Will people change their credit habits because of the credit crunch?
The credit crunch has highlighted the fact the majority of countries/people run and live on credit. Have or will you change the way you handle credit?
I don’t have credit cards or loans. Just a mortgage. How many people live like that?
I personally realized it a little over 2 yrs ago when I added up- all interest I was paying out in one month and realized not only was it a large sum of money but that it would be all mine without all the credit cards…At that time I put myself on a major debt reduction path…cash only…no major expenses/purchases without saving for them 1st…Cut out all meals out and such…aim was to pay off 1 credit card and then rollover the payments to another…I continued to do this until now I have only 1 card with a small balance which will be paid off about first of the year…at which time I will be totally debt free with no plans to fall into that trap again.
I believe we will have turmoil until others realize they are in same situation and take control (instead of blaming others and whining for help)…we have become to credit dependent and lived way past our means…time to pay the piper…in turn less spending will also contract the economy as it has become bloated from our overspending…it is tough medicine to swallow but we must for in the end we will all be much better for it.
10 Responses to “Will people change their credit habits because of the credit crunch?”
I have a credit card, but I have always paid it off in full, I only use when buying insurance etc, I don’t spend what I don’t have.
I also have a mortgage.
Comment made on March 8th, 2009 at 5:31 pmReferences :
I have lots of cards, but I pay off the balance each month unless the rate is lower than what my investmens are making. For example, I have a $12K balance with Bank of America at 1.99%. I can make more on savings at eTrade or ING than that, so I don’t pay the card off.
Comment made on March 8th, 2009 at 5:44 pmMost people aren’t so smart with their money. And by “not so smart”, I mean most of them are stupid. They live beyond their means, and will continue to do so.
There are some who will charge out of medical necessity, but the vast majority will charge something like a LCD TV for Christmas instead. While people won’t be able to get new cards as easily, banks are happy to extend credit limits, and the upcoming injection of money from the Federal Government into this market will just make credit even easier.
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I agree with Roadhunter in that people do live beyond their means. Thing is, with the way gas and food went up, we adapted, downsized and prioritized. Which is what we should be doing from the get go, right? Then as gas dropped like a rock, we go back to our old habits. Not smart.
Comment made on March 8th, 2009 at 6:06 pmReferences :
As bad as the credit situation sounds, its still not impossible to get credit. If you have a good credit rating, credit is still available out there; but its not as easy to get as it used to be for people who have marginal or weak credit. The government is going to inject a lot of money into the credit markets so the banks will soon begin lending more again.
To be honest, I don’t think the current situation is going to force everyone to change their spending habits or how they use credit. People who have very good credit, some savings, low debt, and a solid income will fare better because although these people have easier access to credit they don’t abuse it by running out to buy every little thing on credit just because there’s a sale. But these people are relatively few compared to the masses.
Most people do not have a very good credit rating or any savings at all. They spend most of their income paying back debt and other bills because they are up to their necks in it—and they’re still buying things they can’t afford with credit cards.
Comment made on March 8th, 2009 at 6:12 pmReferences :
I agree with the Welsh Lad, do not spend what you don’t have.
Comment made on March 8th, 2009 at 6:34 pmReferences :
Those who are not affect by the credit crunch need not change much but those who are need help. For people who are made redundant, they need to get employed quickly or to give help either from relatives or from the government.As for the government it need to look at the big picture and only help those who are in need of help. It should not regard that all its people needed help.
Comment made on March 8th, 2009 at 7:20 pmReferences :
I personally realized it a little over 2 yrs ago when I added up- all interest I was paying out in one month and realized not only was it a large sum of money but that it would be all mine without all the credit cards…At that time I put myself on a major debt reduction path…cash only…no major expenses/purchases without saving for them 1st…Cut out all meals out and such…aim was to pay off 1 credit card and then rollover the payments to another…I continued to do this until now I have only 1 card with a small balance which will be paid off about first of the year…at which time I will be totally debt free with no plans to fall into that trap again.
I believe we will have turmoil until others realize they are in same situation and take control (instead of blaming others and whining for help)…we have become to credit dependent and lived way past our means…time to pay the piper…in turn less spending will also contract the economy as it has become bloated from our overspending…it is tough medicine to swallow but we must for in the end we will all be much better for it.
Comment made on March 8th, 2009 at 7:30 pmReferences :
I doubt it will change many habits at all. People are going to blame unemployment, banks failing, government bailout, oil prices, anything they can instead of themselves overspending. We need to go through a pretty sustained period of hard times for it to impact the way people spend. I hate to say it, but the depression taught our elders how to save money.
Comment made on March 8th, 2009 at 7:43 pmReferences :
i wish i had never got one credit cards at all they are too easy and too handy to use its ok if you can pay them off in full every month but when you can t its hard
Comment made on March 8th, 2009 at 7:56 pmReferences :
i will. i wont spend near as much as i did when i stockt up 4 last winter. what i CAN say is if yer gonna max out yer credit, get ONLY stuff u NEED that’ll carry u thru an extended period, like suppliments & other non-perishables. make WISE use of the cc. i don’t reccomend maxing out, but if yer facing some sort ofneed get what U NEED & don’t waste a single cent of the credit on foolish things.
Comment made on March 8th, 2009 at 8:03 pmReferences :
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