How Are You Coping With the Credit Crunch?

[Holdfast]

Aside a fairly big hit to my equity portfolio over the last year, everything else is OK. Fingers crossed things stay OK!

Being a greedy capitalist pig with two mortgages on tracker rates (both set at the Bank of England base rate, with no collar), I'm benefiting a lot from all the interest rate cuts. Even better, one of those mortages is for a buy-to-let interest-only, so I'm making quite a bit from the difference between the rental income & the mortgage payments. The other mortgage is an offset repayment, so while those payments haven't fallen as heavily, I'm paying off a lot of capital every month right now.

But as I said, my stock market investments have definitely suffered. I'm hoping that now all the bad news is more or less out there as a known variable, we might start to see an upswing in the market over the rest of the year, but I'm not massively hopeful we'll do more than tread water. And the reduction in equity left in my houses combined with the tightened credit means that I can't increase my property portfolio in the way I planned, despite the beneficial effects on my mortgage rates.

All told, while I'm OK right now (touch wood), I'm not really moving forward much. I would, on balance, definitely prefer for us not to be a recession!

 

[RoJoHen]

I find myself buying stuff online a lot more and then going "Fuck!" once I hit the Confirm Payment button.

I shouldn't be allowed to access my bank account. I splurge far too often.

 

[Mr. Laser Beam]

That's why it's good to use all your cards every once in a while so that they remain active. It's good for your credit score.

In what way?

My credit card balances are almost always zero. So if you're talking credit utilization ratios, they will also be zero; provided this is the case, I can cancel a card, let it go inactive, etc., and it will do precisly sod-all to my credit score.

 

[Holdfast]

I find myself buying stuff online a lot more and then going "Fuck!" once I hit the Confirm Payment button.

I shouldn't be allowed to access my bank account. I splurge far too often.

If you're the kind of person who spends whatever they have in their current account, you might think about setting up a separate savings account and a standing order to automagically transfer a set sum every payday into the savings account and away from temptation.

(someone else can translate those UK terms for kinds of bank accounts & transfers into American! )


I got some good financial news - turns out that I'd forgotten to claim a particular relief and so I'll get a tidy tax refund once I finally get round to filing last years return later this month. And no need for a payment on account later this year either!

 

[Tim]

That's why it's good to use all your cards every once in a while so that they remain active. It's good for your credit score.

In what way?

My credit card balances are almost always zero. So if you're talking credit utilization ratios, they will also be zero; provided this is the case, I can cancel a card, let it go inactive, etc., and it will do precisly sod-all to my credit score.

Then you're not actually using credit. Yes, you want the utilization ratio to be low, but you should still have activity if you wish to build credit (and you do wish to do so).

 

[RoJoHen]

I find myself buying stuff online a lot more and then going "Fuck!" once I hit the Confirm Payment button.

I shouldn't be allowed to access my bank account. I splurge far too often.

If you're the kind of person who spends whatever they have in their current account, you might think about setting up a separate savings account and a standing order to automagically transfer a set sum every payday into the savings account and away from temptation.

(someone else can translate those UK terms for kinds of bank accounts & transfers into American! )

I actually do have an account like that. My new bank forced me to do it (which is fine by me, because now I have a separate savings account that I never touch).

I'm not that bad, though. Most of the time I don't spend much money on anything, but I occasionally feel the urge to buy things, and I rarely have the will to stop myself. I think it's better for my mental health to just let myself splurge from time to time.

 

[Tim]

Aside a fairly big hit to my equity portfolio over the last year...

Yep. I generally need a snifter of brandy each time I check the value of my IRA. However, right now I'm using this to my advantage to buy more stock in small increments each month.

 

[Mr. Laser Beam]

That's why it's good to use all your cards every once in a while so that they remain active. It's good for your credit score.

In what way?

My credit card balances are almost always zero. So if you're talking credit utilization ratios, they will also be zero; provided this is the case, I can cancel a card, let it go inactive, etc., and it will do precisly sod-all to my credit score.

Then you're not actually using credit. Yes, you want the utilization ratio to be low, but you should still have activity if you wish to build credit (and you do wish to do so).

I do have activity. But when I find myself using the cards (maybe once every few months), I always pay off the balance in full each month.

 

[Tim]

In what way?

