Model railroading yourself into debt...

[reklein]

Want some good advice on Credit???? Listen to Dave Ramsey on talk radio. He is a staunch proponent of cutting up your credit card and staying debt free ,including you rent and car purchases. How to do it? Live like a pauper so you can live like a king. Buy your trains at swap meets and save a bundle, plus the wonderful selection of stuff. I'm surprised that one of the mags hasn't put up an article on how to shop at those things.

[Anonymous]

QUOTE: Originally posted by 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.

Agreed.

Sounds like lack of self control on trains. A real addiction that can destroy marriages, credit rating etc...

[dwRavenstar]

If it hadn't have been trains it would have been cameras, guns, salt shakers or crack. [B)]

I ran a fast quarter on eBay, $4K in that three months, paid it all off within seven months and have near a hobby shop of kits and detail parts available for any project I start into. BUT I still ran to Wal-Mart and nailed 20 of the $1.67 cars. [8D]

Speaking of those cars. I saw a guy offering them for a starting bid of $4.99 and Buy it Now of $6.99
After exchanging Emails, I offered to sell him all he needed for JUST $3.99 he sent me the following:

"I gather that you think I'm trying to rip off buyers or swindle them some
how. Just because you can buy the cars in Walmart does't mean that everyone
has the opportunity to get them there. I know that if I happen to desire a
particular miniature for my train set that I'm unable to find easilly at the
store, I would be more than happy to pay a small premium to save me the
trouble of searching for it. Obviously, you shop at Walmart and you happen
to see the cars there. It's been a long time since I've seen 1/87 scale
cars in such detail at a department store. I thought that model railroaders
would be happy to purchase them. Maybe I should just sell them at $1.67
each to be nice to them. In fact if you wi***o purchase them you can buy
them for $1.67 each. Just take your cheap***down to your nearest Walmart
and stand in line and pay for them. Thanks for the interest. Have a happy
holiday!"

Needless to say, I headed to Wal-Mart!!!!! Laughing all the way.

dwRavenstar

[conford]

QUOTE: Originally posted by [e-mail]

.... Buy your trains at swap meets and save a bundle, plus the wonderful selection of stuff. I'm surprised that one of the mags hasn't put up an article on how to shop at those things.

I'd suspect that the mags don't report on swap meets because manufacturers and retails are their advertisers. The swap meets undercut these businesses by selling used and close out items. So you just have to find out what's going on in your area and go to those meets. They're great fun, but you don't always get the latest stuff.

To the extent that Model Railroading is a compulsion, someone who is vulnerable to compulsive shopping can get in trouble with Model Railroading, but then some folks have dogs and some are golfers. Any of these can get a fellow into trouble.

Good night
Peter
conford

[rolleiman]

What he Should have done is contact the credit card companies, closed the accounts, and made payment arrangements.. Even with the evil credit card companies, a little bit of good will can go a long way.. What has Already happend, since he is 60 days in default, his interest rate has gone to 25 percent or more, it'll be at least 7 - 10 years before he can finance or lease a vehichle or buy a house. If he's a renter, many landlords are now checking credit histories.. Insurance companies are checking them too and adjusting rates according to what they find. Add to that, in time, the CC company will turn the matter over to a collection agency who will hound him until the end of time.. They've been hounding my dead father for 5 years now. In more extreem cases, they Can and Do, begin reposessing things. He's screwed himself much further than he may realize.. In the home improvement business where people sometimes rely on credit or home equity loans to get work done, you see this kind of stuff all the time. He should spend a little less time becoming a drunken idiot, pull his head out of his ***, and open his eyes as to what he's done to himself.

[Anonymous]

I was not going to say anything further about credit card debt. But here goes.

These last 5 years we ruthlessly fight a war to become debt free. We are down to one year on the last card and basically paid off on everything else.

Credit card offers in the mail are torn up on sight. Do Not Call lists is used against telemarketers and literally everything is cash only now in our home.

The LHS's do help out with a good layaway program against the limited runs/Deadline orders. So there is also Ebay for selling obselete trains to use as seed money for new power etc...

We did discover various ways to trim shopping habits to the bare minimum and still have a decent home. We are not rich and never will be but we have beaten the debts that threatened to destroy our futures.

I do worry that if the majority of debtors fail to afford or pay minimums (Which was doubled recently) across the USA, we might see another S&L failure or worse when the big banks fail under the stress.

[Roadtrp]

My son makes pretty major money (for a 28-year-old) collecting credit card debt for collection agencies. He generally makes 40K + per year and as a kid with only a high school education he would have a hard time making that much anywhere else.

You DON'T want my son on the other end of the line. He's shared some recorded collection calls with me (they legally have to record them) and I certainly wouldn't want to be on the other end of the line. And that is all LEGAL stuff. Many collections agencies are not as discriminating and don't worry too much about what is legal and what isn't. They are REALLY nasty.

