| Forum Home | ||||
| PC World Chat | ||||
| 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 | ||
| 821556 | 2009-10-18 20:59:00 | Hi Guys, I have some close relatives who have a fairly high mortage on their house, and some car hps and a 10K credit card bill. They are talking about re-financing the whole lot on the house. Do you think this is a good idea. I know the interest will be lower, but I just wonder that they will be getting nowhere, and will probably be in the same position in a few years time unless they are very disciplined and pay more off their mortgae than they are now, and don't get any more hps or credit card bills. What do you think ? Credit cards save you more money than using a debit/eftpos card because you keep your own money (that you would have spent using cash/debit/eftpos) earning up to an additional 60 days interest. It is when you fail to pay the balance in full - in which case, as others have said, you shouldn't have purchased it in the first place. In fact some people I know purchase everything on their credit cards, and then when it is due, capitalise it all on their floating mortgage. They have their salary paid directly into their revolving mortgage, meaning their pay packets reduce their interest bill from day one. As for the OP: it really depends on what their mindset is. If they REALLY want to get out of debt, they will have no problems capitalising it on the house; the mortgage rates are at an all time low compared to credit card interest rates (please tell me they are with a bank for their mortgage and not a finance company) However if they are one of those people who, despite being in a load of debt, go out and buy big ticket items eg "I bought that tv/car/computer/whatever despite being in debt because I think I DESERVE it, I DESERVE a break!", then no amount of refinancing will help as others have said. In fact, if they were REALLY determined to get rid of their debt, they would sell what ever unnecessary items they purchased on finance to repay that debt. While this may sound counter intuitive, (because now you have nothing except the item's debt!), they would have paid off a huge chunk of that debt. Smaller debt = less interest paid over time. |
utopian201 (6245) | ||
| 821557 | 2009-10-19 02:45:00 | 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. Cheers Billy 8-{) :waughh: The reference to selling credit card purchases on Trademe to make a payment on the Credit card was tongue in cheek, and just to demonstrate a bit of absurdity.:banana As for the extra cost, I consider it fair play, I get to start using the item immediately, The shop makes a sale, and the company who made it all possible gets a couple of hundred bucks. Everyone's happy. Sure there are plenty of thick hopeless people getting into strife, That has zero bearing on the way the majority (I'd hope) people use credit, It at least has no bearing on my finances, and the use of credit in itself isn't evil or poor judgment. |
Metla (12) | ||
| 1 2 3 | |||||