50% of Americans Couldn't Come Up with $2000

[tw]

Originally Posted by Gravdigr

And why must it be assumed that these people's credit cards are "all maxed out"? The people you are talking about do not have credit cards, because they can't afford the minimum monthly payments.

First, one has a credit card, does not use it, and therefore has no monthly payments. Or one only uses a credit card for amounts that can pay off that month. Either way, the credit card is that emergency $2000.

The argument is valid, but subjective. Do you describe most of the 50%? Or well less than 1%? A problem with all these assumptions is one glaring problem. No hard numbers.

I don't believe most of the 'on the edge' cannot have any credit cards. A credit card that you have and do not use can cost nothing. I would suspect a significant number of that 'on edge' 50% has foolishly used credit cards. It would explain why they enrich the richest with their 20+% interest charges on outstanding balances. And therefore cannot afford any savings.

But again, that is only suspicion based in a lack of any hard numbers. We really do not know why that 50% is close to which edge. And, unfortunately, the article does not even define 'edge'. Does not even define how many Americans have credit cards.
The article implies an American public that is living on large cash flows and few real assets. It is how AIG, GM, Lehman Bros and so many other financially irresponsible companies also lived. It only implies this is worse than ever before. But provides no numbers to make that conclusion. It only suggests a serious problem that has been deteriorating.

Meanwhile, saving numbers in the chart strongly suggest American financial stability has seriously deteriorated.

Do you believe more than 50% of this nation cannot have any credit card? I suspect that is not true. Anybody can afford a credit card by not using it. Then an emergency $2000 fund exists.

[classicman]

Originally Posted by tw

First, one has a credit card, does not use it, and therefore has no monthly payments. FALSE

The argument is valid, but subjective.
I don't believe most of the 'on the edge' cannot have any credit cards.
A credit card that you have and do not use can cost nothing. FALSE

Anybody can afford a credit card by not using it. FALSE

Many companies are canceling credit cards if they are not used and/or the credit rating of the consumer does not meet their standards.

Google is your friend and this has been happening for at least 4 years. Its the "If you don't use it, you lose it" plan

Unrelated statistic - "37% of families are still paying off a credit card they cancelled. "

[Fair&Balanced]

Originally Posted by classicman

Many companies are canceling credit cards if they are not used and/or the credit rating of the consumer does not meet their standards.

Google is your friend and this has been happening for at least 4 years. Its the "If you don't use it, you lose it" plan

Unrelated statistic - "37% of families are still paying off a credit card they cancelled. "

I wouldnt say many are cancelling cards.

I would say it is primarily Capitol One, which also wont accept new customers with high credit ratings and a history of paying off charges monthly and not having any interest or penalty payments.

[Spexxvet]

Originally Posted by tw
First, one has a credit card, does not use it, and therefore has no monthly payments. FALSE
The argument is valid, but subjective.
I don't believe most of the 'on the edge' cannot have any credit cards.
A credit card that you have and do not use can cost nothing. FALSE
Anybody can afford a credit card by not using it. FALSE

Originally Posted by classicman

Many companies are canceling credit cards if they are not used and/or the credit rating of the consumer does not meet their standards.

I don't think either of your arguments is absolute. tw is right that those things can happen, and you're right that it's getting less likely to happen. To categorize his assertions as FALSE is Intellectually dishonest, IMHO.

[Stormieweather]

For probably the first time in my life, I could scrape together $2k right now. I would not have to use credit or sell anything or pay a bill late to do so.

I've spent the last decade (since a nasty divorce and subsequently losing my job) getting square again, financially. I work two jobs, make decent money, RENT a nice house and have no credit card debt. My only debt obligation is 1 car payment. It will be paid off in 2 years and I do not plan to ever finance a vehicle again.

My goal over the next 5 years is to re-establish my credit with carefully controlled credit card spending and save $25k for a down payment on a condo which I intend to finance for 15yrs. At the same time, I will be heavily saving and investing. Once the condo is paid off, I plan to retire.

