Model railroading yourself into debt...

[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.

[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.

[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

[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.

[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.

[Todd McWilliam]

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

[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.

[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]

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.

[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.

[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

[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

[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...

[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.

[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!

[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

[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.

[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 ??

[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

[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

[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.

[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.

[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.

[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

[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

[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.

[:)]

[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.

[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]

[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.

[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