Comments on: Beware The Dangers Of The Abuse Of Credit http://www.ncnblog.com/2009/03/23/beware-the-dangers-of-the-abuse-of-credit/ Debt Reduction Rocks - We Are Living Debt Free! Fri, 10 Feb 2012 00:09:10 +0000 hourly 1 By: Sandy http://www.ncnblog.com/2009/03/23/beware-the-dangers-of-the-abuse-of-credit/comment-page-1/#comment-153687 Sandy Tue, 24 Mar 2009 16:08:53 +0000 http://www.ncnblog.com/?p=2314#comment-153687 This is one of the best and most easily understood explanations that I have seen on how easy it is to fool ourselves into thinking that we are more wealthy than we really are. I have a hard time explaining this to my brother who is self employed. It only takes one disaster to show that you can not live off your credit cards. They are open ended LOANS but the bank can change the terms at any time that they want. I don't know how we go about changing our mindset from thinking of credit as a piggy bank and not as a loan product. Thanks for the entry. This is one of the best and most easily understood explanations that I have seen on how easy it is to fool ourselves into thinking that we are more wealthy than we really are. I have a hard time explaining this to my brother who is self employed. It only takes one disaster to show that you can not live off your credit cards. They are open ended LOANS but the bank can change the terms at any time that they want. I don’t know how we go about changing our mindset from thinking of credit as a piggy bank and not as a loan product.

Thanks for the entry.

]]> By: Bible Money Matters http://www.ncnblog.com/2009/03/23/beware-the-dangers-of-the-abuse-of-credit/comment-page-1/#comment-153574 Bible Money Matters Mon, 23 Mar 2009 22:36:11 +0000 http://www.ncnblog.com/?p=2314#comment-153574 The illusion of wealth, and the illusion of status bought with dollars that aren't there - is a dangerous thing. It can lead down a winding road that ends in a mountain of debt, broken marriages and depression. Don't let the illusion fool you! The illusion of wealth, and the illusion of status bought with dollars that aren’t there – is a dangerous thing. It can lead down a winding road that ends in a mountain of debt, broken marriages and depression. Don’t let the illusion fool you!

]]> By: SJ http://www.ncnblog.com/2009/03/23/beware-the-dangers-of-the-abuse-of-credit/comment-page-1/#comment-153551 SJ Mon, 23 Mar 2009 17:27:50 +0000 http://www.ncnblog.com/?p=2314#comment-153551 Bravo! The illusion of wealth thingy =) I use them purely for the points/convenience/security, etc. Tho I guess there is the possibility I overspend... hope not! But yes, conceptually, what happened to the idea of waiting and saving? For anything? The illusion and "selling" the idea that certain purchases are investments, so feel free to borrow for them is an icky issue. Bravo! The illusion of wealth thingy =)

I use them purely for the points/convenience/security, etc. Tho I guess there is the possibility I overspend… hope not!

But yes, conceptually, what happened to the idea of waiting and saving? For anything?

The illusion and “selling” the idea that certain purchases are investments, so feel free to borrow for them is an icky issue.

]]> By: Mrs. Micah http://www.ncnblog.com/2009/03/23/beware-the-dangers-of-the-abuse-of-credit/comment-page-1/#comment-153527 Mrs. Micah Mon, 23 Mar 2009 13:27:11 +0000 http://www.ncnblog.com/?p=2314#comment-153527 It's like our culture has a very powerful tool that only a certain number of people really understand. I think it's too easy to assume that you actually have the money in your credit line. Like people who are outraged that their HELOCs were shut down. The bank isn't <em>required</em> to essentially buy part of their house back from them and sell it back again. The only way you can get money out of your house is if someone is willing to buy all or part of it, no one owes you that. Same potential with credit cards, if I assume that I have $500 more at my disposal than I really do, I form a skewed version of reality which eats up even more of my money than spending cash/debit would. I think the problem is how people see their lines of credit. If you just see it as a way of making transactions with the money you actually have, then you're probably fine. If you see it as giving you more money, then unless you're buying a house or car (and can definitely afford the payments), you're setting yourself up for trouble. It’s like our culture has a very powerful tool that only a certain number of people really understand.

I think it’s too easy to assume that you actually have the money in your credit line. Like people who are outraged that their HELOCs were shut down. The bank isn’t required to essentially buy part of their house back from them and sell it back again. The only way you can get money out of your house is if someone is willing to buy all or part of it, no one owes you that.

Same potential with credit cards, if I assume that I have $500 more at my disposal than I really do, I form a skewed version of reality which eats up even more of my money than spending cash/debit would.

I think the problem is how people see their lines of credit. If you just see it as a way of making transactions with the money you actually have, then you’re probably fine. If you see it as giving you more money, then unless you’re buying a house or car (and can definitely afford the payments), you’re setting yourself up for trouble.

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