Model railroading yourself into debt...

[Tracklayer]

I heard through the grapevine this morning that a guy I use to hang out with a number of years ago has gotten himself into trouble by maxing out one of his credit cards, then refusing to make his payments anymore. I remember when we'd go to the train shops how he would buy a $500.00 loco, rolling stock or what ever else he wanted like it was nothing and plop the card down on the counter.

I personally have one card other than my bank card and I try to keep it paid off.

Anyone out there know what this guy is in for other than a bad credit rating ?.

Tracklayer

[talon104]

well depending on his other finance's . I f his other obligations are good probably letters forever,then a bad credit rating. If he is lettnig all his other obligations go down the tubes as well he is most likely looking at bankruptcy ? i guess ?

[Adelie]

If the debt is big enough, litigation, wage garnishment and possible attachment of assets. If it can be proven that he deliberately rang up the debt and is refusing to pay, maybe worse.

[jeffers_mz]

Unlikely a guy who plunks $500 he doesn't have for a locomotive is financially responsible in the rest of his lifestyle. A must have prototype on credit, as part of a long term strategy, maybe, but not when it's a regular thing.

He's painted himself into a corner. Congress just changed personal bankruptcy laws, and it's not so easy to get out from under credit card debt anymore. When the dominoes start falling, he'll either learn the hard way, and then have to drag himself back up by his bootstraps, or come apart completely. Either way, he's in for a rough time.

If he was a friend, I'd have a blunt talk with him. He could still avoid a crash if he buys into a whole new outlook. If he's not listening, I'd tell him I had no choice but to take some big steps back, and exactly why, that I didn't really want to watch what was about to happen. You can lead the horse to water...

[Tracklayer]

QUOTE: Originally posted by Adelie

If the debt is big enough, litigation, wage garnishment and possible attachment of assets. If it can be proven that he deliberately rang up the debt and is refusing to pay, maybe worse.

According to his sister Linda (the one that told me about it), he'd been making his payments up until a couple of months ago, but after being cut back at work, he said he couldn't aford it anymore and just stopped making his payments. I think she said his debt is like $11,000.00... And 99% of what he bought on the card was model railroad related.

Tracklayer

[RoyalOaker]

QUOTE:
Anyone out there know what this guy is in for other than a bad credit rating ?.

Tracklayer

He is in for some hard life lessons. The sooner he learns from them, the better he and his family will be. Some advice I would give is for him to start selling the trains in order to pay his debt.

[Tracklayer]

QUOTE: Originally posted by jeffers_mz

Unlikely a guy who plunks $500 he doesn't have for a locomotive is financially responsible in the rest of his lifestyle. A must have prototype on credit, as part of a long term strategy, maybe, but not when it's a regular thing.

He's painted himself into a corner. Congress just changed personal bankruptcy laws, and it's not so easy to get out from under credit card debt anymore. When the dominoes start falling, he'll either learn the hard way, and then have to drag himself back up by his bootstraps, or come apart completely. Either way, he's in for a rough time.

If he was a friend, I'd have a blunt talk with him. He could still avoid a crash if he buys into a whole new outlook. If he's not listening, I'd tell him I had no choice but to take some big steps back, and exactly why, that I didn't really want to watch what was about to happen. You can lead the horse to water...

I did try to warn him. I asked him way back when if he had ever stopped to think about all the interest he was going to end up paying, but it didn't seem to phase him. I just figured he knew what he was doing and had his finances under control...

Tracklayer

[talon104]

well i'd hate to say it but ,he might have to start clearing house to make up the difference to get himself out of hock. THoe 500.00 trains wont go for that much but it might help him out if he has gotten to that point? I know from experiance this ordeal and have had to get rid of stuff that was mine and i really charished( A Quad comes to mind) because my wife messed up our credit.

[davekelly]

Probably looking at becoming an ebay seller.

[rrgrassi]

Hmmm...Cutback on income should also mean cut back on all NON necessary spending, including on our wonderful hobby.

