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Good point. Here's some good indicators. One of these isn't a sign in and of itself. Two or more means they're blowing money like a pimp with a week to live:
1) They're always going out to eat. #1 sign of somebody improvident with money.
2) They're always going on vacation somewhere, yet you wonder how they're paying for it.
3) They're always buying the newest, latest, and greatest.
4) They're paying for a maid, a yard guy, or somebody else to do what they could do around their own house.
5) When you talk about not wanting to spend money on something, they poo-poo you and try to convince you to go for it. Because people who are imprudent with money cannot relate to people who are prudent with money.
6) Big screen televisions are a pretty darned good indicator. Seriously. Who really needs a 50+ inch television?
7) Ongoing refinancing of houses and the what not.
8) Continuously paying for the kids' entertainment. Movies, camps, bowling, you name it. After all, kids can hang out in the back yard, and it's free.
I suppose this references people with debt issues. I do 1 & 4 as I'm single and travel often for work, my tv is only 42". Then again I make ok coin so in part I look at it as Ronnie Trickle down economics. If job status changed both would be discontinued.
Okay, here's one. I have not spoken with my friend about this yet - not really sure how to handle this. So, as far as she is concerned, there is no problem. The problem exists solely in my mind at this point.
Last October I helped a friend through a bad divorce and her subsequent bankruptcy. I have a sh*tload of credit cards and after her BK she had no credit, but was planning a wedding (I know - HUGE red flag!). She asked if I would put her on one of my accounts as an additional card holder so she could buy her dress and the things she needed for her wedding. I agreed to help. I gave put her on an account I wasn't using, that had a zero balance and a small line of credit ($5000). I have not asked about the card or her payment history or anything like that because I don't want to be "nosy". However, she always has brand new clothes, which I'm sure she's been using the card to buy - but I don't ask.
Over the year that she's had the card, I have allowed her (yeah, dumb - I know) to create an online account with a password that only she has access to so that she can pay the bill online and manage the account. I have not received any statements or anything regarding this account for about a year. Recently, in taking stock of my finances, I sent a letter to the credit card company requesting copies of the statements, or at least the most current statement, because I want to see what the balance is and what the payment history is and whether or not there have been any late payments.
So, I get a call yesterday from a rep from the credit card company regarding the letter I sent. She told me that a statement was being sent out to me, but that the balance was $4991.00. There have been no late payments, but whatever my friend pays on the card, she promptly turns around and spends that much afterward, so the balance never goes down. The rep told me the balance shot up about 2 months after my friend started using the card.
This puts me in a weird situation because I don't want to be nosy and up in her business, but I am still the primary cardholder and I am the dummy responsible for this account. I am planning to apply for a rather large loan after the first of the year and am in the process of making sure I have all my ducks in a row before I apply. I don't know if I should say something, or not say anything or what! I wish I had never allowed anyone else access to my credit! Should I cancel the account without telling her? Should I just grow a pair and confront her (in a non-confrontational way)? Now I know why she had to file bankruptcy!!!
I have another situation going on that is stressing me out in addition to this, and maybe I'll get around to posting that somewhere later today. I just wasn't sure how much personal stuff I wanted to reveal, but hey - we're all friends here, right???
Chances are that this is negatively affecting your credit report already. The reason for this is because the credit card is almost 100% utilized which is a red flag to lenders. While it likely won't mean they'll deny you the loan, it may bump your interest rate up.
I'd talk to your friend and explain that you will be applying for a loan and you want to make sure there are no red flags on your credit report. You can get an annual free credit report from www.annualcreditreport.com to show her how you found out about the balance. Explain to her that the high utilization is potentially hurting your chances on getting good terms on the loan and you want to clean it up before you apply. Hopefully she'll work it out with you.
Once it's cleaned up, it takes a couple of months for the information to flow through the system, so wait as long as you can before applying for the loan.
Thanks, Akck. I know this is really stupid, but I have been agonizing over how to bring up this subject with my friend. I never in a million years thought she would run up the card like that - and continue to keep the balance high! I learned some valuable lessons here - never underestimate someone's ability to spend (and spend and spend), never *********rself to help anyone else out, and deny all requests for financial help (unless it's one of my kids and he really needs help.). I feel like a total dunce because this was stuff I already knew. I must habve been off in Lala-land when I agreed to this arrangement. Let's just say it's a good thing my toes are twinkling, cuz the brain went dim!!!
Thanks, Akck. I know this is really stupid, but I have been agonizing over how to bring up this subject with my friend. I never in a million years thought she would run up the card like that - and continue to keep the balance high! I learned some valuable lessons here - never underestimate someone's ability to spend (and spend and spend), never *********rself to help anyone else out, and deny all requests for financial help (unless it's one of my kids and he really needs help.). I feel like a total dunce because this was stuff I already knew. I must habve been off in Lala-land when I agreed to this arrangement. Let's just say it's a good thing my toes are twinkling, cuz the brain went dim!!!
Akck is right! You better take care of this immediately, so you have a few months for your score to go up before you take the loan. Any usage over 25-30% of the limit raises red flags and we're talking 100% here...
Okay, now ... should I do this in person, over the phone, or by email or text?
Just kidding. I know I just need to grow a pair and do it in person! I hate these kinds of situations!!!
Phone, email or text would be fine......
For setting up an in person meeting.
When you meet in person, have several alternatives in mind that are acceptable to you, but be willing to accept any from her if they meet your needs. A couple that I can think of are that you pay off the card, take possession of it and then she pays you until it's paid off or she pays it down to the 25-30% level and keeps it there and you let her keep the card until just after the wedding. At that point, you get the card and she pay the balance off. Any ideas in between these two would be acceptable. The main thing is you get the card in the end.
She already had the wedding - a couple of days after her divorce was final!
I think I'm going to have to pay off the card and have the credit card company freeze the account, take her name off, get the additional card back and then have it unfrozen again. I would have discussed this with my husband but unfortunately, he'd probably kill me if he knew I did something this stupid!
I have another situation that is stressing me out too. I might post that one tomorrow - it's a doozy. Not sure what to do with that situation, but I've decided to disown my parents over it. Both of these situations together are just about putting me over the edge - and I'm not even a postal employee!!!
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