Post # 77
“I don’t understand car debt.”
As a 21 year old, I had a car that my mom had given me when I was 16. Good old Toyota Camry, almost 100k miles, no wrecks, pretty good shape…but because of its age & mileage, little things were going wrong. I know NOTHING about cars. I was living in a college town away from home & every single time something went wrong with my car, I had to call my dad who was states away to ask him what to do. My mechanic back home was awesome & most of the time could fix whatever was wrong and it wasn’t even too terribly expensive…but after about 8 times where my car broke down/overheated/wouldn’t start/wasn’t running right/whatever else, I started getting anxious every single time I got in the car. We traded it in and got a new (used) car with 3,000 miles on it and I took on a car payment. HAPPILY. I don’t feel anxious getting into my car, it’s reliable, and I just feel like a huge weight is lifted off of my shoulders. I don’t think I’ll ever be the type to drive a car into the ground because I need reliability. That may cause me to have a car payment at times, though I’m trying to save up enough that when I need a car I can pay in cash or finance a very small amount. Just wanted to give MY reason for having car debt
Oh, ETA: I drive a little corolla now. I probably will always drive a similar car, be it a honda, hyundai, toyota, whatever. I priced around and found the best car I could get “new” for as little money as possible. I plan to always do this. I’ve NEVER understood going into significant debt for an expensive flashy car….it dawned on me that maybe that’s what you were talking about. I won’t even let my SO get a Ford F150 like she wants because it’s seriously unnecessary for our lifestyle. I’ve told her when she makes over 100k then she can get it lol
Post # 78
I’ll admit that I don’t get why people need car loans. If you have no money, why do you need a new car? Can’t you just buy a beater for a few years and save up? Every car my family has bought is used, some really fancy, and others are like the one we bought for $500 (which we used for 3 years, put no money into, and sold for $750). I guess that is just my perspective though. Student loans and mortgages are ok debt in my opinion, but CC debt is avoidable. I’m Canadian so I can’t weigh in on medical debt.
Post # 79
No one wants to be in debt. However using credit to your advantage is a great thing, and can be better than using cash in quite a few situations. I don’t even know how a lot of you resopnding that mortgages are the only acceptable debt can get even GET a mortgage without using credit cards and regular installment loans. That makes no sense to me, you can’t get a good rate without a good credit history.
Anyways, I have 4 credit cards, and I use credit cards for *every single purchase* (including bills) because all my cards have great rewards and I end up with a lot of cash back. But I also treat them like debit cards, I don’t buy anything I can’t afford with cash and 3 out of 4 get paid in full BEFORE my statement cuts every month. I let one card report to CRA (it gets paid after the statement cuts but before the due date) and switch up which card gets to report every few months so they are all active and reporting but my utilization rate is around 5%. My credit is awesome.
My last 2 cars have been paid in cash, which is a desicion I regret now that I’ve realized it’s been a few years since I’ve had an installment loan. So I will probably buy a new car soon and apply for a loan (I need one anyway, so it’s not just to boost my credit).
Neither Fiance or I have any oustanding debt, both have paid student loans, I had some medical debt that was paid off many years ago. I checked off every box except borrowing money from family and personal loans. As I said before, no one wants to be in debt, but you gotta do what you gotta do. Fixer upper houses here start at 600k, so there’s no paying for that in cash, we might as well get the most kickass rate possible.
Post # 80
My fiancé and I have our fair share of debt. We have my student loans, his student loans, my car, my 2 credit cards, and his 2 credit cards. That’s sounds like a lot, but neither of us come from upper class families. Both sets of parent have had their fair share of debt as well. My fiance was fortunate enough to receive grants and OHLAP for the majority of his schooling, whereas I had to take loans to pay for mine. We have a plan for knocking out our debt individually before the wedding and then as a team after. He will need a new vehicle in the next year or two, but hopefully our credit card debt will be non existent by then!
Post # 81
I’m always surprised by how many people put car loans on their “ok” list.
For me, it’s just morgage and student loans that I can get on board with. That said, I don’t condone the way they are often used. Both should be used if you are going to get a good return on the money, and only to supplement your best efforts to earn and save the money in advance, and then should be paid off as quickly as possible.
I’m also surprised by how common it is for people to not feel they can control themselves with credit cards. I guess more rewards for me. I put everything on my credit card becasue I feel MORE acountable for spending when there is an automatic electronic record of it. To me cash feels too intangible. (But I always pay it off in full with no interest or fees incurred, so this is not debt.)
Post # 82
Mortgage, and emergency health, car and student loan within reason. You dont need $100k+ degree in an obscure field, or an Escalade but resonable debt and paying it off is required for credit. I wish we could pay off a house in cash but that isnt feasible. However we will be saving until we have a 20% down to decrease the interest. We both got under grad without debt but it is unlikely we will be able to get all my grad work without a small loan. But again, not going to an ivy league gor a $20k a semester degree. It is well recognised in my field but also not insane expensive.
Post # 83
I’m OK with mortgage debt.
Student loan debt – well my theory is to work as many hours as possible a job that produces income whie you’re going to school, so that you have to take out the least amount of loans as possible (we’re talking standard degrees here, not medical doctors).
Car debt – next year I’ll be in the market for a car and I plan to pay cash. I do not believe in taking on car debt. H took on car debt before we met but he paid if off in 3 years. His car is nicer and for road trips.
Credit card debt – pay if off at each due date and that is fine.
Post # 84
I said mortgage, student loans, and credit card with benefits. I’d also say emergency medical debt…I mean…what can you do about that, die?