[MAbruce]

QUOTE: Originally posted by Tracklayer


Anyone out there know what this guy is in for other than a bad credit rating ?

Unfortunately this behavior is typically only the tip of the iceberg of many other problems. One can only use their imagination. [:0]

It’s good to hear that you are a disciplined spender. [:)]

[BRAKIE]

Well,I seen 2 others like him before..Sadly one of them lost everything including his family..He is still in the hobby spending mega bucks..The other guy and his family moved to parts unknown I suppose to start a new life style.I will say though that his wife love living well above their means..

[AggroJones]

If I don't have the straight cash to obtain said item, then I don't recieve said item.

I don't use credit for anything railroad related.

[selector]

QUOTE: Originally posted by AggroJones

If I don't have the straight cash to obtain said item, then I don't recieve said item.

I don't use credit for anything railroad related.

That's the attitude, Aggro. It serves everyone well.

I wonder how their marriage is doing. A woman who likes security and maturity is not going to want to hang on to a child.

[Tracklayer]

QUOTE: Originally posted by MAbruce

QUOTE: Originally posted by Tracklayer


Anyone out there know what this guy is in for other than a bad credit rating ?

Unfortunately this behavior is typically only the tip of the iceberg of many other problems. One can only use their imagination. [:0]

It#8217;s good to hear that you are a disciplined spender. [:)]

The reason I stopped hanging around with him was because of his bad habit of going out to clubs or sports bars. Once in a while is one thing, but not every single night...

As for me being a disciplined spender (ha ha ha ha ha). I'm going to have a hard time trying to live up to that one... I'll put it to you like this. I'm probably the only person in the world that if I won the lottery tonight, I'd be flat broke by this time next week... Sad.

Tracklayer

[AntonioFP45]

It can be a tough issue.

I got myself into deep debt back when I was in my early 20s. I learned the hard way that I should have heeded the advice from my parents and even my wife back then in the 1980s when I became a young adult.

Guys, if you have a relative or friend that's a disciplined spender.....heed their advice. I know that especially for us guys, it can be difficult.

If you want to buy an item with a credit card, make sure you will be able to pay it off within 30 days to avoid finance charges. Finance Charges/Interest are how the bank makes its money off of you, even if there's no annual fee. It's tempting to go "GA-GA" [:p] with a No Annual Fee card but you can easily wind up deep beyond your income to debt ratio.

2. My mom, who only made a low amount of money at her jobs cleaning hotel rooms managed to buy clothes, toys, and gifts for my sister and I as kids.....my dad's check went to groceries and bills. How did she do it???? LAYAWAY! Waiting a little while to get an item can be most gratifying once you see that its paid for and truly yours.

I don't have all the answers here, but to those of you under 22....be aware! The banks/credit card companies WANT to keep you in debt. They're not your friends, they're profit oriented businesses. Believe me......I've been wanting DCC items, more Walthers Budd cars, Sound decoders, and locomotives for the longest. It was worth the wait since now that I've paid off enough debts I can buy and enjoy trains more without sweating over a huge MasterCard over Visa bill.

[MAbruce]

QUOTE: Originally posted by Tracklayer
As for me being a disciplined spender (ha ha ha ha ha). I'm going to have a hard time trying to live up to that one... I'll put it to you like this. I'm probably the only person in the world that if I won the lottery tonight, I'd be flat broke by this time next week... Sad.

Tracklayer

Just as long as you don't spend more than you won. [:D]

Actually not carrying any credit card debt (by paying it off every month) is half the battle. A lot of people I know can't even manage to do this, or pay off their CC debt by refinancing their mortgage. [:0] Don't even get me started on that one! [:(!][:D]

[emdgp92]

I know a few people who think nothing of dropping $500 on an engine...and then another $200 on paint and detail parts. Yeah, the detailing is nice...but I'd rather use that $700 for other things...like rent, gas for the car, food, electricity, etc. I like my toys too, but I'm careful with what I buy. I don't buy the latest toy as soon as it comes out; I tend to wait a bit. They'll go on sale sooner or later. I also don't put hobby stuff on my credit card if I can help it. Once in a great while isn't bad, but for most things, I either pay cash or with a check. There are quite a few things I'd like to get for the layout, but they'll have to wait.

