Debt - so easy to get into

[turtledude]

Re: Debt - so easy to get into

...I totally understand...you are not alone!...I was told that people lucky enough to own homes have been refinancing them on an average of every 2-3 yrs (in order to pay for consumer debt)...now that the housing market is cooling, consumer spending is predicted to drop, with recessionary force (except for oil!)...despite that, did you ever notice that when your credit score drops, you get MORE credit card offers??? [img]/forums/images/graemlins/smirk.gif[/img]

[tuffstuff]

Re: Debt - so easy to get into

I gwey kunk dat BSer upside har headtap one day enuh [img]/forums/images/graemlins/tongue.gif[/img] [img]/forums/images/graemlins/704555_dwl.gif[/img]

mtngal, weh di update deh? U still inna di dawk inna di fetal positian a pick out yu headside and suck yu big toe?

[ QUOTE ]
Interest rates have been a consumer's friend for years now, bumping along the bottom of historic lows. But that has been changing, and rising rates are gnawing at family budgets.

It's bad enough that high gasoline prices are soaking up extra cash. Many consumers who carry debt are seeing their interest expenses rise, and the Federal Reserve, which meets Tuesday, could raise rates yet again. Some consumer interest rates have moved up in lockstep.

The prime lending rate, a benchmark for many short-term interest rates, has risen to 6.5 percent in August from 4 percent in June2004. If the Fed raises rates,the prime lending rate will surely go up again.

For Americans, paying interest has become an integral part of spending. Mostly, that's a bad thing--a product of the buy-now, pay-later mentality. If you can't pay for a vacation or new laptop, it's time to evaluate whether you need it at all.

That's because paying interest on purchases, especially at outrageous credit card rates, can make them wildly

expensive. If you bought an iPod digital music player for $400 on a credit card at 18 percent and only paid the minimum balance, it would cost $615 by the time you're done paying for it five years later.

Knowledge about consumer interest rates can quickly translate to saved money.

How much do you know? Take this quiz to find out:

-- You're paying to refinish your basement. Which is the best financing move now?

a) Home-equity loan. b) Home-equity line of credit. c) Credit card.

Home-equity loans are the best deal now because they have a fixed rate, which won't change as interest rates rise.

-- The company has slowly raised the interest rate on a long-held credit card to 15 percent from 9 percent in recent years, and you're paying more interest on the revolving balance. You should:

a) Shop for a card with a lower interest rate. b) Stay with the card because you've had it for a long time. c) Complain to the Better Business Bureau.

Get a new card. There are too many good choices among cards to stay loyal for no good reason.

-- You're the ultimate procrastinator and haven't refinanced your 30-year mortgage from the 10 percent rate you got in 1990. What should you do?

a) Forget about it. You're too late to get a better rate. b) Wait to see what the Federal Reserve does at its next meeting. c) Refinance now, assuming you'll stay in the house long enough to recoup the closing costs.

Don't delay in refinancing. You're lucky mortgage rates have stayed low for this long.

-- You owe thousands of dollars on several credit cards, but you really want a new flat-screen TV. How should you buy it?

a) Use the store's offer of no payments for a year. b) Charge it on the lowest-rate credit card. c) Pay off all your credit cards and start saving money to pay cash for it.

Pay cash. If you have to use a credit card for a discretionary purchase, you can't afford it.

-- You found your dream house that you'll spend the rest of your life in. Which type of mortgage is best?

a) Fixed rate. b) Adjustable rate. c) Interest-only.

Fixed rates are the best deal for people who will stay in the house a long time, especially when most experts assume interest rates will increase in coming years.

-- You have a fixed-rate credit card. Which is true?

a) Interest rate hikes don't mean anything to me. My rate is fixed. b) "Fixed rate" is relative. c) Everybody should have a fixed-rate card.

Rates aren't truly fixed. Credit card companies can still raise a "fixed rate" with 15 days notice.

-- It will take you years to pay off your credit cards. You should switch to which type of card?

a) A rewards card. b) The lowest-rate card you can get. c) A card with a low-rate introductory offer that soon reverts to a high rate.

Go with the lowest-rate card so you pay the least interest, all else being equal. Surfing your balance to new introductory offers can be dangerous if you're not disciplined.

-- You're buying a certificate of deposit. You should:

a) Lock in a long-term CD. b) Buy medium-term CDs. c) Buy a series of short-term CDs.

Purchasing short-term CDs is the way to go when you expect interest rates to rise. As they mature quickly you can roll them over into CDs at higher rates.

