September 12, 2007

Which do you think toxic mortgage homedebtors would choose to keep first - their MasterCard or their house? Welcome to crazy land folks


Those zero-down liar's loan failed housing gamblers sure are a funny bunch. Too bad for the bag-holders and too bad for anyone who thought 2005 home values were anywhere near reality.

Debt-Laden Homeowners Save the Credit Card Before the House
NEW YORK (AP) -- Conventional wisdom has it that people will do everything to keep their homes. Not any more.

The proliferation of no-money-down home loans over the past few years, coupled with the current housing downturn, is giving rise to a new mentality: People will risk losing their homes while doing everything to keep their credit cards.

"This is the biggest surprise we're seeing," said Elizabeth Schomburg, senior vice president of the Family Credit Counseling Service in Chicago. "People are actually coming to us with situations where they are current on their credit cards but are in foreclosure."

66 comments:

borkafatty said...

I would say the card....gotta have more things from Walmart...

Anonymous said...

This makes no sense.

When they lose their house to forclosure the credit card companies will see that on the credit report and either.

A) Jack the interest rate up to the default of 18-29%

B) Lower their credit limit and not renew their account when it expires.

C)Terminate the account

D) All or some combination of the above.


Don't people realize the credit card companies will tool around with your account based on your payment history with others also?

keith said...

All they know is that without credit cards they can't do what's really important in life

Go to the mall

Mark in San Diego said...

Big Jim Cramer said that - Keep the credit card, make your car payment because you need to drive to your job, and WALK AWAY from your home.. . .sound advice I would say.

Joe said...

If you don't have any equity in your home, that's actually a pretty smart thing to do. No sense digging yourself into a deeper hole. When someone buys a house with 0% down, there is very little upside to preventing foreclosure when they get in trouble.

LauraV said...

Between the two evils, I would have to chose the credit card...

Afterall, you can't eat your house.

Anonymous said...

makes sense to me...with $0 down they lose nothing by walking away from a house

Anonymous said...

wasn't that Cramers advice, walk away from your house but keep your credit card so you can go to work?

Anonymous said...

Some issuers will actually like this situation. Here's why. By adding a foreclosure to the card holder report, applications from this debtor for new credit will nearly immediately go into the turn down file by anyone reviewing them for a new loan or account for the next several years. Those banks that hold exisiting accounts will have a "customer for life" that can be managed for maximum profit with no real outside competition for the debtor's business. Some of these arrangements are very lucrative for the lender because they can pretty much dictate their terms (up to the limit of the law)and the only thing standing between the borrower and the terms will the borrower's own level of self - control (which is nearly nada - afterall, they ARE sub-prime).

Smug Bastard

mrmx said...

Cramer told people the right thing, "mail in the keys and save your credit cards." The worst thing you can do is take cash advances, via your credit card, in an effort to patch up a sinking ship!

Edgar said...

The house quit spitting out money last year, the credit cards still work. It's a no-brainer.

panicearly said...

they cant buy gas, and they cant eat without credit cards. they know the house is gone already.

christiangustafson said...

COSTCO only accepts cash equivalents, not credit cards. I wonder how they will do compared to their competitors.

Anonymous said...

christiangustafson said...
COSTCO only accepts cash equivalents, not credit cards. I wonder how they will do compared to their competitors.

September 12, 2007 2:13 PM


=============

Sam's Club accepts Discover and MasterCard now. Smart move on their part. Yeah they have to pay 2-3% to the card, but I'll bet they will more than make that up in people buying more.

Costco will follow soon enough I'm sure.

Anonymous said...

christiangustafson said...
COSTCO only accepts cash equivalents, not credit cards. I wonder how they will do compared to their competitors.

September 12, 2007 2:13 PM
-----------
The do accept AMEX, a CC that also lets you make mortgage payments on your CC account!!

Anonymous said...

Target, Walmart, Sam's Club, BJ, Shaws, and soon Costco will all be taking CCs.

And pretty much, that's all a family needs to survive, day to day.

There's absolutely nothing a house can do for anyone, given the lack of home equity and collapsing prices. What a reversal from 2004 where homeownership trumped everything else in life (including survival).