Nope... you don't want to end up with your debt at a collection agency. It is far more trouble than it is worth.

P.S. I could never be a collector myself. But the world needs them and my son is good at it, so what the heck?

[Anonymous]

From what I can see this is an open and shut case. If this person puts everything on credit then he should know that he must pay it back with the interest. When you buy something on credit the item is sort of yours to use but then again the final owner would be the credit company. Only once the item is completely paid off is it completely yours. This person who intentionally maxed out this credit card and is refusing to pay it back must not be very smart. He might be able to keep his model trains but he will lose something (asset) somewhere. Credit cards should not be used unless it is an emergency. Credit cards sort of make life easy for the moment but after that reality sets in. Example: I believe that Enron has learned this valuable lesson. Hopefully, this person will learn a valuable lesson in life that life is simply not so easy and can not be put on credit forever.

[Todd McWilliam]

If I buy a locomotive or anything, I pay cash for it.

[Anonymous]

QUOTE: Originally posted by [e-mail]

Want some good advice on Credit???? Listen to Dave Ramsey on talk radio. He is a staunch proponent of cutting up your credit card and staying debt free ,including you rent and car purchases. How to do it? Live like a pauper so you can live like a king. Buy your trains at swap meets and save a bundle, plus the wonderful selection of stuff. I'm surprised that one of the mags hasn't put up an article on how to shop at those things.

Heck, they pulled the calendar that could have listed them, so now how are they going to write an article about how to shop them? I've had a devil of a time finding a club or a swap meet after relocating. Takes time to find the other denizens and hook up with them, meanwhile, can't find a good listing of events, etc.

[Anonymous]

I personally feel that life in many ways is getting tougher for those without willpower.

Credit cards, super sized fast food meals, junk on the internet - everything is there, in your face.

It's getting easier and easier to be a loser.

I racked up credit card debt in college - took a while to get out of it. These days I couldn't even imagine buying anything on credit, with the exception of real estate.

I use credit cards, but just as you'd use a debit card. The bill is definitely paid every month. (I couldn't say the same thing 10 years ago when I was in college, however, I'm sorry to say).

They're just bad. Stay away from them.

[Tracklayer]

QUOTE: Originally posted by Roadtrp

My son makes pretty major money (for a 28-year-old) collecting credit card debt for collection agencies. He generally makes 40K + per year and as a kid with only a high school education he would have a hard time making that much anywhere else.

You DON'T want my son on the other end of the line. He's shared some recorded collection calls with me (they legally have to record them) and I certainly wouldn't want to be on the other end of the line. And that is all LEGAL stuff. Many collections agencies are not as discriminating and don't worry too much about what is legal and what isn't. They are REALLY nasty.

Nope... you don't want to end up with your debt at a collection agency. It is far more trouble than it is worth.

P.S. I could never be a collector myself. But the world needs them and my son is good at it, so what the heck?

The thing is, this guy rents an apartment, drives an old beat up truck that nobody in this world would want but him and only has an unlisted cell phone. He's told his family that he's thinking about moving out of state to live and work with a relative. The collection people are going to have a real hard time tracking him down, and if or when they do, he's probably not going to cooperate no matter what they threaten him with. I think before it's over he's going to end up going to jail if there's anything they can charge him with. He's one of the characters that when he says he doesn't care he means it.

All I can say is - good luck Bill, you're going to need it...

Tracklayer

[loathar]

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.

Credit cards can't garnish your wages. About all they can do is ding your credit. Most of the time they won't even take you to court. I have a bother with $150,000 in bad credit card debt. He just got a 6% rate home loan. The morgage company said his credit was fine.[%-)][%-)][%-)] (and no he didn't declare bankruptcy) I don't get it???
Tracklayer- Only the courts and the government can put you in jail for oweing THEM money. If he's getting badgered by collections people all he has to do is say "Don't ever call this # again or I'll sue you" By law, they have to stop.

[JohnT14808]

I know a guy who carries a balance over $10,000 on a number of credit card accounts. What he does is every time he gets one of those "interest free for 6 months" credit card offers, he opens an account and moves the maximum amount that he can into the new account....interest free for six months, and makes just the minimum payments. He usually gets more offers later, and he constantly moves this indebtedness around the various accounts, rarely paying it off, or paying any interest on it. It must be a nightmare to keep track of it all. But he manages it and hopes to eventually pay it off.

We do use credit cards in our family, but the statements get paid each month. Every once in a while I'll have to leave a balance on a card, but I try NOT to do that.

My son is shopping for a new computer and wants me to buy it for him. I told him to keep saving his allowance, and perhaps to do more paying work around the house and he'll get his computer ( He and I did work up a list of chores he could do for money, but he hasn't started any of them yet.....heheheh.)

