how pathetic....

but pay off the total balance at the end of each month! Works for me...

EASIER TO CLAIM BANKRUPTCY. CATATONS. HAVEN'T A CLUE.

Yeah, until they start charging interest from the moment you buy.

That's coming to a credit card near you very soon.

The credit cards have the same problem the mortgages do and will exhibit the same behaviors.

At least not carrying a balance limits the damage!

Anybody carrying a balance on a credit card month to month is living beyond their means.

Slam dunk from Vitalogy.

Unrelated hijack: Vita-been wondering how your wife's pregnancy is going?

> Yeah, until they start charging interest from the moment you buy.
> That's coming to a credit card near you very soon.

When that happens, a pair of scissors will be coming to a credit card near me....

Hi Chris, things are going well with about 2 months left to go!

Thanks Vitalogy. Glad to hear it. You're in my thoughts.

I can't wait to start reading about your fatherhood stories.

"Anybody carrying a balance on a credit card month to month is living beyond their means."
"Slam dunk from Vitalogy."

Myopic point and mostly irrelevant to the majority of working Americans. Let me show you how that just doesn't always work.

The fridge dies. According to the "don't carry a balance" ethic, the family goes without a fridge for 3 months while you save enough to buy it without using credit.

The car dies. It needs $1,000 dollars worth of work. Without it you can't get to work. Especially in the current environment most people do not have that much extra cash laying around.

Even if a family has $10,000 loose cash laying around, there is always some unpredictable expense that can exceed it, medical emergencies being the most devastating financially.

There is the ideal case where what you say works, but in reality there are many reasons to pay interest on a balance in return for the time it gives you to keep your cash flow from being strangled by an unpredictable.

You both need to come down off your throne and open your eyes. The entire farming system in America relies on credit to pay the bills between harvests. Duh. Where did you guys go to school? Another example is educating children. The rising costs of education have made it near impossible for many families to send kids to higher ed without loans. And there is no real difference between loans and credit cards, in fact the secured loans mean the creditor can have your house or repossess your car, etc. whereas unsecured lines of credit can't easily shut you down if you can't pay.

Especially in these times of stagnant wages and jobs disappearing, "living beyond your means" (your words) does not mean living high, rather it indicates shrinking means.

I'm disappointed in you two. I thought you had a more thought out attitude but apparently all you care about is yourself.

You guys sound like a bunch of Republicans.

Would it be fair to say that we have a culture where people borrow money to buy frivolous things (like flat screen TVs and designer clothes), as opposed to using credit in case of real emergencies (like replacing a broken refrigerator or a water heater that has burst)?

I am glad that I have not had to borrow money in years; the last time was during an extended period of unemployment in 2002-2003. However, I borrowed the money from sources that charged lower interest rates than what the credit card companies wanted.

Mom & Dad????

The first place that I turned to was my credit line account at U.S. Bank. My parents then offered to lend me money, although I didn't ask for it. My dad said something like, "I can lend you some money and please don't say no because I'll be offended...."

Good ol' Mom & Dad! I like the payment terms at that bank.....just pay us back when you can!

Andy-

In no way was I putting myself above anyone else. I was speaking from my own experience.

Sorry to disappoint you that I’m not your typical American consumer. We don’t carry any debt, and when we do it’s certainly manageable. Not only have we paid off our mortgage but two new car loans, a kitchen remodel, new paint job, paid off one kids set of braces and other higher end kinds of things….ALL without your precious traditional job!!

We have consistently done things a bit non-traditional but we have always been aware that the mighty dollar has its ups and downs and even though we could go and buy a second car, we don’t NEED a second car.

Yes my soapbox (throne) has always been about personal financial responsibility. Oh by the way our fridge did die last year, but we could afford getting a new one because we were ready.

You want a medical emergency?

Back in 2006, my wife, daughter and myself wound up in a Bend hospital after two ambulance rides from Sunriver. (Food poisoning) Once we recovered and received the bills for our entire medical needs I contacted all involved and worked out a payment plan. They were all most willing as long as we paid something each month. Less than 6 months later our medical debt was paid off.

