Debt Stories

[CHEESE2009]

What are some of the worst debt situations you have gotten yourself into? I don't buy a lot of big items often, but I do buy a lot of small things daily. Without realizing it, and also because I'm too ignorant to check and/or limit my spending... I find myself in these fun situations where I have to pay off some debt before it gets too big. So far I've always managed to pay it off, I've only been in debt for about a month maximum. The thrill isn't fun. This time, I just wiped my business account clean to pay off some personal debt, LMAO. I did this after I gave the government their tax money, I should have all the money back May 1st.

[lawnman3fl]

Lawn care business tips

i could go there but i wont at this given time but will tell my story soon enough though... all i can say it pace your spending on big price items as you need them key word here NEED THEM... put the want factor out of the picture when looking at big ticket equipment.. lawnman3 fl...

[Steve]

This post got me thinking about the best way to go about using credit cards or debit cards.

I tend to think credit cards are ok to use but a lot of people I know only use debit cards because they don't want to overspend and feel they would with a credit card.

Also, what do you think about using something like an American Express Card where you have to pay off the balance each month. Do you think using any of these different payment options actually help people stay on a budget or is it something a person just has to stay focused on and no card will help/hurt?

[CHEESE2009]

When it comes to using a debit card, money is withdrawn from an account. Unfortunately, there is always a high service fee each time you make a purchase.

Every time I would use my debit card, I could expect to pay $2.50 additionally.

As for a credit card, every time you use it you are borrowing money from the bank. When you apply for a credit card, the bank will allow you to borrow/use approximately $500, over time the bank may offer to raise your limit if you have a good track record at paying them back.

If you spend money you borrow from the bank (credit card), and you don't pay them back on time - instead of breaking your legs they will charge interest on the amount you owe to them, making it even more difficult to pay your debt off.

Example, if you spend $1,000 with your credit card and you don't pay the bank back on time, the bank probably charges somewhere around 19% on the amount you didn't pay off, and you would then have to pay $1,190.00! Let's say you are lucky, and you manage to pay off $500 of that debt by next month, you'd still end up paying $821.10 ($690 + 19%).

$1000 - $821.10 = $178.90

BASICALLY, you just WASTED $178.90.

-

Credit cards are AMAZING, but people (even myself) need to be cautious. Sometimes I get a little carried away or I'm 'feeling lucky'. lol... I say, only use your credit card for major purchases, and use cash for other crap (drinks, food, movies, etc).

No, I do not take my own advice..... LOL

[SECTLANDSCAPING]

I always been a cash man. Now this has helped me and hurt me. First off you cant spend more then you have. Its harder to hand over money then swipe a card. Your more likely not to spend on impulse because you see it leaving your pocket.

Credit cards have been good to me. I spend less then 20% of my limit and pay it in full 10 days later. I have never paid interest on a credit card. This also raised my credit.

Now the only reason I started to use credit cards was because I had no credit. I never borrowed anything. I knew one day I would want a mortgage and I already had cars/trucks. So I wasnt going to borrow for the sake of paying it back to build credit. So I started to pay for things that I wouldve bought with cash with credit.

Debit depends, my business account charges a fee for every deposit, withdrawal, check, etc. With my personal I only use my atms so I never pay a fee. I often ring up business expenses with my personal card because of the fees for the business account. Again I never had a overdraft fee or bounced check. To establish my credit more I used debit less.

[krzys666]

Originally Posted by CHEESE2009

When it comes to using a debit card, money is withdrawn from an account. Unfortunately, there is always a high service fee each time you make a purchase.

Every time I would use my debit card, I could expect to pay $2.50 additionally.

As for a credit card, every time you use it you are borrowing money from the bank. When you apply for a credit card, the bank will allow you to borrow/use approximately $500, over time the bank may offer to raise your limit if you have a good track record at paying them back.

If you spend money you borrow from the bank (credit card), and you don't pay them back on time - instead of breaking your legs they will charge interest on the amount you owe to them, making it even more difficult to pay your debt off.

Example, if you spend $1,000 with your credit card and you don't pay the bank back on time, the bank probably charges somewhere around 19% on the amount you didn't pay off, and you would then have to pay $1,190.00! Let's say you are lucky, and you manage to pay off $500 of that debt by next month, you'd still end up paying $821.10 ($690 + 19%).

$1000 - $821.10 = $178.90

BASICALLY, you just WASTED $178.90.

-

Credit cards are AMAZING, but people (even myself) need to be cautious. Sometimes I get a little carried away or I'm 'feeling lucky'. lol... I say, only use your credit card for major purchases, and use cash for other crap (drinks, food, movies, etc).

No, I do not take my own advice..... LOL

you got your math wrong. it is 19% for the year not month.
you would pay 190 extra if you paid the 1000 off in 12 months

[Steve]

Are there times when you come across an opportunity where you could make some good money if you spent a little to be able to perform it?

For instance, what if you land a larger mowing account that really needs a larger mower. If you can't afford to pay cash for it, is it ever worthwhile to buy it on a credit card because you know you will be making a lot more with the mower than without?

[SECTLANDSCAPING]

Originally Posted by Steve

Are there times when you come across an opportunity where you could make some good money if you spent a little to be able to perform it?

For instance, what if you land a larger mowing account that really needs a larger mower. If you can't afford to pay cash for it, is it ever worthwhile to buy it on a credit card because you know you will be making a lot more with the mower than without?

you could use a business credit line. Hopefully your first payment covers the balance because interest is high.