Stuck in So Pa said...

No house, no problem. You can live out of your car. Credit card for gas, food, Starbucks, etc., get $20-40 cash back every time you make a grocery purchase for those places that want cash, like a laundromat to wash your clothes. Of course you will be totally at the mercy of the credit card company, but Hey!, that's what being a debt slave is all about!

Anonymous said...

Keep the cc. They can move back in with Mom if they really have to. However, keeping the cc allows the consumer to keep up their precious image by continuing to shop at the mall and Starbucks etc...

Anonymous said...

costco takes Amex, which traditionally was a net-30 type card, now amex has all kinds of minimum payment, APR type accounts.

Anonymous said...

But I need the credit card to buy the talking Elvis head for Christmas.

http://tinyurl.com/2smnro

.
.
.

Anonymous said...

The general default clause is an @ss kicker-- I'm surprised genious Cramer didn't take that into account.

Anonymous 9/12/07 1:19 is correct. Only this would happen long before an F'B goes into foreclosure. While our FB is still in denial, he would be applying for mortgage refis all over town, maxing out his existing credit lines, not paying down his Neg Am Mtg, and opening new lines with last chance lenders like HSBC. As all of us HPers know (and our FB does not), the above actions are worse for your credit than late payments. His FICO drops to 520, and then Capital One reduces or freezes his limit--- about a year sooner than he was planning on it. What's in your wallet?

Anonymous said...

I'm not sure why the MSM finds this surprising. Do they expect people to pay for their morgate with their credit cards? At 25% INTEREST!!!

I mean... at the end of the month - you get your paycheck and you can either put money into you ARM or credit card. Paying off the credit card is actually alot better since the interest rate is alot higher...

devestment said...

Greetings,
Need cash to make your minimum payment? Please remember me when selling random chattel at pennies on the dollar.

Signed Devestment,
Buyer of used escapist crap.

Anonymous said...

Hmm...do debtors have any choice? Anyone interested in Cartier watches and Jimmy Choo shoes for pennies on the dollar? Ahhh, the American way, looking more and more like a third world country:


Developer Juan Puig lived the high life during the housing boom: A Gables Estates waterfront mansion, a condo near Aspen. A fleet of 10 luxury cars, including a 1966 Ferrari and 1969 DeTomaso Mangusta. A 59-foot Ferretti yacht. More than 70 pieces of art. A gold Cartier watch with diamonds. Extensive wine collection. Welsh Hunter pony.

But now he and his wife must give it all back.

Puig, who became rich buying rental apartments and converting them into condominiums, has to auction off his pricey possessions to help repay more than $100 million in debts to his companies' creditors.

The bankruptcy of Puig's Hialeah-based companies is the biggest yet to come out of the slumping housing market. In May Puig's companies sought court protection from creditors, saying it was overextended with some 26 condo conversion projects across the state. In July, creditors forced Puig himself, and his wife Diana, into personal bankruptcy.

Puig's settlement with creditors amounts to a virtual wipeout of the formerly high-flying real estate executive and his wife. Not just artwork and luxury automobiles will be auctioned off but smaller items -- their furniture, Diana Puig's Jimmy Choo purses, their karaoke machine and some 68 pairs of pants. They get to keep their wedding rings.

Anonymous said...

COSTCO only accepts cash equivalents, not credit cards.

I've been using my Amex at Costco for many years. It's the ONLY cc that Costco accepts. They even have an Amex/Costco credit card.

As far as paying mortgage with cc, I love it. It makes sense to collect a gazillion rewards while paying the cc bill in full every month. So far this year I got 2 free air tickets to anywhere in the US or Canada, many Coach handbags for my wife, DVDs at BestBuy...all free, paid with rewards. For instance, you can get a $100 certificates by collecting rewards then buy a gazillion DVDs or CDs at BestBuy, since those items are Loss Leaders. Haven't had to pay for DVDs, CDs, or bday or xmas gifts for years by just using rewards collected from paying living and job expenses with credit cards.