Sure things come up like you mentioned but many people have decided that a home entertainment center trumps an additional car payment or mortgage payment.

If people realized that one extra monthly mortgage payment a year could lower your traditional 30 year mortgage to 22 years you would think everyone would try and do it.

But no…we big time consumer driven American’s seem to want to drive gas guzzling, cooler than cool wheels. We seem to have forgotten our practical ways of managing our money.

It’s not about how much you make its how you spend it. It’s not about working harder its about working smarter. If that attitude is a bit hard for you to grasp then come walk in my shoes bro.

Here’s reality:

My wife and I lost 2 full-time jobs within a year and half of each other. Actually I was moonlighting bringing in an additional third of my salary, which I lost at the same time as my full-time job. We had a mortgage, new car loan and our first child on the way. My wife had spent the previous year on unemployment with no success of finding a job in her related field. She did find something part-time. Now she was out of unemployment benefits and mine were about to run out after spending a year looking for full-time work. Eventually found part-time.

It was during this time we went through our finances and created our worse case scenario budget. We learned what to spend and what no too. We had no health insurance and a baby on the way. We learned how to barter with our healthcare professionals. We asked for discounts not handouts. In most cases people were more than willing to work with us.



You want daily risk Andy…try self-employment in this kind of economy.

I do agree with your definition of “living beyond your means” which is how my wife and I operate.

Personal responsibility is the bottom line for me. If that’s too Republican for you….well then…

…I won’t go there.

I've read your story many times, Chris, which is why I was surprised you would make the "slam dunk" comment on Vital posting that carrying a balance is living beyond means. Clearly you know better.
So does Vit, but he's very much shoot from the hip. It's the knee jerk commentary that is out of place, not prudent fiscal management.

I've been self employed since 1994 and have watched a lot of net liquid assets be drained by the economy not providing enough business to live on, necessitating choices less than savory. What must be shown, here, however is that for every person/family that assumes liabilities for unnecessary expenditures there are probably 2 or more that had no choice. The economic oppression created by Republican management of the economy is now catching up to the top. Like Obama says, the pain is trickling up. Taken by themselves, the comments that triggered my response were, frankly, irresponsible or perhaps just reflective of being a little too caught up in oneself.
That is to say, Vitalogy's statement is just plain wrong. People carrying a balance do not necessarily live beyond their means.

It is easy to get in over one's head when income drops, inflation causes the prices of goods and services to skyrocket, the insurance industry is out of control, and energy prices do the same. Mostly because the country has a president whom is a functional moron.

Personal responsibility includes caring about and for your fellow man, not dissing those whom have fallen upon hard times which is exactly what you endorsed.

"The economic oppression created by Republican management of the economy is now catching up to the top."

Agreed!!

"Personal responsibility includes caring about and for your fellow man, not dissing those whom have fallen upon hard times which is exactly what you endorsed."

Goes without saying.

My response was a bit emotional as well so I apologize for coming off "holier-than-thou."

Having been through the downside, (we like the upside much better) we put in our own safeguards....and to be honest had some luck too and possibly some divine intervention along the way.

I do feel for those who due to no fault of their own have found themselves is a crises due to the lack leadership from our current administration.

More power to your self-employment.

I went to school at UO and graduated with a BS in Marketing and Management with a minor in Economics. I left school with both student loan debt and credit card debt that I paid off within 3 years of graduating because it was a priority to get rid of that debt.

I stand by my statement that if you carry a balance on a credit card, your are living beyond your means. I know this is a harsh truth some people can't handle, but it is the truth! If the fridge or your car breaks down, you should have a savings account to pay that bill, not rely on a credit card. If you don't, then you shouldn't own a car or own a home and it should be a big red flag that you're on the edge of financial disaster if one small bill means you must charge it on a card with no plan to pay back the balance within 30 days.

If you live paycheck to paycheck, you live beyond your means. Or, you're not working hard enough. It's either one or the other. Blaming the Bush Administration for the size of your paycheck only goes so far. If you're not cutting it in your current line of work, it's time to nut up and figure out something else to pursue. Trust me, I've been there and have made those tough choices and I'm only 36.

