Financing Issue(s) getting financed?

[smstonypoint]

It's a total scam designed to put consumers in debt. And it works on 99% of consumers.

Obviously some posters here have the discipline to take advantage of the "bait" being dangled. For each of you there are 10 readers of this thread that swallowed the hook.

Obviously the "scam" works or they wouldn't try it. But I think your idea of it causing 99% of all consumers to get addicted to debt (my words, not yours) is much higher than reality. I read an article in Money, Feb 2016 that said the average credit card debt in the USA was $4717 and the average interest rate was 15%. However the article also stated that 35% of folks pay their entire credit card bill each month and do not roll over a balance and do not pay interest. Of course that means that 65% do carry revolving debt, I understand that.

But those of us that do not like paying interest and are able to buy with cash and are careful with our money are not such a small group. We are not the majorly, but we aren't lonely either. And it is this group of roughly 35% of all USA adults that can take advantage of "bait" to our benefit.

Given the conflicting "facts" about credit card use, I gathered my own data.

1. About 29% of consumers had no credit cards in 2014 according to the Federal Reserve (Credit card ownership statistics). If the TBN membership is representative of the general population (and I am not claiming that it is), 7 out of 10 of us have credit cards (assuming the 2017 % does not differ substantially from the 2014 %).

2. According to the ABA (http://www.aba.com/Press/Documents/2016Q2CreditCardMonitor.pdf), among credit card holders in the second quarter of 2016, 43% had finance charges, 30% used their cards but paid no finance charges, and 28% did not use their cards. Once more, if the TBN membership is representative of the general population (and I am not claiming that it is), 3 out of 10 of us are paying finance charges on our credit cards, 2 out of 10 of us are using our cards but paying them off each month, and the remaining 2 out of 10 of us have credit cards but aren't using them (assuming the 2017 % does differ substantially from the Q2 2016 %).

The TBN membership may not be representative of the population, but I call BS (Baloney Sandwich) on the first quote above.

Steve

 

[mile9c1]

No.

You are entirely missing the point. It costs you more money out of your own pocket to be able to "boast" to being "cash only". You pay higher insurance premiums just to be able to impress your friends that you "always pay cash". Your credit score is a very huge factor in how your insurance premiums get calculated. Not my idea, not my rules, the insurance industry created that measuring tool all on their own.

My credit score is high, which helps substantially in driving my insurance costs down.

That is the entire point.

My first post was in fact that I am paying more for insurance. So I clearly didn't miss that point I don't pay to impress, I pay to enjoy the FREEDOM that comes from not being a slave to the credit industry.

It's hard to say what the exact difference is because when I had an 800+ credit score we both had 10 year old beater cars. And now we have a 2016 and 2017. When they jacked my house rate I switched carriers and avoided maybe 75% of the difference. It's really not worth sweating over.

 

[DavesTractor]

I don't think anybody is arguing with your "big picture" view of the situation. (I get it) But I don't think many, if any, finance companies look at it that way. (That's what you don't seem to want to understand) They are a plug the numbers into the formula and see what spits out. In your case your original loan was based on a completely different set of circumstances, ie no foreclosure. The downside of writing the new loan (since you insist on an answer) is that based on your current set of circumstances the formula they use (probably the same as the first time) said no without additional $$. Your current loan means nothing, its done, its in effect, and lucky for you they can't re-evaluate it because you probably wouldn't get it now with your new set of circumstances. If you want to admit it or not you are now seen as a high risk due to the foreclosure, and they wanted significantly more from you to guarantee the loan. (Banks don't want a "windfall" where you put 75% down and then they end up foreclosing on it. They don't want to be bothered with it. They just want you to make payments.)

I'm not saying its right or wrong. I'm just saying thats they way it has works.

I'm also not judging the situation of the foreclosure. Just a fact, for whatever the reason, its there and that's what changed the whole picture.

You and I are surely on the same page. Well said!

 

[DavesTractor]

Given the conflicting "facts" about credit card use, I gathered my own data.

1. About 29% of consumers had no credit cards in 2014 according to the Federal Reserve (Credit card ownership statistics). If the TBN membership is representative of the general population (and I am not claiming that it is), 7 out of 10 of us have credit cards (assuming the 2017 % does not differ substantially from the 2014 %).

2. According to the ABA (http://www.aba.com/Press/Documents/2016Q2CreditCardMonitor.pdf), among credit card holders in the second quarter of 2016, 43% had finance charges, 30% used their cards but paid no finance charges, and 28% did not use their cards. Once more, if the TBN membership is representative of the general population (and I am not claiming that it is), 3 out of 10 of us are paying finance charges on our credit cards, 2 out of 10 of us are using our cards but paying them off each month, and the remaining 2 out of 10 of us have credit cards but aren't using them (assuming the 2017 % does differ substantially from the Q2 2016 %).