My credit card balances are almost always zero. So if you're talking credit utilization ratios, they will also be zero; provided this is the case, I can cancel a card, let it go inactive, etc., and it will do precisly sod-all to my credit score.

Then you're not actually using credit. Yes, you want the utilization ratio to be low, but you should still have activity if you wish to build credit (and you do wish to do so).

I do have activity. But when I find myself using the cards (maybe once every few months), I always pay off the balance in full each month.

So we are on the same page. Incidentally, if you have activity, then cancelling an account will lower your utilization ratio and thus your score (plus, it may shorten your effective credit history if you cancel a long-held card).

 

[GMac]

No major debts (such as a mortgage or credit card balance - the latter's always paid in full each month) to worry about and I have a pretty secure (if rather badly paid) job so my biggest worry is the decline in my savings income following the sharp cuts in interest rates (which are hitting a lot of savers, particularly pensioners, at the moment). Come the end of the tax year I'm going to have to look at what options are open to earn a half-decent return on my savings capital. Other than that, I've just tightened my belt a little and trimmed my non-essential spending.

GM

 

[Rarewolf]

My family will be hit hard by the interest rates later in the year - most of the money was in fixed rate deals that expire in the next few months.

I'm slightly fortunate that most of my money was tied up in Iceland last November, when I wanted to spend it Got it back a few weeks later. But having to go without has given me a new sense of patience. So whilst I have money to play with now, I'm spending as little as possible. When I was getting so much a month interest I has happy to 'waste' some of it.

Everything I do buy seems to have gone up since the VAT cut, and things like tickets remain unaffected. Yet I'm sure they'll use its return to it's old rate this December to bump things up a few more pennies.

 

[Holdfast]

Aside a fairly big hit to my equity portfolio over the last year...

Yep. I generally need a snifter of brandy each time I check the value of my IRA. However, right now I'm using this to my advantage to buy more stock in small increments each month.

Probably a good idea. The market's probably been bumping round a range towards the bottom of this cycle for the past 6 months or so.

I'm slightly fortunate that most of my money was tied up in Iceland last November, when I wanted to spend it Got it back a few weeks later.

Glad you managed to extricate your assets from that mess.

 

[Mr. Laser Beam]

Incidentally, if you have activity, then cancelling an account will lower your utilization ratio and thus your score (plus, it may shorten your effective credit history if you cancel a long-held card).

But if my balances happen to all be zero when I cancel an account, it won't matter, right? Since the ratio will also be zero at that time.

 

[propita]

Like many here, the main hit we've taken was in our retirement savings (IRAs and 401k's)--but we hope to not need that for another 15-20yrs.

We have 3 cards: AMEX, MC, and Macys (to get news of special card-only sales). They're paid in full every month, except those delay-payment/no-interest things from Macys. Those we pay off before interest accrues anyway.

One car paid for, the other about $5K. House has another 17yrs, owing ~$180K (remember, I'm in CA). Student loans, mine and Hubby's, ~$30K at most, so likely paid w/i 5 yrs.

We've had a card cancelled on us for lack or use--we never activated it, so who cares? We've had limits raised and lowered--I've pretty much cancelled those cards anyway.

Mostly, no changes. We didn't waste that much money before, so lower prices are just helping.

I agree with the OP that offloading manufacturing to China was a big mistake. US companies and banks paid for that commercial infrastructure, allowing China's budget to go to their military. And then the companies that put manufacturing in China get upset when those same plants are run at off-hours to make fakes! Tough on you guys--that likely wouldn't have happened to this extent if the manufacturing had stayed in the US, mostly because China wouldn't've had the plants to make the high-quality fakes. Not being racist on China, maybe a bit nationalist though.

 

[CaptainHawk1]

Heh, an interesting thread given my our current troubles. I'm omitting names for reasons that will become apparent.

Are we in trouble financially? Nope.
Are we in danger of losing our jobs? Nope.

Our problem is that the downturn has made collection agencies desperate. In the last two years I've had a rather nasty crash course in dealing with junk debt collectors to the point where we're suing two of them and well on the way to filing a lawsuit against a third.