Got to know how to play the rigged system we live in. I smile when I see people paying everything with debt cards or cash, renting DVDs from Blockbuster or Netflix, paying for b-day gifts, etc. They could be collecting tons of free goods, if they had the discipline of controlling cash flow and paying off the cc bill in full every month. Some wannabes here think that it's not much money saved, but I have one question to them: Would you pick up a $20 or $100 bill found on the sidewalk? I rest my case.

Anonymous said...

No house, no problem. You can live out of your car.

It's a growing trend in America, which is illegal and hard to pull it off in some areas, as this very interesting article from the NY Times attests:


Keeping It Secret as the Family Car Becomes a Home

FAIRFAX, Va. — After being evicted from his apartment last year, Larry Chaney lived in his car for five months in Erie, Pa. As he passed the time at local cafes, he always put a ring of old house keys and several envelopes with bills on the table to give the impression that he had a home like everyone else.

While Michelle Kennedy was living in her car with her three children in Belfast, Me., she parked someplace different each night so no one would notice them, and she instructed the children to tell anyone who asked that they were "staying with friends."

Last year, William R. Alford started keeping a car cover over the station wagon where he sleeps. "I originally just had drapes, but the condensation on the inside of the windows was a dead giveaway," said Mr. Alford, who has been homeless here in Fairfax since May 2005.

As with all homeless people, finding food, warmth and a place to clean up is a constant struggle. But for those who live in their cars, remaining inconspicuous is its own challenge, and though living this way is illegal in most places, experts and advocates believe it is a growing trend.

"It's most often the working poor who find themselves in this situation, teetering on the border between the possessed and the dispossessed," said Kim Hopper, a researcher on homelessness for the Nathan S. Kline Institute for Psychiatric Research, which is based in New York.

The number of "mobile homeless," as they are often called, tends to climb whenever the cost of housing outpaces wages, Dr. Hopper said. Last year was the first year on record, according to an annual study conducted by the National Low Income Housing Coalition, that a full-time worker at minimum wage could not afford a one-bedroom apartment anywhere in the country at average market rates.


http://tinyurl.com/2llnrx

Anonymous said...

I never undesrstand this hatred of credit cards. I use a cc for 99% of purchases. I pay my utilities with a cc. I bought my last 3 cars on a cc too.

I either pay it off every month or if it is a 0% card, I pay the minimum for the 0% time and then pay off the balance.

I get cashback money and frequen flier miles as well as interest free money.

Anyone NOT using credit cards and pays in cash is a sucker.

Anonymous said...

Now that all of the McMansion ATMs have been closed down,
hail to the Credit Card Gods
Plastic is King, Concrete is Dead

Anonymous said...

The McMansion may be shrinking.

With the nation's housing market in a slump and the mortgage market in disarray, many home builders are putting up fewer supersize homes and offering smaller floor plans. That seems to be what buyers suddenly want in an era of high prices and tougher financing.

"Financing has tightened down so much that many people aren't able to qualify for the larger houses," said Kathryn Boyce, an account executive in Northern California for Boston-based real-estate research firm Hanley Wood Market Intelligence. "Throughout the U.S. people can't afford what they previously did. Floor plans are going to get smaller."

pwnd

Anonymous said...

They've accepted they are going to lose the house. So running up the credit cards would not help them, it would only delay the inevitable.

They'll still lose the house and keeping space on the CC's will be vital to getting set up in where ever they end up post house.

Bakersfield Bubble said...

FBI RAID ON CRISP AND COLE OFFICES RIGHT NOW!!!

stuckinthecity said...

The proliferation of no-money-down home loans over the past few years, coupled with the current housing downturn, is giving rise to a new mentality: People will risk losing their homes while doing everything to keep their credit cards.
---------------

people put food and beer on cc's. screw the falling value of a home they have nothing invest into!

Anonymous said...

The do accept AMEX, a CC that also lets you make mortgage payments on your CC account!!

----------------------------------

cool. Let the CC max out and then roll it into a Refi...... Thats the ticket, let the house pay for itself......

k.w. - southern ca. said...

The people who put some "skin in the game (perhaps some meat as well)", are in a much tougher position - because they have something to loose.