95% of Americans that carry balances on a credit card believe that having a balance on a card is how it should be, the American way. Especially younger people. This is so wrong!! Instead of a balance on a credit card, you should have a balance in your savings account! Even the lowest earner out there can save money each month if they made it a priority.

I don't mean to be "holier than thou" but consider me a disciple of Suze Orman.

I had to buy a fridge once. I moved back into a house that my EX abandoned , had to pay the mortgage again, child support, alimony and already had a credit card balance of 6000 due to Atty fees in the divorce...So what did I do? I bought a USED fridge at this little appliance store. They delivered it and set it up for me for 180 dollars, I payed half cash and half on credit card. It was 16 years old, but in good shape and it lasted me for 2.5 years when the circulating fan went out. By that time I could afford to buy a new one from Sears, cash.

Lesson: Swallow your inclination to buy a Cadillac when a Kia will do.

There are lots of options.

Fix the damn fridge. Get a used fridge. Borrow a fridge. Work in trade for a fridge. Beg for a fridge. Steal a fridge (or perhaps just find an older one that people want to give away). Share a fridge, etc...

Credit is nice, but absolutely not required to get along just fine in this world.

Having had to live without it for a while, largely for some crap that I didn't control, I find it easy now. It was not then!

Some minor league credit is just great. Anything past that is a waste and can only lead to trouble, IMHO.

Kennewickman: Good lesson! I often do the same.

Anybody carrying a balance on a credit card month to month is living beyond their means.

Whoever made this blanket swipe at Americans is nutty.

In the first place, most small business owners don't get a steady income. There are peaks and valleys. This alone proves the statement is nonsense. There are other good reasons to buy on credit but I need not go into detail as the statement is already proven false.

I think so too.

There are good reasons to carry a balance. One of those happens to be paying for their money is cheaper than your time, or your own money.

Of course, if one cannot make that judgement, then the credit is probably then beyond ones means.

On the matter of the small business, it's possible to hold enough dollars to run for a time. Also possible to invest lots of time and be really stingy with liquid dollars. Both are hard options but both do largely mitigate credit.

I worked for a guy once that ran a very nice cash based business. Elegant. He simply re-invested regularly, waiting to grow or change until those necessary dollars were in the bank, plus his 6 months payroll.

The guy is still there, doing manufacturing despite most of his credit based peers being gone.

Hmmm....

My ability to use a credit card has helped me to endless degrees. Significant ones. Being able to carry a balance has also helped me. The goal is to pay it off as fast as possible. And I feel fine in the manner in which I am doing so. Wihtout that credit carried, our office would not have significant tools that we needed immediately.

The other choices would have been to " do wihtout " and that was an unneccessary risk to take. To say nothing of what a poor set of tools a staff needs to compete in many industries.

Plus, I get lots of miles for trips where I can use my credit card even more.

Another thing about credit , in my experience. I have always had credit cards, oh since I was about 21 or 22, I guess. And they were always used prudently, as I remember.

The one time it got somewhat out of control, and then it really wasnt that bad, was in the case of a divorce as I mentioned above. I used it mostly to PAY the damned Atty less the cash I could dig up monthy and still live paying my own bills and pay all the damned court ordered support including the Alimony crap , which is the part I really resented !

Cause when you use an Atty for a Bank, it doesnt work well. Their interest rates are astronomical and you dont get the SERVICE from your Atty if yor acct is in the rears. I was warned about that from a friend early on in my divorce.

So I used the bank to pay the Atty, so I could get it all over with and come out in some kind of decent position in the end.

There are all kinds of stories from the " Naked City".....

One of the wise moves my wife and I did was to go with a credit union some 18 years ago. Although I do use BOA for one of my businesses for a biz checking account only.

It's great reading these different stories on how each of us has had to deal with debt, credit cards and the like. The bottom line is you have found what is working for you.

Again I wasn't trying to come across as some saint, but I have learned from own personal experiences that debt is something we personally don't care for even if it may benefit us temporarily. It's kind of a dirty word around here.

Yep, the guy that says carrying balances on credit cards is bad is the nutty one!

