When did it become cool use a Credit Card/Overdraft irrisponsibly?

DervProf

ILW wrote: »

Many of the most heavily indebted, are seeing quite signifcant rises in their living standards due to the ultra low interest rates.
Seems those that did not run up large debts are the fools.

I'm not so sure that people who didn't run up large debts are, or were foolish.

Out of these two scenarios, I know which I'd prefer to be in.

1. Ran up large debt (mortgage and credit card etc) in the "boom", low mortgage rate now, but drop in income due to change of job or unemployment.

2. Ran up little or no debt and has now had a drop in income due to change of job or unemployment.

Of course, there will be those who's incomes haven't suffered, and have now got a low mortgage rate. They may feel that they've done well, but high(er) inflation will be lowering their standard of living as much as someone with no debt.

My concern is what message does the current economic situation send out, "run up large debts and you'll be helped by low interest rates" ?

BobQ

quantic wrote: »

I hear people bragging about using their Credit Card and Overdraft a lot these days. If you search Twitter for the words, "Overdraft" or "Credit Card", its shocking how many people seem to have the attitude that this is a cool thing to be doing. I can't be the only person who finds this quite scary?

Literally, thousands of people, all over the world, bragging about how financially illiterate they are.

When did this happen? Or perhaps a better question is why and how do we educate against it?

I think the irresponsible behaviour became more commonplace in the mid 1980s. Before that credit was largely obtained by bank loans and hire purchase which were usually to buy specific things, not a revolving open ended credit arrangement. In the 60s and 70s most people were reluctant to accept credit and felt almost guilty about having it. Credit Cards less common and those that had them used them more responsibly as a charge card or for flexible short term credit.

I doubt there was one time when irresponsibility happened. Its was a bit like a virus that infected the weakest and progressively spread amongst those vulnerable to it. By the late 1980s it was increasingly fashionable to have a credit card and not always pay off the credit balance, a problem that continued throughout the decade.

hillcats

Credit cards are fine if managed properly, we pay for 99% of our monthly expenses on a Tesco CC and always repay in full every month and get maximum benefit of the points received & maximum benefit of the money offsetting our mortgage for longer. (Explained below)

Once a credit card transaction has been made the money is then moved the same day from our offset current account into an offset savings account only used for the credit card funds, the credit card bill is then paid in full every month from money already collected in this account. Before ANY purchase is made, we consider if we can afford the purchase by seeing if the money is available in the current account, if not then we cant afford it that month...

Correct controlled money management is the answer!

Loughton_Monkey

quantic wrote: »

Perhaps I should have clarified that I meant, when did it become cool to use a Credit Card or Overdraft irresponsibly (to buy crap people don't even need)?

Agreed.

I have used credit cards since 1973, so next year will see the 50th anniversary of my original 'Barclaycard' account. The 'statement' used to consist of a pile of some sort of punched card counterfoil, with a note of what you owe. I've had many more in between, and don't use Barclaycard much because of cashback and Air Miles received on others.

I'd suggest that 'cool' is the last word I would use to describe why I use them. I call it 'sensible' since I get 'freebies', consumer protection, free credit, convenience, and good records out of them. Apart from a handful of times when I have accidentally paid a day or two late, I have never paid interest. I checked my accounts and they tell me I have spent precisely £589,951.44 on credit cards in my lifetime so far.

This figure, I calculated, is almost identical to the debt one would build up on a 1700% payday loan of £100 that you refused to pay and let roll up for three years.

Give 1,000 people a free knife, and 900 people will use it sensibly to slice their bread or whatever. The other 100 might choose to stab themselves with it. This would not be the knife's fault, it is the [lack of] brains of the owner that is the issue.

The availablity of such credit is simply nature's evolutionary way of ensuring that financial idiots remain in 'poverty' where they belong.

matbe

Loughton_Monkey wrote: »

Agreed.

I have used credit cards since 1973, so next year will see the 50th anniversary of my original 'Barclaycard' account. The 'statement' used to consist of a pile of some sort of punched card counterfoil, with a note of what you owe. I've had many more in between, and don't use Barclaycard much because of cashback and Air Miles received on others.

