pay the bill in full every time. That way I get an interest free loan, paid for by the folks who only pay the minimum balance.
If I had a running balance here’s what I’d do. Drop cable, not buy that TV, skip going out until it was paid off, not drink that beer or any other recreational activity, quit smoking…

Credit card debt is the worst ripoff around – except for payday loans from Vito and the boys.

If you are one of the folks with a 42 ” flat screen on your credit card bill. Thanks.

gailcalled's avatar

Other than mortgage and car payments (now paid off) I carry no debt and never have. If I can’t afford it, I don’t need it.

bkcunningham's avatar

We only have one credit card. We never carry a monthly balance. Never. For the same reason @worriedguy explains. It is an interest free loan when paid in full monthly. I think for me, it is the way I was raised. My mom and dad didn’t even have a mortgage on their home. They saved and paid cash for vehicles.

poisonedantidote's avatar

I have zero debt, I don’t even own a credit card, I don’t even have a card for the ATM machine. I use cash only and accept cash only. However, I would be comfortable going in to debt to the tune of 5000 GBP.

Neizvestnaya's avatar

I haven’t used credit cards in over a decade. I have no debt other than one personal, friend-to-friend loan. I’ve not had car payments in almost a decade and have little desire to ever go there again.

A mortgage is the only debt I would carry again and maybe a short term car payment like I used to where I’d finance and then pay it off in the first 6mos.

LuckyGuy's avatar

My parents saved and paid cash for their cars. I’m like them. My dad taught me “It is all about the interest rate.” He got a 30 year, 4.2% mortgage for his home in 1955. In the late 1970’s, bank interest rates began to skyrocket and he was getting paid more in interest at the bank than he was paying for the mortgage. He would get calls from the bank with offers for him to pay it off early. Of course he could have paid it off but he decided he would milk it and make money off the bank for long as he could. He carried that mortgage right out to the full 30 years. He was so proud of that. He taught me well.

HudsonHero's avatar

We’ve been in debt twice in our marriage (meaning credit card debt). Once when my newborn had surgery and we stopped sticking to our budget. We paid that off when we sold our first home with our equity.

Then last year I was out of a job and racked up credit card debt. Now my husband is working a 2nd job so we can pay that off and be debt-free. Our goal is to only have a house mortgage that will be paid off in 20 years (sooner if I can do double payments.)

I think living debt-free offers lots of freedom. I rather earn interest than pay interest.

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