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

[Sheldonrs]

Originally Posted by HungLikeJesus

I cleaned out my car and found $2,000.25 in change down the back seat.

Unfortunately, I spent it all on the quarter car wash.

Why would you get just 1/4 of your car washed?

[HungLikeJesus]

Originally Posted by Sheldonrs

Why would you get just 1/4 of your car washed?

It's all I could afford.

[Gravdigr]

Originally Posted by Pete Zicato

...but it's also the fact that many (most?) American families did not save while the economy was good.

That could very well be "could not afford to save, even when the economy was good."


I'm always amused by the number of people who are not aware that everyone is not as well off as they are. A huge slice of America saves nothing each week, because they have nothing to put in the bank. They drive POS cars that need work all the time, because they can't afford a better car. And they bought that POS because they couldn't afford a car in better mechanical shape. They can't fix everything on the car because they have to feed themselves, their kids, their family, pay the electric bill, pay rent because they can't afford to buy.

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. That's right, some of these people don't have $20 left at the end of the month to pay on a credit card balance.

How are legal expenses an emergency?

Now, as you were.

[HungLikeJesus]

Originally Posted by Gravdigr

That could very well be "could not afford to save, even when the economy was good."

I'm always amused by the number of people who are not aware that everyone is not as well off as they are. A huge slice of America saves nothing each week, because they have nothing to put in the bank. They drive POS cars that need work all the time, because they can't afford a better car. And they bought that POS because they couldn't afford a car in better mechanical shape. They can't fix everything on the car because they have to feed themselves, their kids, their family, pay the electric bill, pay rent because they can't afford to buy.

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. That's right, some of these people don't have $20 left at the end of the month to pay on a credit card balance.

...

I'm trying to figure out if this is a judgement or just a statement of fact.

[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

[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.

[Trilby]

Originally Posted by Gravdigr

How are legal expenses an emergency?

If I'm in jail, it's an emergency.

[footfootfoot]

My late FIL used to call it "the high cost of poverty"

[DanaC]

Originally Posted by footfootfoot

My late FIL used to call it "the high cost of poverty"

That's an excellent description.

Right now I could raise it. But that's only because Dad left some money. Before he died, the only way I could have raised it would have been by borrowing off him.

There have been times in my life where I've had decent cash coming in, but never a sustained period. I have generally spent far more time living on the margins of the economy where, frankly, saving was not an option. Living cheap, is a much less cost effective way to live, you get less for your money.

[Griff]

I'd like to see the savings rate plotted with the interest rate in the average savings account. I'm a saver but saving money is a losing proposition.

[classicman]

Well said Digr. I lived that life for about a decade. I couldn't take it anymore and changed my ways and my life. Even while living paychecks to paychecks (3 jobs) I still was borrowing to make ends meet and to feed my family. I bartered anything and everything I could. Its not living.