I'd suggest that 'cool' is the last word I would use to describe why I use them. I call it 'sensible' since I get 'freebies', consumer protection, free credit, convenience, and good records out of them. Apart from a handful of times when I have accidentally paid a day or two late, I have never paid interest. I checked my accounts and they tell me I have spent precisely £589,951.44 on credit cards in my lifetime so far.

This figure, I calculated, is almost identical to the debt one would build up on a 1700% payday loan of £100 that you refused to pay and let roll up for three years.

Give 1,000 people a free knife, and 900 people will use it sensibly to slice their bread or whatever. The other 100 might choose to stab themselves with it. This would not be the knife's fault, it is the [lack of] brains of the owner that is the issue.

The availablity of such credit is simply nature's evolutionary way of ensuring that financial idiots remain in 'poverty' where they belong.

Think you need to go back and rewrite that?

I just looked and thought christ i was born in 69 im not over 50 am i?

Then realised no not yet this !!!!!! cant count thank f..k!!!

matbe

matbe wrote: »

Think you need to go back and rewrite that?

I just looked and thought christ i was born in 69 im not over 50 am i?

Then realised no not yet this !!!!!! cant count thank f..k!!!

You know how much to the penny you spent on cc but cant add 50 to 73?

Your right the level of mathematical stupidity knows no bounds.

Generali

quantic wrote: »

Literally, thousands of people, all over the world, bragging about how financially illiterate they are.

When did this happen? Or perhaps a better question is why and how do we educate against it?

The thing I find amazing is that it's 'funny' to run up a credit card debt behind your other half's back, especially behind your husband's back. When did that become a part of popular culture?

oldvicar

Loughton_Monkey wrote: »

....

Give 1,000 people a free knife, and 900 people will use it sensibly to slice their bread or whatever. The other 100 might choose to stab themselves with it. This would not be the knife's fault, it is the [lack of] brains of the owner that is the issue.

The availablity of such credit is simply nature's evolutionary way of ensuring that financial idiots remain in 'poverty' where they belong.

Those 100 poor unfortunates were mis-sold (for nothing so call it mis-gifted) the knives. They should have been given sliced bread instead.

Rather than let them languish in 'poverty', the modern way is to give them 'compo' to put them back in the position they should have been in (plus interest at 8% p.a.).

This means that those 100 poor unfortunates should now be given a fresh sliced loaf, plus a couple of extra slices 'interest'. Say 120% of a loaf overall.

To provide this, you simply require the other 900 to (a) use their knives correctly to slice their bread and (b) take a few slices from them. Take a ninth of their loaf to pay the compo, and a slice to pay the compo 'interest' and they are left with approximately 85% of a loaf.

The end result: The good guys have 85% of a fair share, and the idiots get 120%.

....

But hang on a minute. The idiots are too stupid to claim compo themselves, so they use a specialist claims company, who take 25% of their (120% of a loaf) award.

So the good guys have 85% and the idiots 90% of a fair share. They are all a bit hungry, but the claims companies have loads of bread.

That's the modern way.

......


Of course in olden times (about 2000 years ago to be precise) if you gave a REALLY good guy 5 little loaves and a couple of fishes, you could feed five thousand (Mark Chapter 6 verses 30 to 44)

CKhalvashi

I've got an Avios (AmEx) that has about £20k a month through it (most of which is for work).

Whilst I don't 'live above my means' as such, OD is very occasionally used for short-term spending and credit cards (also got HSBC Premier Mastercard) are used for most purchases (I think my AmEx one had 4 tanks of fuel, weekly shop, cash and carry and payment to Savills for bar put through yesterday alone).

CK

catwoman73

Not sure if use of credit is cool or not, but it certainly seems the 'norm'.

At work our company car system has recently changed and got so expensive that its not really worth it and there's lots of people panicking because they're either unable to afford the increased payments or they can't afford to buy their own car, which is the alternative. I went out and bought a very good value 4 year old car (7k for a car slightly better than my old company car that the lease company wanted 11k for) and have had to keep quiet about buying it with cash because being able to do this is considered so unusual! (Can't think what they'd say if they knew I still had over £20k in savings after the car purchase).

This is amongst people on £30-60k per year so not exactly paupers either.