Although I agree housing prices have stopped making sense for a long time, we should have never allowed people to take on a house mortgage without some initial down-payment.

Batman said...

This is actually a reassuring sign of intelligence. Are the homedebtors with no collateral realizing they have no incentive to pay off the house? Great.

It would be too funny if the parasites with the red suspenders trading bullshit CDOs and other jacked up paper actually had to wear some of the damage they've caused.

Frank@NeverColdCall.com said...

Ohh but what ever would the Scottsdale phonies do without their credit cards? They can just rent a house and lie to everyone and claim to own it (I've met several who have been doing that all along). But then again, fat chance getting a lease approved with a foreclosure on your credit, landlords are getting really anal now that the credit crash is in full swing.

Anonymous said...

http://www.businessweek.com/ap/financialnews/D8RK22JO0.htm

CFC employees failed to study Enron and put too much of their 401k funds into company stock, while the CEO was cashing out!!

Must post Keith!!

Anonymous said...

what up renting fools? hear about the latest bailout proposal from your liberal demoRATS in Congress?

Raise FHA limits to $500K with $0 down. Ha ha ha. This gets better and better.

Hope you like your 1 bed shithole, you will be there forever.

Anonymous said...

k.w. - southern ca. said...
The people who put some "skin in the game (perhaps some meat as well)", are in a much tougher position - because they have something to loose.


==========================

No they lave something to LOSE Cletus. Anyone who can't figure out the difference between lose and loose should not be giving others advice.

Happy Homedebtor said...

I must be missing something.

Bought our brand new home in March w/ 0% down. Watching as our principle goes down about 2% by the end of the first year.

Just did some initial landscaping in the backyard (5 trees), waiting on approval for the first step on the front yard (1 Yoshino to frame the house, 2 Shinabas to accent the driveway).

Picking out colors to paint the main floor.

Paying off our only CC that has interest in a week or 2.

Paying off the 0% debts as they come due (Home Depot and Havertys) so we don't pay any interest.

Putting max for matching in our 401Ks.

Maxed out the wife's IRA for this year, mine will be done by Dec. Setting them to auto-fill from direct-deposits next year to max out.

Starting in January, we're saving about $1500/mo in cash AFTER filling the 401Ks with about 15k/year and the IRAs w/ 10K/year.

Having a blast in our house.

I'm 30, she's 26, no kids, not moving for at least 6 years, probably closer to 10 (before the kids hit school-age).

She just started her career this year, when I finish gradschool my salary will go up 20-100% within 3 years.

My car is an '05, hers is an '07.

...yeah, I'm screwed. :P

Wishing negativity/bad things on others because they're doing/accomplishing something you're not is a tell-tale indicator of a nasty jealousy streak.

Smash Bros Brawl release-party at our house on our 73" Mitsubishi DLP in Dec in our monstrous entertainment-room! ;)

Anon said...

According to Maxed Out, defaulting on a mortgage makes a debtor even more attractive to the gredit card companies.

They have a taste for debt

TM said...

Anyone NOT using credit cards and pays in cash is a sucker.

I agree. Not only can you get cash back on your purchases, but you get free "float". Your cash can sit in the bank a month longer and earn more interest before the bill comes due. It's just a matter of having the sense to pay it off each month.

As for people saving their cards while letting the house go, that makes perfect sense. They're so strapped that the credit cards are all that's saving them from empty stomachs and empty gas tanks.

Anonymous said...

People should refinance their homes and take out all the equity and invest that money in high yielding instruments.


Banks are more likely to foreclose on a property that is closer to being paid off than for homes that have no equity.


So, while the re-mortgaged home is busily building new equity as the value of residential property continues its unparalleled depreciation, the money stripped out will be generating a whole new stream of capital appreciation and income, which will, so the theory goes, cover the increased payments on a new mortgage or home equity loan or a new Hummer.

Not necessarily a bad idea aye?

devestment said...

The things I like about credit cards are they leave a data trail everywhere I go and there is no need to think about purchases. Heck, it doesn’t even feel like I’m spending money. Just keep every receipt you get to be sure you are not being overcharged, send in the check, and you're done. The best part is the status of the card, it says "I'm credit worthy and have minty fresh breath". As for rewards, most of them are around $300 a year and very restricted, I have craps more interesting than that.

