Economic conditions on the backside of Forbearance

[The Heretic]

I feel like I'm almost looking in a financial mirror talking with you.

I've never felt the need to spend, spend, spend. But, I do like having ~90k in unsecured debt available to me at this point in my life. If S is going to HTF, I'll be making some big purchases ;-).

That or I may run it out closer to end of life for one last wild ride. Not sure yet.

I just bought a half case of .308 on my CC (the thread about BGCs for ammo got me off my bubblegum to finally buy some). I sold a bunch of ammo too in the last month, so I am replenishing with better, albeit somewhat more expensive ammo (sold some ball ammo, and now replacing that with expanding ammo).

I used to have more credit available, but Citibank said they were cutting off gun sellers, so I cancelled my card with them. I don't really need the credit, if I have to I have enough cash I can get within a week or so by cashing out my Roth IRA, but that is for emergency emergencies.

 

[The Heretic]

Didn't everyone get some massive unemployment/relief checks or something? I got nothing but I heard a lot of people were expecting freshly printed money.

I am getting some of that UI $ every week while I look for a new job, and I got the stimulus check too. For me it pays the bills and allows me to set aside some for when it runs out - at 66 yrs old I probably won't find another job before then, if I ever do.

 

[AshWilliams]

I was a little wise - in 2018 I paid two months ahead on my mortgage, so this summer I have been able to skip two payments. Mortgage is the only debt I have. I keep my CC paid off in full when it is due.

I feel sorry for those that have debt and live paycheck to paycheck. This isn't going to be pretty.

Ditto. Only debt I have is my mortgage. I'm pretty sure that makes us unicorns in that respect. Most Americans are mired in debt, buying things they can't afford because somehow they think they're entitled to them.

Good idea on paying ahead on the mortgage given the current financial waters.

 

[The Heretic]

Ditto. Only debt I have is my mortgage. I'm pretty sure that makes us unicorns in that respect. Most Americans are mired in debt, buying things they can't afford because somehow they think they're entitled to them.

Good idea on paying ahead on the mortgage given the current financial waters.

I paid ahead because I sold some timber and I was initially planning to payoff the mortgage, but there wasn't enough timber to pay even a third of it, and other things (med bills, etc.) came up - so if I could not pay it all off and get out from under the mortgage payments, I decided to hold as much as possible in reserve. About two thirds of that was spent on other things, primarily med bills and family support.

I am not as frugal as I sound, when I get extra income it tends to burn a hole in my pocket - but I only have the mortgage debt and I had been putting 30% of my work income into retirement funds/savings.

 

[Medic!]

Yeah - I can do that, but I won't. With my luck I would suddenly need all of the credit line for some other emergency and not have it. My CC is my emergency backup just in case. I have the cash and then some, but I pay with the CC to get the rewards and to maintain a credit history. I also get free use of the $ for a month or two.

That line of credit is just as likely to sink you as it is to save you.

And what is a credit history? Or credit score?

 

[The Heretic]

That line of credit is just as likely to sink you as it is to save you.

And what is a credit score? Or credit history?

My CC is for emergencies that need immediate remedy - sudden med/dental bills not/partially covered by insurance, car repairs, etc., where I need to call into somewhere, or whatever - mostly in part due to the better fraud//etc. protection you get with a CC than a debit card. Like I said, I pay it off every month, even when it is a $14K dental bill (ouch!).

As for my credit score - 800+

I have 60% equity in my property too, plus enough in retirement funds to pay that off if I had to.

So not likely to sink me as long as I don't let it get out of control - in anything financial, discipline or lack of it, is what matters.

Plus, if something really bad happened, handle the emergency first, then deal with the financial repercussions.

 

[Medic!]

Debit card with visa logo.
Same perks as CC.

But to each their own.



As to credit score?

Only a slave would need to know his manacle size.
I personally don't wear them.

 

[The Heretic]

Debit card with visa logo.
Same perks as CC.

But to each their own.



As to credit score?

Only a slave would need to know his manacle size.
I personally don't wear them.

