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Doesn't seem like it's a good time to overspend on our credit cards or get loans at the moment.
The article in the times today said that analysts are predicting higher charges to borrow money and higher rates to use our credit cards.
is this going to affect us now?
Thnx
I think the other important story is that credit limits may soon be curtailed. Much of the consumer debt in auto and CC bills are bundled and sold just like subprime mortgages were. Collateral may soon be required in addition to income verification and credit score as a basis for loaning any money, not just for a home.
What's wrong with "DO NOT BUY THINGS YOU CANNOT AFFORD" ?
Do you include houses and cars in that too?
Anyhow, just because you cannot pay off your credit card balance one month does not mean you are making purchases you cannot afford. There is a way to correctly manager debt. Taking on debt can be very useful and without it very few people would own homes, start businesses etc. In essence being able to borrow money is what enables the under-dog to rise up in this society and credit cards play an important role in that.
Anyhow, just because you cannot pay off your credit card balance one month does not mean you are making purchases you cannot afford. There is a way to correctly manager debt. Taking on debt can be very useful and without it very few people would own homes, start businesses etc. In essence being able to borrow money is what enables the under-dog to rise up in this society and credit cards play an important role in that.
Actually, I would include cars and houses in that too, assuming that the loan is collateralized and NOT securitized. We will return to that in the end anyway, IMHO, when the income based credit fad ends over the next couple of years.
Way too many people who can't pay off their CC are indeed making purchases they cannot afford. Also, it's highly unwise to borrow to consume, since you must inherently forgo future consumption. Also, consumer prices rise when credit is pervasive since it introduces temporary artificial demand that would've never existed without a form of EZ credit.
Borrowing to invest is the only way to borrow. Invest equals house and car since that might be the only mode of shelter and means to travel to work. Invest does not equal HDTV. Period.
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