Anonymous said...

Anonymous said...
what up renting fools? hear about the latest bailout proposal from your liberal demoRATS in Congress?

Raise FHA limits to $500K with $0 down. Ha ha ha. This gets better and better.

Hope you like your 1 bed shithole, you will be there forever.

September 12, 2007 7:07 PM
---------------
Don't worry delirium is just the final symptom of the contagion before you lose conciousness & expire.

You just happen to be one of the last trolls infected, must not have drank enough kool aid to be hit as quickly as the others.

Anonymous said...

I'm not sure why the MSM finds this surprising. Do they expect people to pay for their mortgage with their credit cards? At 25% INTEREST!!!

Some actually did. I remember hearing about it from various news items. They'd refi cash-out to pay off their credit cards, then pay off the new mortgage with the credit cards, then refi cash-out to pay off the credit cards, then pay off the new mortgage with the credit cards, then refi cash-out...

After all, house prices had nowhere to go but UP! UP! UP!

(And after all, there's an election year coming up? Can you say "bailout"? "SAVE US, NANNY HIWWAWY!")

Bob Reno said...

>>Happy Homedebtor said...
I must be missing something.

Bought our brand new home in March w/ 0% down. Watching as our principle goes down about 2% by the end of the first year.

(blah, blah, blah)

She just started her career this year, when I finish gradschool my salary will go up 20-100% within 3 years.

My car is an '05, hers is an '07.

...yeah, I'm screwed. :P<<

Happy:

I know this scenario has NEVER happened to anyone, but let's say--hypothetically now--your wife's boss calls her into his office tomorrow and says they're laying off everyone with less than 5 years seniority to cut costs because sales are down 15% because no one is using their homes like an ATM anymore. I know it would never, ever happen to someone as good as what she does as she is, but just play along, okay?
But you can quit grad school and find a job, right? And you find a really good one . . . 500 miles away.
So the little wife stays in your money pit and works at the Wal-Mart ('cause you won't be able to sell it for what you owe) while you live in an apartment during the week and commute home every other weekend.

Enjoy the 73" TV until the repo man shows up!

Anonymous said...

fat chance getting a lease approved with a foreclosure on your credit, landlords are getting really anal now

Not around here in the Bay Area. The big dumb property companies who bought buildings with debt at the height of the property bubble are anal, but they're also going to go broke since the rent they're demanding doesn't match the actual earning power.

Most landlords are getting desperate for tenants -- any tenant. As foreclosures soar, jobs collapse, and more and more people move out of the area, the glut of new apartments built in the area, along with conversions of condos to apartments, are keeping supply high even as demand slips.

Most of the bankrupt FBs won't have a problem renting somewhere. It might not be in a luxury building, but that's life. Landlords have to rent to SOMEONE, and 700 credit score middle-class wage-slave renters are going to be impossible to find (and coveted).

Anonymous said...

No question you gotta keep the credit card and if you can play the transfer the balance to a new card every six months game you may not have to pay any interest.

The FBs are going to have to keep track of which credit cards they already transferred a balance so they don't imbarras themselves. This is the new FB financial plan.

Anonymous said...

'Anyone NOT using credit cards and pays in cash is a sucker.

I agree. Not only can you get cash back on your purchases, but you get free "float". '

Fellows, here's what you're forgetting, you're using your credit card as a charge card. That's not the same as the typical consumer who needs the CC to carry 'em over for a few months (or years). So yes, for things like free upgrades to business class and other misc dividend things like discounted stereo/automobile widgets, absolutely, use the CC as a charge card and take home a bonus but realize, you're not really using a credit card in the truest sense of the word because effectively, you could have paid for it, using cash, if you were near an ATM machine.

Personally, I like flying business class, to Asia or Europe, on vacation so it's CC all the way for me.

TM said...

The things I like about credit cards are they leave a data trail everywhere I go and there is no need to think about purchases. Heck, it doesn’t even feel like I’m spending money.