We are considering allowing my daughter to have a DEBIT card when she goes to college. Each month, I'll put a set amount into that account for her tuition, books, rent, food, etc. and she will have to make it last the month. I know one family that did this with good success. Taught their son how to manage his money and make it last all month. Only ONCE did he blow through the monthly amount putting on a party and his dad refused to bail him out. I heard it was a hard month but he did make it through. Too bad some people never learn.

[Tracklayer]

QUOTE: Originally posted by loathar

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.

Credit cards can't garnish your wages. About all they can do is ding your credit. Most of the time they won't even take you to court. I have a bother with $150,000 in bad credit card debt. He just got a 6% rate home loan. The morgage company said his credit was fine.[%-)][%-)][%-)] (and no he didn't declare bankruptcy) I don't get it???
Tracklayer- Only the courts and the government can put you in jail for oweing THEM money. If he's getting badgered by collections people all he has to do is say "Don't ever call this # again or I'll sue you" By law, they have to stop.

Thanks loathar. I'll pass this on to Linda to tell Bill.

Tracklayer

[waltersrails]

if buy it on credit as long as you pay your bill on time theres no intrest on most cards you don't pay on time you lose money plan and simple.

[davekelly]

I once called a guy when representing a creditor. The idea was to work out a plan in which the debt could be paid - my client was very willing to work with the guy in order to come up with a workable solution. The guy said "if you want the money - sue me." So I did. He ended up defaulting in court and needless to say his wife wasn't all that happy when the Sheriff knocked on his door to execute the judgement (his brand new boat was in the drive way). Given court costs, the sheriffs' fee, my fees etc etc I think his $5000 debt turned out to cost him something like $6000. My client was very happy - he got his money in full in half the time.

[icmr]

I dont know why people max out a credit card. IMHO you should not have one at all. NSR i disagree with you that they should be used only for emergencies. They should not be used at all. What I am saying is if you aint got the cash now and you know you aint going to have it later then why mess up your credit rating when you can wait, save up the money and get the thing without messing up your rating.



Victor

Happy Railroading.[swg][swg]

[waltersrails]

50/50 on credit cards with me

[icmr]

The only card I will have is a check card.



Victor

Happy Railroading.[swg][swg]

[Anonymous]

Let's not get too extreme here. Debt and credit are both useful financial tools, if you have the maturity and discipline to USE them, not abuse them.

Easiest example: Mortgages. How many folks would own a home without them. You're buying an asset that increases in value (usually). It's as 'good' as debt gets. "If I ain't got cash I ain't buying" would have 90% of the populace renting (probably from the other 10% who took a mortgage to buy income property).

Another one. Much as they're maligned, student loans are a good investment. The average BA holder will earn $1,000,000 more over a career than a HS Diploma holder, per the federal govt. So yeah, borrowing $60K for school that ends up costing you $90K overall is painful. It's a bi*tch making payments when you're just working and not making much.... But anytime I can invest amount X and get back 10X over a reasonable time frame, I'll do it. Not to mention all the additional benefits the extra income gives you... such as being able to avoid debt!

I do think Credit Cards have there place, though I'd recommend "charge" cards instead, e.g. American Express original green card, i.e. you gotta pay it each month. Such "revolving" credit can actually be a very good way to track expenses and manage your money, rather than a wad of ca***hat 30 days later you're not quite sure where it all went.

The core of the problem is we, as a society, don't teach our kids how to manage money. I know of no high school or college that makes "how to balance your checkbook" or "the power of compound interest" or "how to make and stick to a budget" as required courses... or at all for that matter... My kids won't suffer from that deficiency because I'll teach them this stuff myself... Too few do.

[Anonymous]

QUOTE: Originally posted by icmr

I dont know why people max out a credit card. IMHO you should not have one at all. NSR i disagree with you that they should be used only for emergencies. They should not be used at all. What I am saying is if aint got the cash not and you know you aint going to have it later then why mess up your credit rating when you can wait, save up the money and get it without messing up your rating.



Victor

Happy Railroading.[swg][swg]

Victor -

Understand that credit ratings are a device invented and supported by the finance industry. They are skewed to how they WANT you to behave to maximize their profit. For instance, working on a cash basis is about the WORST thing you can do for your credit rating. Paying off your credit card each month will give you a LOWER score than paying regularly but carrying a balance.

Why? They like earning the interest of you carrying a balance. The people who are the best financial-manager of their budget are often NOT those with the highest credit ratings, and the people who are slightly irresponsible (i.e. more debt than they should have, but manage to keep making payments) will often have very high scores and get offered MORE credit.

That's how you get these stories of "she was in trouble but they just kept offering her more credit"... It's almost like dealing drugs... once they see you're an addict, they view you as a "prime customer"...