The TBN membership may not be representative of the population, but I call BS (Baloney Sandwich) on the first quote above.

Steve

Thanks for gathering these facts. They are not too far from what I read from a different source. Your breakdown is much better than mine, as I did not account for folks that had no balance on a card, but it was out of lack of use, not due to the fact they paid it off. In any event, it shows that a lot of folks handle cards well, some not so well. But the financially careful person isn't all that rare, whether he is a cash guy or a careful credit guy.

 

[Slowpoke Slim]

Speak for yourself, leave " we " out of it.

Ditto.

Overszd,

And I am calm.

You keep stating that this is an "addiction". Speak for yourself. If you've had problems with credit in the past, and recognized in yourself that it became an "addiction", then that's fine. But you paint with a wide brush Sir. Not everyone that uses credit doesn't fully understand how to use it properly, and for good financial health. Peace to you as well.

You have no power over me to make me "not-calm".

 

[hystyk24]

I think I answered that questioned, but may have buried it amongst too much rambling. Let me be more concise, which is a real challenge.

The downside is that the existing loan was written when you had no flaws in your credit. If that loan defaults, nobody gets in trouble, so to speak, as it was a good risk that just went bad. But if someone now approves changing this loan position, even if for the better, they are essentially making a new loan to a guy with a credit issue and their name is on the approval. If you then default, who approved a loan with a guy with a foreclosure? That is my thought. No one wants to take a personal risk to push for the approval. Even though it might be in their best interest to do so. That is the only reason I can think of. If I owned the bank, I'd have taken your deal and strengthened my position.

And that really stinks about your foreclosure, sounds like this has little to do with ability to pay, and more to do with too much government intervention....but that's another can of worms.

I get that, very well reasoned answer... The downside would be to the loan officer IF I should default. Makes perfect sense. ��

And yes, it was about writing a $4300 check each month on a place where I had limited movement, torn up backyard, no access to the water. Even title insurance company was in the fight. A real mess...

 

[hystyk24]

Thought I should at least show off the glorified golf cart at the heart of this thread...

 

[GAFarmer2]

You guys are killing me. This is a simple question about basic finance and/or good business practice. This is not about weather they should or should not make the loan or weather YOU would or would not write the loan. It's simply about the current loan they have with me and will continue to have with me if they don't do a new deal. The new deal has a balance Smaller then the current one and the collateral on the new being 2.5k more then the current loan. NOT one person has answered the simple question I asked a half a dozen times. What is the downside of writing the new loan? If you can't substantively answer that simple question then you get the point... �� And to address a point or two: what is "getting in deeper" mean? I have one current loan (0% Kubota) which would not have changed with a new deal. I am blessed to have cash and no real need for credit at this point in my life. Keeping at least a single revolving loan open weather you have the cash or not is important for everyone, but not mportant enough for me to keep this bad deal and why I just paid cash. Kubota lost out on the zero turn sale as a consequence... And the foreclosure issue is something not worth exploring here unless anyone has experience with a multi million dollar home on the ICW incombered by CAFRA fights with state and local government over permitting jurisdiction which required me to vacate my then vacation home...

No such thing as a simple question about finance.

The downside, again in my humble nitwited opinion is that you are seen as a risk. They typically won't pull an existing loan... But they will give you **** on a new one. I have two friends in the same pickle.

Not judging or blaming. Not trying to start a fight. You asked for opinions...and I think you got them!

Hope you enjoy the new "toys"!

 

[ovrszd]

Speak for yourself, leave " we " out of it.

I didn't say "you", I said "we". If you don 't think it applies to "you" that's cool. If you don't think it applies to "we" that's "your" choice. Certainly doesn't apply to the majority of bowwers.

 

[ovrszd]

Given the conflicting "facts" about credit card use, I gathered my own data.

1. About 29% of consumers had no credit cards in 2014 according to the Federal Reserve (Credit card ownership statistics). If the TBN membership is representative of the general population (and I am not claiming that it is), 7 out of 10 of us have credit cards (assuming the 2017 % does not differ substantially from the 2014 %).

2. According to the ABA (http://www.aba.com/Press/Documents/2016Q2CreditCardMonitor.pdf), among credit card holders in the second quarter of 2016, 43% had finance charges, 30% used their cards but paid no finance charges, and 28% did not use their cards. Once more, if the TBN membership is representative of the general population (and I am not claiming that it is), 3 out of 10 of us are paying finance charges on our credit cards, 2 out of 10 of us are using our cards but paying them off each month, and the remaining 2 out of 10 of us have credit cards but aren't using them (assuming the 2017 % does differ substantially from the Q2 2016 %).

The TBN membership may not be representative of the population, but I call BS (Baloney Sandwich) on the first quote above.

Steve

I saw your disclaimers in your post above.

TBN members aren't even close to the average consumer in America. So I call Baloney Sandwich on your statistics in regards to the posters on this thread.