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| Thread ID: 104131 | 2009-10-17 19:10:00 | Putting credit card bills on the house ? | Digby (677) | PC World Chat |
| Post ID | Timestamp | Content | User | ||
| 821546 | 2009-10-18 00:34:00 | I am a qualified budget advisor and see this sort of thing all the time . If they are serious about paying off their debt then they would be well advised to make an appointment to see a budget advisor . There are free services available in most of the main centres - look in the phone book or contact the local CAB for contact details . The budget advisor will draw up a budget for them showing their weekly income versus outgoings and suggest how they can manage their money better and pay off their debt . After that it is up to them to discipline themselves . If they don't have the self-discipline and determination to help themselves they are wasting their time . The key thing to remember is that they did not get into debt overnight and therefore will not get out of it overnight . To answer your original question, yes it would be a good idea to re-finance the loans on the house providing that their mortgage is not subject to penalty fees if additional payments are made to the principle . They should also be prepared to cut up the credit card and not take on any further HP until it is all paid off otherwise they are just going to get into a never-ending cycle of debt . Recommend that they see a budget advisor as soon as possible . |
FoxyMX (5) | ||
| 821547 | 2009-10-18 01:57:00 | Well my friend did it. Had loads of the card, husband loved his time payments and bought all sorts of crap. The upped the mortgage considerably and got rid of the lot. The card now has a permanent limit of $500. Whether that stopped her husband racking up time payments is another thing. My card has a $500 limit and put the money on it before I use it. |
pctek (84) | ||
| 821548 | 2009-10-18 03:37:00 | I agree with FoxyMX, but putting your house at risk for frivolous expenditure is much like buying lotto tickets by the bale. The arithmetic does not add up. The debit card is pretty safe, and cheap. Especially safe if you severely limit the amount in the associated account. |
R2x1 (4628) | ||
| 821549 | 2009-10-18 04:43:00 | Yes I get surprised looks from sales people when I buy a big ticket item and they ask how I want to pay for it and I say cash, after they have just got the HP forms out. :) Plus you can usually get a good discount when paying cash. You just ask what their discounted price is when paying cash. The only thing you should buy , when you can't afford it, is a house, as a house is an asset that will usually appreciate in value. For other things, such as house hold appliances and cars, you are in a lose lose situation, as they lose value. Now is a good time to sell a house by the way, so they may want to investigate that. When interest rates skyrocket next year, there will be a glut of houses coming on to the market, as people who are on 'floating' rates, won't be able to afford their mortgage. Already there are record mortgagee sales, and I am picking this to grow. NZ houses are overpriced, especially based on their quality, so there is a big price correction to come, as the bubble bursts. Also with some form of property tax coming in next year, now has never been a better time to sell. Good to make hay while the sun shines. |
robbyp (2751) | ||
| 821550 | 2009-10-18 04:49:00 | Nothing wrong with buying on credit, If your a twat then your a twat and you will find a way to get yourself in trouble, That in itself doesn't make credit a bad thing. Its just like saving, except in reverse, and you get to enjoy your cool stuff.:banana:banana:banana |
Metla (12) | ||
| 821551 | 2009-10-18 06:04:00 | Thanks guys, Some good info here for them. Keep it coming if you wish. You all say if they do it, to cut up the credit card - makes sense. But what about the maths of it ? Does it pay to do this given the cost of re-financing and possible break fees fro the hp ? |
Digby (677) | ||
| 821552 | 2009-10-18 06:16:00 | Well that is something only they or you or a budget advisor can tell by sitting down with all the facts and doing the math, and when I say all the facts I mean ALL the facts not leaving out say a loan of $110 because it seems small and insignificant. Everything has to be counted in. | gary67 (56) | ||
| 821553 | 2009-10-18 07:33:00 | But what about the maths of it ? Does it pay to do this given the cost of re-financing and possible break fees fro the hp ? No one can tell you that without knowing the current interest rates and fees being charged. There are many factors to consider and, like gary67 says, everything has to be included to obtain a complete picture before accurate advice can be given. |
FoxyMX (5) | ||
| 821554 | 2009-10-18 08:56:00 | No one can tell you that without knowing the current interest rates and fees being charged. There are many factors to consider and, like gary67 says, everything has to be included to obtain a complete picture before accurate advice can be given. Quite right. Break fees are a killer, when interest rates are low, and you fixed on a far higher rate. |
robbyp (2751) | ||
| 821555 | 2009-10-18 20:38:00 | Nothing wrong with buying on credit, If your a twat then your a twat and you will find a way to get yourself in trouble, That in itself doesn't make credit a bad thing. Its just like saving, except in reverse, and you get to enjoy your cool stuff. You are right Metla, up to a point, but you omit the fact that by enjoying a purchase you couldn't pay for, with extortionist credit card interest you have ended up paying a price most people probably wouldn't even have contemplated if it was on the sticker. 'Saving in reverse' simply means paying substantially more, and in your scenario it seems you take a double-whammy by selling at a considerable loss on TM then continuing to pay for an item that somebody else is enjoying by holding back until they could pay cash to buy it off yet another 'conspicuous consumer' who couldn't wait. I have also found that by deferring purchases until we can afford to pay cash, we often find we don't really need it at all. This technique works particularly well with Mrs T, who is into instant gratification, a trait she claims was caused by her (acknowledged and fair comment) rather deprived childhood. After a few weeks she says she doesn't want it any more and moves on to the next desire, then a few weeks later...................... Three bananas was an apt illustration of the wisdom of this financial theory. Having said that, I have just entered into my first time-payment arrangement in over 30 years (excluding the mortgage), but it is for reconstructive dental work for repairs to damage done in a car accident 30-something years ago. When my jaw hit the floor after I was advised the cost (fortunately not doing further damage) I was offered the same price as a no-interest deal over 12 months so I keep my investment interest earnings and pay the cash price. That is the only way I would contemplate HP at today's interest rates. Cheers Billy 8-{) :waughh: |
Billy T (70) | ||
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