i answered another post stating i know of 2 guys in particular who owe over 30k. i am not kidding,they have'nt made payments in months because they cannot afford it. how did they rack up so much debt? not by buying electronics or going out to dinner or going on vacation but by getting cash advances to pay their mortgages because they were on the verge of losing their homes. the one guy also used it to pay utility na dcar payments. these are not irresponsible guys but ones that are in survival mode. they had every intention of paying hoping times would improve. its a shame. these are extreme cases but their are many who owe well over 5k ,so do the math. credit card companies are in trouble. what can a credit card compant do if you don;t have the money to pay? nothing..let them get judgements,you cannot draw blood from a stone.
well 6 months now means they should have charged it off and let the collection companies take over. It'll continue to be "selective prosecution" in the meantime depending on where you live and what you make... But I'm sure there are plenty of others out there who have used the card(s) to pay utility bills, mortgages, gas, etc....in essence just trying to survive.
Sorry to burst your bubble but these friends of yours sound like the definition of irresponsible. Where are their savings? Only a fool takes on hundreds of thousands of dollars of debt and lives paycheck to paycheck. opm8
Its just another example of how overlevered a lot of people are. Its also corporations and the government. One of out of ten people is enought to cause a serious recession, but I think thats optimistic. How many other wealthy people have loaded up on real eastate? even if you make 1 mil a year alot can go to debt service. Lowering interest rates is a joke and if anything it could make the problem even worse.
I don't know, there doesn't seem to be a good way to tell just how much of the massive credit card debt out there is bad. That seems to be the trillion dollar question. For instance, I may carry a $5 bill in cash all month long because ALL of my expenses go on my credit cards (food, bills, stuff), and I pay it off every month but I'm sure all this debt is captured as credit card debt even though its not because I have the cash to back it up. I'm sure this is the case with most of the debt so seems hard to go out and short a credit card company after the massive drop we've already had in the financial sector. Plus I personally carry 30K in credit card debt that I make minimum payments to every month and add to it when I get the chance....but I have the cash to back this debt up also, so even though it looks bad on a credit report it can be wiped out in 1 day so is it really bad?
The recession is bad enough but these cc companies are jacking the rates on people who pay their bills on time pushing some people into bankruptcy especially if they lose their jobs.
5-30K isn't a lot of money if you have income and can pay the monthly min. payment. personal debt is even more manageabl than mortgage and car debt. A fews years ago in 2005, the banks made legislation that made it hard to declare bankruptcy to wipe out debt. with interest rates of 10-20% in these credit cards, these banks are gaurantee a profit.
Why would you throw money away like that? Your cash is earning almost nothing, while you're paying probably 6-10% on your 30k credit card debt.