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I'm speaking here about those that have exhibited poor credit card use (maxing out cards, carring large balances for extended periods, etc) throughout their lives.
Sure people can learn after getting "burned" and seeing the aftermath of it, but I'm talking about those that have not?
I'm sure everyone on here knows such a person. A spouse/significant other, family member, close friend, etc. We all know all the ins and outs of credit and CC utilization. Transactor behavior. Not carrying balances. PIF. Never buying something you couldn't pay off tomorrow if you had to, etc. Has anyone had success in transferring this quality credit behavior and practices to others prior to them hitting a catastrophe?
Does anyone have any advice on how to "get through" to someone? How to get them to see the light and change their poor credit card behavior before a disaster happens?
@Anonymous wrote:I'm speaking here about those that have exhibited poor credit card use (maxing out cards, carring large balances for extended periods, etc) throughout their lives.
Sure people can learn after getting "burned" and seeing the aftermath of it, but I'm talking about those that have not?
I'm sure everyone on here knows such a person. A spouse/significant other, family member, close friend, etc. We all know all the ins and outs of credit and CC utilization. Transactor behavior. Not carrying balances. PIF. Never buying something you couldn't pay off tomorrow if you had to, etc. Has anyone had success in transferring this quality credit behavior and practices to others prior to them hitting a catastrophe?
Does anyone have any advice on how to "get through" to someone? How to get them to see the light and change their poor credit card behavior before a disaster happens?
I think a lot of it is just education about what credit is, how it functions, how it can benefit you, how it can harm you, etc.
Growing up, my main example of credit use was my mom who has always used credit cards to bridge the gap between her means and her panicked wants - always keeping on top of payments but regularly carrying large balances especially relative to card limits.
This led me to think of CC's as a risky means to get something I really can't afford.
Fast forward through over 10 years of adulthood and basically because I didn't want to get hit with FTFs on a foreign trip I ended up stumbling into credit forums and have made a complete 180.
Now I pretty much refuse to buy anything with cash or debit card, generally don't pay any CC interest (I did slip once when I thought I had PIF'd on Arrival+ and got hit with interest on $17), and have been slowly educating those around me to help better their situation.
Willpower not to spend more than you can pay off is really the only 'difficult' part for people - which is something one of my siblings still hasn't been able to grasp nearing the end of her 30's and having filed ch7 bankruptcy twice so far.
I very politely and respectfully disagree with the position that carrying a balance is necessarily always bad. Is PIF the ideal? Certainly, but the ability to revolve balances can be an advantage in certain instances, assuming that it is not taken to excesses or extremes. Credit cards are just another method and way of obtaining a loan and being loaned money after all; there's nothing wrong in mho with using it for that purpose, if one does so willingly, and within reason. Paying a lil bit interest of very small interest from time to time isn't gonna kill ya, lol
@galahad15 wrote:I very politely and respectfully disagree with the position that carrying a balance is necessarily always bad. Is PIF the ideal? Certainly, but the ability to revolve balances can be an advantage in certain instances, assuming that it is not taken to excesses or extremes. Credit cards are just another method and way of obtaining a loan and being loaned money after all; there's nothing wrong in mho with using it for that purpose, if one does so willingly, and within reason. Paying a lil bit interest of very small interest from time to time isn't gonna kill ya, lol
+1 Credit cards, when used responsibly, can be very beneficial for things that you need 3 to 6 months to pay off; such as a car or home repair. It is always a good idea to keep a low APR card in your arsenal for exactly that reason. At least in my opinion. Otherwise, I use reward cards for things I would pay for with cash, check or debit then pay the card in full to reap the benefits.
@galahad15 wrote:I very politely and respectfully disagree with the position that carrying a balance is necessarily always bad.
I didn't say "carrying a balance." I said "carrying excessive balances for extended periods of time."
I don't know anyone that's educated with respect to credit that believes that carrying excessive balances for extended periods of time isn't a bad idea.
@Anonymous wrote:Willpower not to spend more than you can pay off is really the only 'difficult' part for people - which is something one of my siblings still hasn't been able to grasp nearing the end of her 30's and having filed ch7 bankruptcy twice so far.
Thanks for the reply. I think the above portion of your post that I quoted is the toughest part of all for most people. How do you really teach someone this seemingly simple concept? Not so much teach them, but get them to buy into its importance? I think this is where the struggle exists for many that find their way into credit trouble.
@galahad15 wrote:I very politely and respectfully disagree with the position that carrying a balance is necessarily always bad. Is PIF the ideal? Certainly, but the ability to revolve balances can be an advantage in certain instances, assuming that it is not taken to excesses or extremes. Credit cards are just another method and way of obtaining a loan and being loaned money after all; there's nothing wrong in mho with using it for that purpose, if one does so willingly, and within reason. Paying a lil bit interest of very small interest from time to time isn't gonna kill ya, lol
Hmm I don't think we said that it was always bad - but it is never the goal.
Having the option of carrying a low or 0% balance in an emergency can of course be beneficial, but this means that the person had insufficient savings to cover emergencies, which is a slippery slope to be on.
From what I've seen so far in life (and mind you I say this as someone who doesn't have enough savings at the moment), it seems that for most humans the ability to wait, to spend only what is needed, etc is extremely difficult. The better you get at it, the easier your life becomes.
Getting into trouble with poor credit use choices is one indication of poor judgement and lack of patience, and being forced to carry balances for 3, 6, or 12 months because an emergency popped up and there was no savings to cover it also shows less-than-ideal judgement and planning. We (yes I include myself completely) are too used to living higher than necessary and getting things when we want them rather than when we can safely afford them.
If you can learn to live on only that which is absolutely necessary, it's much much easier to save money for the unexpected emergencies, as well as being able to safely splurge on the things you really want - once you are in a financial position to do so. This also has the benefit of improving your overall credit rating for cheaper auto loans, cheaper mortgages, cheaper car insurance, etc which in turn means more money in your pocket so it is an upward spiral instead of a downward one.
I think once someone has ingrained bad habits, it is very difficult to shake them unless the person really wants to. And people generally don't resolve to change until it becomes clear that it's causing them harm.
If they screw up because they aren't aware of information then presenting information will help. If they know to PIF but have uncontrollable impulses then nothing will help. I had another thread about it being genetic but mods won't let me post link to it.
I know a guy who makes more than $100,000 a year. He filed for bankruptcy. He turns and does exactly the same thing that caused his first bankruptcy. Always has to have motorcycles, boats, and the toys such as satellite tv. Nobody taught him how to save money. Here's the worst part. He is an IT guy and knows his stuff but he's been through 15 jobs since college. He is usually under a one year contract at a time. You'd think he would be extra cautious with his money since his job situation is very volatile. He never made anything less than a A through school and that super competitive personality is why he gets trapped into the material posession stuff.
I think most of my family members have bad credit. They've never read a book from cover to cover and don't really care to learn about credit. The lack of mental curiosity really hurts their ability to maximize opportunity in life. You can't teach people who are unwilling to learn.