There's a good point in that sarcasm. Successful use of credit cards requires, more than discipline, an ability to see credit purchases as real money transactions.

I suppose this precludes the people who gleefully signed obligations for many hundreds of thousands of dollars at ballooning interest rates.

Joe said...

@Happy Homedebtor

You seem pretty obnoxious, but even so I don't think most people wish you ill. Obviously you can save money, and you're not living outside your means. As for all the stuff you own: nobody cares. Enjoy your TV.

Anonymous said...

Hey... I am a FB.. with a 820 credit score.. Got a great job transfer and am trying to sell my house in KY. I bought on a 80/20 and stupid me, put 30k into it with upgrades and figured I'd get a 2-3% appreciation on it year to year plus a tiny amount back in the upgrades.

House has been on market for 45 days and there is a glut. I dropped my price from 300k to 285k. I bought it in 05' for 281k... I think I am going to have to short sell.

I just want to dump the house asap and don't expect to foreclose but you know I've often wondered (Iknow it's crazy talk here) why not.. I am going to lose money either way.. why not take that 3k I am wasting on the house I don't live in and invest it and then pay cash for my next house.

I am renting a gorgeous house in Orlando for 1400 Per month..

What would you do? I am first just trying to short sell.

I hate credit cards but have them but only 1 with balance that will get paid off when I get my commissions check.

the other trader said...

I cannot believe this stat.

Most homeforeclosures are maxed out AND delinquent on their CC's.
Look at the numbers!!!

It IS spilling over into ALL credit.

Saw A HUGE line waiting at an A.T.M. at the beach last weekend.
Longer line than I have ever seen. I am trying to put that together right now???

I do know that my CC companies have been sending me, what is the phrase, "change in terms"?
Wonder what THAT is about.

Remember, find the companies/FUNDS with "OFF-SHEET BALANCES", and you will find the end losers.
That wouldn't happen to be the PUBLIC PENSION FUNDS NOW, WOULD IT?

We are still trying to price something that does not have bids, so they start raising "incentives".
take this 10 BILLION in debt, and we will loan you 50 Billion to do so, with INCREDIBLE terms and conditions attached.
(More madmen dealings).
This will warp the numbers and "create a false illusion" of what the "real market price" would be.

But don't worry, due to the debt created to COMPENSATE the risk, our worth is just a little less (Americans).

That is all I have to say about that...

Anonymous said...

'm 30, she's 26, no kids, not moving for at least 6 years, probably closer to 10 (before the kids hit school-age).

She just started her career this year, when I finish gradschool my salary will go up 20-100% within 3 years.

My car is an '05, hers is an '07.

...yeah, I'm screwed.


You both are too young to fully grasp the concept of "SHIT HAPPENS". With that attitude and the way this country is heading, one day you certainly will, no doubt.

Anonymous said...

As for rewards, most of them are around $300 a year and very restricted, I have craps more interesting than that.

You have crappy cards then, because I have been collecting more than $2,000 in rewards + other goods. For instance, one of my cards offered two free tickets if I charged only $1,000 for two months in a row. I'm using those free tickets for a ski trip to Canada. My wife charges another ton of money for her company's expenses on her cards to collect rewards. Her company reimburses her every month, while she collects free store certificates to buy clothes, cosmetics, vacations, etc. ALL FREE!

I also like the VIP service of some of my cards such as getting VIP table at the Blue Note in NYC to watch a jazz concert up close. Other cards offer access to a network of airport lounges around the world, which I enjoy very much. I don't like to mingle with the commoners while waiting for a plane. bwahahahaha...I couldn't resist to imitate George Costanza.

Anonymous said...

Bought our brand new home in March w/ 0% down. Watching as our principle goes down about 2% by the end of the first year.

She just started her career this year, when I finish gradschool

Smash Bros Brawl release-party at our house on our 73" Mitsubishi DLP in Dec in our monstrous entertainment-room!


Alex Trebek, I take "douchebags who do stupid financial moves" for a thousand, please.

Anonymous said...

"Hope you like your 1 bed shithole, you will be there forever."