Credit card debt should be shamed, something to NOT be proud of, and should be used only as a last resort. Not as a vehicle to acquire things you "have to have".

Charging the card and paying it off the next month to get miles is fine. That's the way a card should be used. However, the far majority of Americans do not follow this theory. They have balances on cards because they live beyond their means. People using credit cards for small business are a very small minority of card users. Most of them are your typical wage earning people who make purchases today with no plan to pay it back tomorrow. I've known people who make $100K per year, yet, have $75K balances on credit cards with 20% interest rates. So, it's not just poor people who carry balancess. Someone making $100K should have zero balances on their card.

Man, this thread is sounding like a bunch of Conservative financial managers...I like it!

... the government itself is the guiltiest party. America is now and has been under the shrub a debtor nation. The reason is the war on Iraq. Every one of the fiscal aberrations can be tied to the stinkin' war.

All this brouhaha is traceable to your statement about "living beyond one's means" if you carry a balance. You want to stand by that, that's OK. But it's not correct. Sorry. Sure, it's not desirable to carry a balance and sure, many Americans carry that balance for all the wrong reasons, but it does not now or has it ever meant that the owner of the balance is living beyond one's means. I truly understand where your coming from since you sound a lot like me 20 years ago. Just about the time Reaganomics was beginning to fail and it became necessary to raise the capital gains tax rates (1986), it became clear to me (fully employed in broadcasting at that time) that wages would not grow and entrepreneurship was the only option to get ahead. But that's another thread. Living beyond one's means, as discussed by you and others to this point, has solely focused on attributing said effect on consumerism (plasma tv's, vacations, etc) and the consumption of goods and services outside the real needs of the American worker. Little to no emphasis has been placed on (and I've tried) the diminished means with which the average American is faced with. Since the downturn in the economy has not touched some workers nor you, you seem disconnected from the fact that many people with mortgages normally covered by income and profits from investments have incurred additional debt just to make ends meet. Your blanket philosophy in an earlier post in this thread about how such people should sell their house, etc. etc. is quite draconian of a solution that is also reflection of your young age and relative inexperience in riding out Republican caused fiscal crises. Also your claim that "people using credit ... small business ... are a very small minority of card users" is not true. By the end of 2005 over 60% of credit card holders carried a balance. By now I am sure it's worse. Way worse. Please don't make statements with such qualitative definitives without quantitative evidence. Most of us are not talking about the small amount of credit abusers that you seem to think are the majority. It's just not the case and it makes you seem foolish. No one is arguing with you over the theory, but drastic mismanagement of the economy sometimes requires regular families to use less than desirable tactics to survive. It should come as no surprise to anyone that this situation has developed after 8 years of policies so favoring the wealthy rooted in a war we didn't need that has drained the value of the dollar, etc. Suze Orman fan, eh? She's just a talking head that doesn't want to deal with all the job losses and layoffs.
It's going to get worse. Many people have saved up 6 months or a years worth of cash to walk through bad times. What happens when it runs out? Well if we listen to Suze she'll dish out the same advice as to where to put your money, but if you aren't making any money her sound advice falls on deaf ears. The economy is losing jobs and many people just like YOU all of a sudden find themselves with diminished means, I doubt they or even you would make the kinds of comments you are now making. Hopefully this won't happen to you, but it already has happened to many. Thousands of qualified people are being laid off every month. Job growth is not happening. Take a look around and get your head out of the clouds. It will get worse before it gets better. We're all in this together. Don't forget that. Sound fiscal policy is great in theory, but in a capitalistic society with the jackals and vultures ready to pounce on the weak and indecisive, I'd rather charge my entire life until I'm out of credit before I'd let the wealthy profit from the misfortune and misery caused by the worst administration to ever run the country.

Andy-

How and what does Main Street have to do to get through this economy?

Bailout Math. And who knew that Ma and Pa had it figured out in 1954.

http://www.video.google.com/videoplay?docid=71065598467940444495

Do we all just drink Grape Kool Aid with KCN?

Or....get out of radio ...which many of us did..

"get out of radio"

Still haven't learned that lesson.