[Roadtrp]

There is nothing I could stress more than the importance of staying out of credit card debt. We have not had any credit card debt for 15 years now, and it makes life MUCH more enjoyable. At one point in time we were $25,000 in debt, and even with a very good income we were living paycheck to paycheck.

I wish I could say it was through discipline and good money management that we got out of debt, but it was not. It was due to an unexpected and generous bequest from my Great Aunt.

Since a person can’t count on such things to bail them out, it is far better to not get in debt in the first place.

[:)]

[Tracklayer]

I always figured if you stopped paying your credit card payments the police would eventually come knocking on your door, arrest and charge you with some type of theft, and that you stood a good chance of going to jail or prison for it, and that was the reason most people didn't try it.

Tracklayer

[dwRavenstar]

Tracklayer,

You've mentioned that he dropped the card at a moment's notice and spends every night running the bars. His income cutback put an end to his credit card payments but has he slowed down on the social endeavor? If he's still running the bars despite the income tightening he's showing foolish and dangerous tendencies in my opinion. If you were lucky you'd stopped running with him before lending him any fundage.

dw

[Anonymous]

Hmmm.. I've known of people getting into financial trouble from gambling, drinking, clothes, cars, partying and many other things. I suppose model railroading is as possible a driver of indebtedness as the need for a collection of Manolos or the need to drive a Benz you can't afford...

It hits close to home. My aunt is about to declare bankruptcy for a 2nd time (is literally counting the days until the 10 year limit runs out!), has no control over credit card debt, is given credit she shouldn't have, and will get a rude shock about the new rules of the game compared to her last one.

And no, I don't think you can connect the situation described it to the hobby any more than you can connect Nordstrom to people who rack up megabucks on fancy clothes. If it wasn't trains, it probably would have been something else.

It's a real shame to see someone in that boat, but at the same time the story is always the same... Friends advised them against it (and were usually ignored or cut off), the warning signs were long in place, etc. and so forth.

If I blame anyone, it's the credit card companies who give out credit limits that are wholly inappropriate for a given person's income, etc.

Kudos to everyone here giving the right message. Credit Cards BAD. Unproductive debt BAD. Let's hope anyone not on the program listens up.

[cbq9911a]

It's too easy to go overboard with credit card debt. The main criteria the credit card companies use to determine if you're creditworthy is having a pulse. That said, credit cards are wildly overused. I've seen people use a credit card for a one dollar purchase at the supermarket!

That said, credit cards allow you to go hog wild buying high end MRR items - until you get the bill.

[davekelly]

Interestingly enough what you owe a CC company is considered one of their "assets." During the S and L crisis many financial institutions with billions in "assets" went belly up.

[Tracklayer]

QUOTE: Originally posted by dwRavenstar

Tracklayer,

You've mentioned that he dropped the card at a moment's notice and spends every night running the bars. His income cutback put an end to his credit card payments but has he slowed down on the social endeavor? If he's still running the bars despite the income tightening he's showing foolish and dangerous tendencies in my opinion. If you were lucky you'd stopped running with him before lending him any fundage.

dw

I met this guy about ten years ago through his sister Linda who I use to date. After she and I broke up, I continued hanging out with him because he was a fellow railroader. But after a while, the bar thing kind of got to be a drag, so I started distancing myself from him a little at a time until I finally just quite going around him altogther. Linda and I still stay in touch, and she keeps me posted on his doings - which haven't changed much since I hung out with him. He's single and makes good money, but he blows it in the stupidest ways...
And no. He never asked me to barrow anything, but I'm sure if he had he would have paid it back as soon as he was able. That's one thing I will say about him.
It's just that I was really shocked that he had maxed his card out like he did, then acts as if he could care less about his future or his credit.
I wish you guys could have seen his layout (the last time I saw it at least). It was an 8 X 12 HO that looked as if it were done by a professional, and made mine look like something that came out of a bubble gum machine... He also had a loco and rolling stock collection that would made any railroader envious.
Oh well. Nothing lasts forever... I wish him luck.