Just wanted to clarify that a "good credit rating" and responsible financial management are _not_ necessarily one and the same.

[waltersrails]

i agree for the most part.

[icmr]

So do I.



Victor

Happy Railroading.[swg][swg]

[sleeper33]

no card no debt no problem

[dragenrider]

Wow, what a topic. I've been down that debt road, too, and it ain't fun. [V]

I bought audio books by Dave Ramsey and John Cummuta and followed their advice. All my credit cards and bad debt are paid off and I have an emergency fund for those bad times. I hope to pay off my home equity loan in April. That'll leave just the house as a debt. [tup]

I used to grab the credit card whenever I was in need of my hobby fix and didn't have the cash. My railroad purchases sometimes were lacking in financial wisdom. But, now I don't buy anything I can't pay off when the CC bill comes.

I'm happy to say I manage my hobby spending better. I take a set amount of ca***o each train show. When it's gone, I'm done spending. Sometimes I have to make choices over which purchase is the most important, but in the end my financial freedom is always my highest priority.

[vsmith]

Credit Cards are EVIL

You hear that kids? EVIL! The card companies actively encourage you to go into debt, with free gifts if you spend X amount a month. Dont believe them and dont go down that road!

Went all the way thru college living on $40 a week, graduated, got a job, and then a credit card with a $1000 limit which was used like free cash whenever I couldnt get to a bank or out with friends and ran a large bar or dinner bill, whenever i got close to the credit limit, the holder just raised the limit, within ONE year I had $3K on that card and then got stupid and instead of paying it off just got 2 other cards. I luckily came to my senses before it got real bad and sloooowly started paying off the cards, eventually paying each off and cancelling all but one card, also if you miss ONE payment or are even late ONE day on you payment they jack your interest rate sky high! This is common considering that most card holders will INTENTIONALLY not process high balance members on-time payments till AFTER the due date so they can stick them with the higher rate and hence higher profits! This guy has no one but himself to blame, some people just can't control their spending.

Just an aside, I had a buddy in college, whos then girlfriend- he told me, had over $40K in credit card debt ! He said her father told him he was hoping she would get married, so someone else could take over the payments!

Luckily for my buddy, she dumped him for some other guy, poor guy!

edit PS $50 a paycheck was my RR budget for many years, even now I stick to it.

[cwclark]

it's not a good thing for sure...My ex-wife(another reason I divorced her from the other many reasons)... got herself a credit card in my name and for some reason went to town with it maxing it out ..what's going to happen?...well for one thing the phone calls from the creditors will be relentless, and after that it goes onto your credit report and if your credit is too bad you can forget about purchasing anything on credit for the next 7 years..she was hiding everything from me and the way i found out was that the phone calls started..I eventually paid off the debt at a lower interest but even up to 5 years ago, my credit card score was low because of the "late" payments and it was still hard to get credit even after everything was caught up...today i have great credit (finally got rid of the root problem 15 years ago..my ex wife) and i'll never let it get that bad again ...I have my own credit cards now and my wife has hers and we both agreed that the credit cards aren't in each others name...i've never personally used a credit card in my entire life before until reciently (last three years) and i'm very careful with it...in fact, i need to purchase some stuff with it right now but won't until i pay off my previous balance from last month...credit (or lack of) can get you into more trouble than you really want to bargin for...chuck

[IRONROOSTER]

I agree with staying out of credit card debt, like I others I learned this the hard way.

But there are some things about check cards that you should be aware of.
1. When you make a room or car reservation, a hold gets put against your card. If you're using a check card this will tie up money in your bank account. Even if you later cancel, it make take a little while for the creditor to clear the hold. Same if you buy something on your check card and return it. With a regular credit card some of your credit limit not your money is tied up.
2. Rip off'ed card number, a form of identity theft. Twice I have had my credit card number fraudulently used by, I presume, the clerk who processed my order. Once when I ordered over the telephone and once when I bought something at a store. Fortunately in both cases, the card company caught it immediately and I didn't have my money tied up. But that's not always the case.

As a result, I have a credit card that I use for traveling, phone orders, mail orders, internet orders, or local orders where the clerk/waiter/etc. has to take the card somewhere else to process it.

It's also handy emergency cash if you need it, just pay it off before buying any extras.

Enjoy
Paul

[DALCruiser]

Chuck

I don't know about Texas, but in California it doesn't matter if the CC's are in your spouse's name: If you're married the debts are owed by both persons. Here if your wife runs up a bill for $100,000 in her name, YOU owe the debt!!![banghead] The only thing that can get you off the hook (possibly) is if they run up a big debt a couple of days before filing for a devorce. A friend of mine had this happen when his wife bought a new car then filed for devorce 2 days later. The devorce Court Judge really chewed her out and told her SHE was to pay for the car herself[:D].

Dave