But for 40 years, I was paycheck to paycheck and always teetering on the edge of financial ruin. Ok sometimes I was deep in the pit of ruin, but I survived somehow. Now I have to find a way to enjoy my retirement years.

Part of doing so involves getting healthy, because who the hell can afford major medical costs or wants to spend their retirement as an invalid? So I quit smoking, am losing weight, began eating organic and non-processed, and recently started running and lifting weights. I don't think I've ever been healthier.

Stormie

[tw]

Meanwhile, Stormieweather described a process that everyone should aspire. A process of moving from debtor to creditor means maintaining a cash flow without 9% and 20+% interest rates.

Originally Posted by Stormieweather

I've spent the last decade (since a nasty divorce and subsequently losing my job) getting square again, financially. I work two jobs, make decent money, RENT a nice house and have no credit card debt. My only debt obligation is 1 car payment. It will be paid off in 2 years and I do not plan to ever finance a vehicle again.

Why would 50% not be able to pay $2000 today? Does that mean 50% are even maxxed out on credit cards? That article does not say - is too subjective.

I believe most can get $2000 at any time. Even a loan shark is an alternative. The article is probably ignoring loan sharks, the 'get money today for your future tax refund' outlets, and other emergency money outlets. But again, we cannot say for sure. The article does not define 'the edge'. Does it even ignore a loan shark option?

More important. Do 50% have no grasp of financial responsibility demonstrated by Stormieweather? The article implies that. I find it difficult to believe 50% are that financially ignorant.

Stormieweather defines what every financially responsible adult aspires. To move from debtor to creditor. Anyone working towards that goal could easily obtain $2000. But resulting fees, penalties, and interest charges would be a setback to the lifelong task of 'moving from debtor to creditor'.

50% of Americans could not even get money from a loan shark? I find that difficult to believe. But again, hard numbers remain unknown. Still it is curious (or distressing) that so many still have so little. Or have been so manipulated by advertising as to make Capital One so profitable.

[Sundae]

Originally Posted by tw

50% of Americans could not even get money from a loan shark? I find that difficult to believe. But again, hard numbers remain unknown. Still it is curious (or distressing) that so many still have so little. Or have been so manipulated by advertising as to make Capital One so profitable.

I think loan sharks were probably not counted, alongside money-making schemes like selling a kidney, whoring kidnapping or becoming a drug mule for the money.

Of course I may be wrong, just guessing.

[glatt]

How do you find a loan shark? Are they in the yellow pages? I guess I don't hang around the right type of people to know.

[classicman]

Originally Posted by Spexxvet

I don't think either of your arguments is absolute. tw is right that those things can happen, and you're right that it's getting less likely to happen.

It is a fact that card companies are canceling dormant or unused cards. They are not making any money on the card if it isn't used. They will extend that credit to someone else who will use it - that is how they make money. They can only extend so much credit and to have it "wasted" on someone who is not using it is not a fiscally sound business plan.

I too was unaware of this until about 2 years ago when a card I kept just for emergencies was canceled without notice.

Originally Posted by Spexxvet

To categorize his assertions as FALSE is Intellectually dishonest, IMHO.

Spreading misleading information and blatant falsehoods is intellectually dishonest. Your ire is also misdirected.

[Fair&Balanced]

Originally Posted by classicman

It is a fact that card companies are canceling dormant or unused cards. They are not making any money on the card if it isn't used. They will extend that credit to someone else who will use it - that is how they make money. They can only extend so much credit and to have it "wasted" on someone who is not using it is not a fiscally sound business plan....

...Spreading misleading information and blatant falsehoods is intellectually dishonest. Your ire is also misdirected.

The big three - Chase, Citi, BOA (who along with Amex represent more than half of all card isusers) - dont cancel dormant cards. Their policy is to provide a notice of pending cancellation unless the customers requests the card to remain active.

It is primarily Capitol One and a few small bank insurers that have a cancellation cause with no recourse.

So I would suggest that your statement is spreading misleading information to some degree.