This all began after we filed a change of address for my girlfriend when we moved to California. Suddenly, we started getting phone calls demanding that she pay back a debt on a credit card. The thing was, she had never owned a card by the company in question, and while the name matched, the social security numbers didn't. What we learned as we researched into the matter was that there are numerous companies out there who buy up charged off accounts that more reputable collection agencies and the original companies deem impossible to collect. They do this for PENNIES on the dollar, and then try to collect the full amount plus whatever "interest" and "penalties" they can tack on.

So, we start getting these calls, and I do the research. Immediately, we send them a letter disputing the debt, which requires them to provide evidence (as in a signed document from the original credit card company) within 30 days as per federal law. They didn't, but the calls continued and turned right down nasty including threats to take everything we have or to sue us. These threats are, of course, highly illegal when no follow through is forthcoming, and we finally ended up getting a lawyer. I think he musta skipped down the street as it was easily demonstrated that the girlfriend didn't owe the debt. We filled a lawsuit.

The thing is, that hasn't stopped it. This company simply sold the alleged debt to another bottom feeder who began the cycle anew. We did the same thing, eventually filed a lawsuit, and they sold the debt to yet another one of these scumbag agencies. This last one began their first call with "Oh, I'm glad I caught you before the sheriff served you with papers." Of course, no papers were ever served, and this, and other illegal behaviors, have prompted what will be a third lawsuit, but this getting bad. A lot of our time is spent dealing with these assholes, dealing with court proceedings, and disputing their constant illegal attempts to "age" this debt on her credit report to avoid the statue of limitations or to keep it off altogether since it isn't her fucking debt.

Seriously, we may come out ahead in this with several lucrative lawsuits, but it isn't worth the harassment. My advice is to watch your credit reports, and if ou run into them do the research and hammer away at them.

As someone who is in the legal field, I'm disgusted by what I just read to the point where I want to vomit. You need to seriously contact the California Attorney General's Office and the FTC and I don't care if they sell the debt to someone else or not... continue to go after them.

Also, they can't "age" the debt to avoid the statue of limitations. That's a myth. The debt can only be collected within 4 years (in California) of the date when it originally went bad.

They assume people don't know their rights and will just pay them while they violate all the laws on fair credit reporting and debt collection.

You've got to seriously follow through with this.


-Shawn

 

[Tim]

Hmm...one of my CCs summarily lowered my credit line because I don't use the card enough. Well, I don't use it enough because their rewards program sucks and they don't have a virtual account number feature!

 

[TedShatner10]

I agree with the OP that offloading manufacturing to China was a big mistake. US companies and banks paid for that commercial infrastructure, allowing China's budget to go to their military. And then the companies that put manufacturing in China get upset when those same plants are run at off-hours to make fakes! Tough on you guys--that likely wouldn't have happened to this extent if the manufacturing had stayed in the US, mostly because China wouldn't've had the plants to make the high-quality fakes. Not being racist on China, maybe a bit nationalist though.

Then there is the lead toys and toxic milk, in addition to the tremendous ecological damage the corner cutting Chinese factories make (the smog in Beijing got so bad they had to shut scale back industrial activity to hold the recent Chinese Olympics).

 

[SeerSGB]

Right now, just trying to sock money back. Since it looks more and more like my wife might get laid off (customers are coming and saying they're getting e-mails and flyers from corp. saying "final days" or "Final weeks" sales, but the DM is playing dumb. Or she may fall pry to the current new tactic of the company*. Luckily, we have a lot of our debt unsecured and/or covered up in termination/layoff protection insurance. So they can either kick in the insurance, take a few cents on the dollar, or bugger off and force us into Ch. 7.









* -- They're sending loss prevention specialist from store to store to pull tapes of the last few months, then taking the least little thing and writing it up as "loss prevention violation" or "security issue". Person gets fired, then when they file for Unemployment the tapes are "lost" and the company doesn't show up at the appeal.

 

[G2309]

I'm out of a job in two weeks. Maybe get me to do some more writing again as I've always wanted.[/FONTI wrote this as a bit of fun about a credit crunch in Star Trek. (Yes I know there isn't money in the 24th)
http://telewatcher.com/science-fiction/star-trek/star-trek-credit-crunch/

 

[Lookingglassman]

I'm not hurting at all. What few stocks I do own I never pay attention to. I was smart enough to buy a house I can afford with a low fixed interest rate and I paid off all my credit cards and my car so my only bill is my mortgage payment which is real low.