Have to be specific on who you are referring to. In my case, the people I know who still rent are saving a mountain of cash; because they can. When the time is right and the prices are way down, they are going to cut a check and live mortgage free.

Renting (even a "shithole") is a strategy for some.

Anonymous said...

"Hey... I am a FB.. with a 820 credit score.. Got a great job transfer and am trying to sell my house in KY."

"House has been on market for 45 days and there is a glut. I dropped my price from 300k to 285k."

"What would you do?"
-----------------
Got matches?

Happy homedebtor said...

bob reno said: "Enjoy the 73" TV until the repo man shows up!"

Right...because clearly, she's the sole bread winner. Oh wait, I work full time and go to school full-time...damn, shoot yourself in the foot lately SLACKER?

You're right, because even though she's one of 20 people they've hired into her dept since June, they're still grossly understaffed at the hospital in that department...damn, shoot yourself in the foot lately UNEDUCATED SLACKER?

Just because you either didn't go to school, or stopped after a single time through undergrad, and didn't see the big picture, don't hate. ;)

Or maybe you just suck @ Smash Bros and are bitter Pikachu cheesed ya? :P

Yes, I'm obnoxious - but given the bile being spewed here, manners are lost, no? ;)

The common Man said...

I don't like to mingle with the commoners while waiting for a plane.

Being self employed and supporting a family of three while saving more than most people make is all the separation from commoners I require.

Breathe strong airline traveler, inhale deep the airborne microbial commoner spore.

Daphne64 said...

Happy Homedebtor:

If you are truly on good financial footing, then either:

your wife must have a VERY good salary (60k +) and you live in a low cost part of the country, or
Your wife has an extremely good salary (100k+) in a more expensive part of the country.

Even so, babies happen unexpectedly, and layoffs/salary cuts happen.

I am guessing though, that you are not on such good footing.

A couple of hints - you are paying off the only card WITH INTEREST this month. How much do you have on the 0% teaser rate cards? And how much on the home depot type accounts?

And, of course, the big question: is your home loan a fixed rate one or an ARM?

Lastly, what's the point of a 73" TV?? Anything over about 32"-37" is just too big for a standard room. The very fact you have splurged for such a monstrosity without having the ability to pay off all your bills in full (except the house) is a strong sign you will be in trouble before too much longer.

Daphne64 said...

Happy Homedebtor:
Just realized you implied you are working as well as your wife.

That makes it a little more likely you are on OK footing for the time being, but makes it almost certain you will be hurting financially if/when a baby comes ... or if the divorce lawyer comes ... or, heaven forbid, both come.

We've got two kids and are paying 800 a month for daycare for a toddler (and that's below the going rate), plus $500 for a church affiliated school for the older one - ouch!

A lot of young folks have no idea how hard it is to both work full time jobs with a baby. You are always having to ask - "which one of us gets to sleep all night tonight?" Our toddler is 20 months old, and we still ask that!

By the way - kids are good at trashing anything you have that's nice. We sold our 32" high def TV when the toddler showed a love of pounding on it with a pen. I could go on ...

Anonymous said...

But remember, cards do leave a "trail" and that trail is used to manipulate the consumer. They know everything you buy. They overcharge random amounts on purpose, even after you call and have these "merchant mistakes?" fixed. Hope you check your statement down to the pennies.
There is a reason they give those rewards... ever think about them for awhile??????

Anonymous said...

Actually this makes perfect sense under the new bankruptcy laws. Can't shed the credit card debt without paying (much of) it if you make any money at all. It's not like these people are paupers. And they can't save the house through bankruptcy because they won't qualify one way or another. Let the bank have the house and hang on to the credit cards; it really is a pain going without one.

Anonymous said...

TO "HAPPY HOMEDEBTOR"

Hey Dude! You don't get it!!

This is a once in a lifetime, systemic, generational and huge REAL ESTATE CRASH just starting!

I can't wait to see your post in January of 2009 when your $550,000-750,000 0% is worth $295,000 and you get a new job offer in another state!

WHAT THEN?? BONZO?

Everybody else, stay tuned - this is gonna be a lot of fun for the real young and stupid neophytes out there that are still buying!!!!!!!!!