As you say, to each their own. I only know my credit score because with my CC it is free and easy to know it. I don't get rewards with my debit card, nor free use of the $ for a month or two.

 

[Medic!]

It's true.
I'm not making those sweet points.

But the mind set I have to never be in a position to waist money paying interest ? It's worth it to me.


Again. To each their own.

 

[The Heretic]

It's true.
I'm not making those sweet points.

But the mind set I have to never be in a position to waist money paying interest ? It's worth it to me.


Again. To each their own.

I haven't paid interest on CC debt in maybe 15 years. I pay CC balances off in full before they are due.

 

[AshWilliams]

I haven't paid interest on CC debt in maybe 15 years. I pay CC balances off in full before they are due.

I have NEVER paid interest on a CC. This is after decades of using it.

 

[Wombat of Doom]

Any indication on how many could have paid their debts but didn't because "Corona" gave them cover?

They automatically applied forebearance to mine. Now keep in mind, I do not have massive student loan debt after two Bachelors and a Masters degree. I borrowed less than 40k to start out with.

 

[Medic!]

I haven't paid interest on CC debt in maybe 15 years. I pay CC balances off in full before they are due.

You misunderstood me. The mind set is not just CC's.
I don't pay interest on anything.


I'm a reformed ''Pay as I go'' guy.

 

[wolfcreed]

You misunderstood me. The mind set is not just CC's.
I don't pay interest on anything.

Well, I wish I could say the same. I hope to be able to say that in the next 3-5 years once my house is paid off. Like Heretic, I use a CC for expenses to gain points and pay it off every month.

 

[joken]

We have one tenant that owes us $1545 for June rent and here in a few days, he will owe $3090. We have been told that we aren't allowed to even talk to him about it. I anticipate him skipping when this game ends. He claimed he hasn't received unemployment and that could well be true.

 

[FortRock]

@FortRock 42% of GDP seems high. It would be SHTF if true.

10%? 20% as an extreme?

I agree. Wish I had captured the link. I will look around. Writer's name was Schuler or something like that.

 

[Hueco]

Debit card with visa logo.
Same perks as CC.

But to each their own.



As to credit score?

Only a slave would need to know his manacle size.
I personally don't wear them.

If there's fraud on your debit, your account has less money in it and you have to try to get the money back. If there's fraud on a CC, you haven't lost any money through the chore to get rid of the fraud. Hate CC's all you want but there are some great benefits to their use, when used wisely.

Honestly I've never understood the hate for them. It's like swearing off every semi-automatic pistol because you're a revolver guy. Tool is a tool, just use it wisely.

If you ever plan to take out a loan: house, car, personal...you should know your score and maintain a good one. My last car loan was at 0.9% interest. Making double payments meant I paid a whole $300 or so bucks of interest on a 17k loan. Having a great credit history got me that.

There are many financial tools available to us; I'd not write any of them off.

But, like you said, to each their own.

 

[revjen45]

1) "All of that went to extra ammo and guns, however."
Then you invested it wisely, Grasshopper.

2) We have been in the week-to-week situation, and I can empathize with people who are.
Our son was born right after I got out of school, and we thought him having a full time mother was more important than her having a job.
When we had it good (both of us working) we saved all we could.
We always based our budgeting on 1 income without OT and lived below our means. I could not see actually needing OT to meet expenses.

3) Saw a recent article that some huge %age of the populace would have a hard time scraping up $500.
That's a really scary position to be in.

 

[The Heretic]

There was a time when I was making min wage - at a time when that was about $2.85/hr. Most of the work was seasonal, so I only worked about 6 months out of the year, and that was when things were going good. Wife was pregnant, then staying at home with the baby. Paycheck to paycheck? Yup, and when the paychecks stopped, it was not unusual to have to move in with the parents. Overtime was greatly desired and appreciated - even today it would be, if I had a job, as it would mean more $ in savings.

 

[Member 5605]

There will be a ripple effect there; at least some landlords will not be able to make mortgage payments.

This is true. Wife and I were discussing those who have multiple rentals and don't have high overhead to cover skipped payments from tenants. How quickly ones house of cards can tumble if leveraged too far.