Tracklayer

[Tracklayer]

QUOTE: Originally posted by kchronister



It hits close to home. My aunt is about to declare bankruptcy for a 2nd time (is literally counting the days until the 10 year limit runs out!), has no control over credit card debt, is given credit she shouldn't have, and will get a rude shock about the new rules of the game compared to her last one.

You mean someone else has an aunt like that... I was going to mention mine earlier as an example, then decided not to, but now you've got me going.

My aunt was a city council woman, had a good paying job, nice home, two successful daughters and loyal husband. Unknownst to everyone, she had a compulsive shopping disorder, and would hit the mall every Saturday and would charge up thousands of dollars on clothes, jewelry and junk on her credit cards. It finally reached a point to where she and my uncle started having problems because of it, and the next thing you know, they're divorced. If that wasn't enough, she starts having an affair with a man that's old enough to be her father and then some, and ends up ruining his marriage of 40 years. He was the owner of the local country club and golf course, and died of cancer just a few years after they were married. Within a year or so of his passing, she had gotten so deep in debt that she was sued and lost everything, and is now living in a second hand modile home out in the woods and taking tranquilizers. She also did a couple of years probation while all this was going on for shoplifting...

If there's anyone out there that has a problem like my aunt, please seek help before you ruin your life!.

Tracklayer

[germanium]

One possible way for those who tend to spend above their income is to have one credit card, and ask the credit card company to reduce your credit limit, say to $500.
This would help discipline your spending habits.
Would such a request be actioned by your CC companies in the US, or would they.just ignore the request ??

[Anonymous]

I believe they will do it if you ask - particularly if the option is "or close the account."

The problem is that having one credit card and insisting on a limit within your means requires self-discipline that is already lacking in folks with this problem. Not only do you have to do it, but you have to stick to it: the reality is if you call them and ask you to go back to your prior limit, they'll probably be happy to do that for you too; and you'll no doubt continue to get bombarded with credit card offers that will be very tempting.

I never got myself in real trouble, but did run up a credit card to $1,500... back in the 80's when that was a lot more money and I was in college with no income to speak of. In proportion, it was a pretty serious debt load and I often couldn't make the minimum payment. Thank my lucky stars that one incident taught me and once I got a job I got it paid off pretty quickly.

[DALCruiser]

When I was working, I had a very good income and was single. I had lots of leftover cash each month to spend on my 'Vette and other hobbies (house paid for and no car debt). I started buying train stuff some time ago with the plan to get serious about building a room full of train layout. After an "Early Retirement" my income went to 20% of my old income and too young to touch my IRA or apply for early SS income. It is very hard to readjust my spending habits under these conditions, but I try!! I do use a credit card for train purchases, but I limit my max owed at any one time. I put a piece of masking tape on the card and track it . When I make a purchase I update the current total. I pull out the card just before entering the store and shop accordingly. I do try to pay off the full amount in 1-3 months. I know I'm paying some interest, but that goes with the game.

My son used the "Easy Credit" cards offered when he was in college, and ran up a huge balance on three cards. They had very high interest rates. He even used the cards to pay for his tuition and books. He did not have a very good job and got into DEEP debt. Consumer Credit helped him get on a paying plan that kept his head above water until he graduated and had a higher paying job to payoff the debt. I tried to tell him he was getting in over his head, but sometimes people have to take a fall to wise up. I have never had any debt problems in the 48 yrs I worked and I don't plan to in the future, but credit cards do get used and paid off. You have to use your head and not let it get out of control. Sometimes you have to tell yourself the purchase will just have to wait for a little while longer. [:D]

Dave

[johncolley]

Well, I probably shouldn't talk, because it took me over 60 years to learn that part of being a responsible informed consumer is knowing and heeding your limits! No more credit cards last 3 years!