For more consumer-friendly information on interest rates, go to www.bankrate.com.

[mountaingal]

Re: Debt - so easy to get into

Thanks, everyone, for your advice and sympathy. Tuffy, BStar - that man comment was said in a moment of weakness...what i really meant was i wished i had someone to share this whole financial thing with. and walla - here you guys are... [img]/forums/images/graemlins/70459-hugs.gif[/img]jamaicans.com [img]/forums/images/graemlins/70459-hugs.gif[/img] oonu betta dan man, at least in this respect... [img]/forums/images/graemlins/grin.gif[/img]

so, i met with the debt counselling lady, and we went over my monthly expenses speadsheet. first thing, she asked me nuff questions i'm ashamed to say i didn't know the answer right off the top of my head. like, what's the interest rate on my line of credit? when is my mortgage due (for renewal)?

then she question my monthly figure for food (she thought it was too low). She say a good test is to take that money out and put in a jar and only spend on food from it and see. [img]/forums/images/graemlins/blush.gif[/img] [img]/forums/images/graemlins/blush.gif[/img] well, when she put it that way.

i had a lot of information missing, so i have a follow-up meeting with her in October. in the meantime, this is the advice she gave me:

1. me and the girls should carry lunch. one a mi dawta already tell me she not doing dat, but she agreed to take $15 instead of $25 a week for lunch money. the other daughter agreed to carry lunch, and i'm carrying lunch too.

2. i must see if i can stop paying insurance on my mortgage, and instead, put the money toward some kind of life insurance (lawd mi figget di term). but i think one of the conditions of getting the mortgage from the bank was to take mortgage insurance. mi haffi look into that. i confess my brain started to fail me when i was listening to her, i had no clue what she was talking about.

3. tell mi older daughter to get a job and start carrying her own expenses. well, we had already started talking about that, so what i told her is that she should get a job by the end of September.

4. take the bus instead of driving downtown and parking. It costs me $50 a month more to park than to take transit, plus extra in gas. i'm wavering on this, though - i like the convenience and shorter commute from driving.

5. discontinue my department store credit cards. she informed me that one of them is 28 per cent per year interest - christ! so me ago do dat - pay the last bill den cut dem up.

6. start an emergency/maintenance fund as a savings goal, and use this for any unexpected house repair expenses, gifts, etc.

7. don't take a part-time job, because at my tax bracket, too much of that money is going to go in taxes. this is another one i'm wavering on, because i think i might still come out ahead if i take the job. but then i think of the sacrifice in time with my kids... the one reason i've resisted working part-time for all these years.

8. don't use my debit card for everyday purchases - they add up and are harder to track. so i'm starting to leave it at home, though i get nervous about getting caught a road without money.

9. cut all the fancy features off my phone - get rid of voicemail and get an answering machine, for example. i might do this, a peer telemarketing calls mi get anyway.

as for my Visa gold card, I've decided to pay it off using my line of credit, which has a lower interest rate than my new lower-rate emerald Visa card.

life goes on. it's empowering to have a plan, though, and to start taking action.

[Q3210]

Re: Debt - so easy to get into

A friend once said to me, a co-worker too he was till he retired last year, that if you dont owe nobody nutten, nobody gwine remember yu. [img]/forums/images/graemlins/frown.gif[/img] [img]/forums/images/graemlins/grin.gif[/img]

[mountaingal]

Re: Debt - so easy to get into

hi, Qman - thanks for that word of wisdom, [img]/forums/images/graemlins/704555_dwl.gif[/img] but really, considering seh a peer bank and ting me owe money, mi no too fussy if dem no memba mi afta mi dead.

[Q3210]

Re: Debt - so easy to get into

You know how it goes in Jamaica. Borrow from yu friend. Owe Pardner if you dont pay up yu compulsory deposits. Trust from Missa Chin shop. And dem ting de.
More people to people contact than institutional where if yu `feneh` dem summons yu to court.

[grandonna]

Re: Debt - so easy to get into

How does the pardner ting work in Jamaica Q?

I am not in debt cept 17,000 for my house and I got it for sell for 100,000 and I am ready to sell for 80,000 I want to be out of debt and I will live in a tent if I have to and I can live off what I make off the house for the rest of my life...If I didnt have to pay for organic food 200 dollars a week we would be rich!!!!!!!!!!If only we didnt have to eat..........Actually I could go without much food it is the children [img]/forums/images/graemlins/70365-flirt.gif[/img]