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Young Aussies struggling with debt, and we’re not even talking mortgages yet
Topic Started: 17 Aug 2014, 10:33 PM (3,570 Views)
Jimbo
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peter fraser
18 Aug 2014, 10:48 AM
I get people who come to me and say "I've saved $20,000" and then I say "but you have a $20,000 credit card debt"
That is insane but I know people like that.

There was a TV show in the UK where a financial expert met up with people in strife and tried to re-model their lives. It was surprising how many had no idea of how much trouble they were in. They didn't even know their net worth. He would tally up their assets and liabilities and they would cry when he revealed the answer. The tipping point was always the credit card or store card debt. Many had four or five cards. I don't think you can do that in Australia but then I have never tried.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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zaph
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peter fraser
18 Aug 2014, 12:03 PM
Yes much of it is high risk compared to other lending. However much of it is low risk. The bank already has a mortgage over the house so they have quasi secured debt which still attracts the high rate.

One of the lenders does offer a $20,000 card at home loan rates so I guess that's tied to the security somehow.
I agree the banks are gaming it.
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stinkbug
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Jimbo
18 Aug 2014, 12:17 PM
That is insane but I know people like that.

There was a TV show in the UK where a financial expert met up with people in strife and tried to re-model their lives. It was surprising how many had no idea of how much trouble they were in. They didn't even know their net worth. He would tally up their assets and liabilities and they would cry when he revealed the answer. The tipping point was always the credit card or store card debt. Many had four or five cards. I don't think you can do that in Australia but then I have never tried.
I used to work with a bloke who managed to rack up over $110k of credit card debt.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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ThePauk
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herbie
18 Aug 2014, 10:05 AM
Wanna take a guess how many credit cards I have? ... :)

I suppose one could argue that used wisely, they let you get free use of the bank's money for a month while your own money is busily earning interest? But I just don't feel sufficiently motivated to be bothered with that. And anyway, there's the annual fee to consider as well.
Herbs
Easy, none as for you they are a socialist threat?
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Lets go to Biarritz instead
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peter fraser
18 Aug 2014, 09:27 AM
Oh gunna is just cranky because I kicked his arse the other day.
He is able to post anything that he wants over at MB whereas I often get censored if I reply.

He'll get over it eventually.

At around 18% credit cards border on criminal behaviour by the banks. Whenever I get financial details off clients and they tell me that they don't have any credit cards I let out a little silent cheer.

The next best is someone with cards that don't carry much debt and the limits are low.

People with high limits that are fully utilised are their own worst enemies.
Peter, the way some see things over the last couple of rounds

Gunna has pummeled you pretty comprehensively on the idea that foreigners cant get money if they dont have FIRB approval

Then he exposed exposed your untruths alternate reality issues over there

Then he has kind of filletted you and Australia's realestate dream with that diatribe on Saturday morning. We note you havent used the word 'whacked' again - has he scared you off that?

I don't actually think he is a journalist though - there is nothing like that in Australia's press. Nothing in the fringe lefty set, nothing in anything mainstream.

He does have a way with words.
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peter fraser
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Lets go to Biarritz instead
18 Aug 2014, 02:07 PM
Peter, the way some see things over the last couple of rounds

Gunna has pummeled you pretty comprehensively on the idea that foreigners cant get money if they dont have FIRB approval

Then he exposed exposed your untruths alternate reality issues over there

Then he has kind of filletted you and Australia's realestate dream with that diatribe on Saturday morning. We note you havent used the word 'whacked' again - has he scared you off that?

I don't actually think he is a journalist though - there is nothing like that in Australia's press. Nothing in the fringe lefty set, nothing in anything mainstream.

He does have a way with words.
if you and gunna think that he has given me the rounds of the table then good luck to you. The full thread is here somewhere, so why don't you read it for yourself.

I didn't use the term wacked, I said that I gave him a good whack for his delusional rantings on a subject that he has zero knowledge on. If he wants to twist that during one of his drunken missives then he's quite at liberty to do that. Personally I would be ashamed for saying what he wrote, but clearly gunna has different standards,

For his sake though I hope that he gives up the booze and drugs.

PS - tell him to develop his own writing style and stop ripping off Hunter S Thompson and Tom Wolfe.
Jimbo
18 Aug 2014, 12:17 PM
The tipping point was always the credit card or store card debt. Many had four or five cards. I don't think you can do that in Australia but then I have never tried.
Sadly yes that has happened here. The most that I have seen is 8 maxed out cards but I've heard of 10 from lenders that I talk to. The reason that happened was we had a reactive credit recording system instead of a proactive one, so applicants could hide their debts by not mentioning them. Not any more though, those days have gone.

Debt can be quite like an addiction for some people, or perhaps it's spending that they are addicted to and the credit cards are the supplier. Yet others handle credit with ease. Do we dumb everything down to the point where we are all treated like idiots, or do we adopt a more liberal view.?
Edited by peter fraser, 18 Aug 2014, 03:08 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Massive
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Recently we got credit cards for foreign employees in our office in china to link to their salaried accounts .. Horrified to learn one of them maxed out the card in a week after exclaiming " I have more money " .. bank already calling regarding his lack of interest payments to the card ... Then found out he already had multiple maxed out cards in country of origin .

Same mindset carries into home loan approvals ... Many think if bank approved the debt then it's basically their money to burn ..
Edited by Massive, 18 Aug 2014, 03:26 PM.
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Jimbo
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peter fraser
18 Aug 2014, 02:55 PM
Debt can be quite like an addiction for some people, or perhaps it's spending that they are addicted to and the credit cards are the supplier. Yet others handle credit with ease. Do we dumb everything down to the point where we are all treated like idiots, or do we adopt a more liberal view.?
In a true free market you shouldn't regulate credit at all, but then you could also argue that taking Heroin should be an individual choice as well.

Rules and regulations are there to protect the individual and often, those closest to them. I have heard stories of one partner racking up huge debts without the knowledge of the other, rendering both bankrupt.

The key is a mixture of regulation and education. When I was at high school in the 70's we had an optional subject called consumer education that covered basic economics, taxes, consumer protection law and scams. It wasn't that technical but it gave a very good insight on how to budget and avoid being ripped off.

Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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peter fraser
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Jimbo
18 Aug 2014, 03:29 PM
In a true free market you shouldn't regulate credit at all, but then you could also argue that taking Heroin should be an individual choice as well.

Rules and regulations are there to protect the individual and often, those closest to them. I have heard stories of one partner racking up huge debts without the knowledge of the other, rendering both bankrupt.

The key is a mixture of regulation and education. When I was at high school in the 70's we had an optional subject called consumer education that covered basic economics, taxes, consumer protection law and scams. It wasn't that technical but it gave a very good insight on how to budget and avoid being ripped off.
I once listened to a conversation with a pharmacist who worked in the industry before prescription heroin was made illegal in 1953. He said that while it was legal addicts came into the pharmacy for their shot and they were quite easy to deal with, but after it became illegal those people who were law abiding albeit with an addiction, suddenly had to hold up TAB agencies and Liquor stores to fund their habit. They bought from dealers who supplied varying quality drugs and overdosed when they got a high strength batch.

I'm not convinced that excessive controls are the best answer that we have to either drugs or credit.

Any expressed market opinion is my own and is not to be taken as financial advice
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van
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Quote:
 
In a true free market you shouldn't regulate credit at all


In a true and free market, banks would only be able to extend credit to the amount of physical cash they had in deposit, if they tried to do what they do today, there would be a bank run before they got anywhere near todays level.

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