# How much credit card debt?



## elefantfresh (26 Sep 2006)

As we all know, we as a nation are up to our eyeballs in debt - a lot of which is credit card debt. Speaking to a fellow work mate about the future of his SSIA money he says he'll "pay off some of my credit card". I find this quite shocking - how much debt can he be in on a credit card??? What is everyone doing with them? Now i'm no holy joe and i use my card (singular) sensibly and generally pay it off each month handy enough - but what sort of debt are people in on these things?


----------



## miju (26 Sep 2006)

i know mine has 2k on it , usually paid off in full every month but had a nasty car repair bill and motor tax all in one month which temporarily put paid to that


----------



## ClubMan (26 Sep 2006)

[broken link removed]


----------



## liteweight (26 Sep 2006)

Maybe he has a small SSIA..minimum per month!! Credit card debt must be shocking at this stage. A number of people have already posted their worries with regard to same. Personally I'm allowed to spend up to 15K at the moment. I've never done this, nor would I!!!


----------



## elefantfresh (26 Sep 2006)

Its nuts! I'm terrified of mine and its only 1600e!! I wanted one for flights and online stuff and requested a card for 500e but the lowest they'd give me was 1600e. 15k at the drop of a hat? no thanks!!


----------



## ClubMan (26 Sep 2006)

Another _CB _report that may be pertinent in the context of this discussion:

[broken link removed]


----------



## liteweight (26 Sep 2006)

Interesting reading Clubman.


----------



## walk2dewater (26 Sep 2006)

In NAmerica the ccard culture is out of contol.  After living in Vancouver for years I have 3 credit cards and two lines of credit (i.e. overdrafts).  Between them I could borrow almost CAN$100k, at something like 14% mind you.  These all started out at 5-10k limits, gradually raised over time.  I'm told it is worse in the States.  I am good with money, but during university (6yrs of) I got in some bother with ccards.  It is vvvvvery easy to put it on the card.  I can only imagine what some short-term thinking cubs of the Celtic Tiger do with their ccards.


----------



## bren2002 (26 Sep 2006)

Currently 6.5K, it gets transfered around the 0% deals.  But it's only that high becasue I went on a round the world holiday and it only ever goes down.


----------



## ClubMan (26 Sep 2006)

walk2dewater said:


> In NAmerica the ccard culture is out of contol.


Be that as it may a _CC _holder always has the power not to incur debt and to restrict themselves to using the _CC _as a cashflow management tool rather than a short/medium/long term source of borrowing/credit. Those who cannot manage _CCs _prudently should avoid them. No point in blaming others for their financial problems.


----------



## walk2dewater (26 Sep 2006)

ClubMan said:


> Be that as it may a _CC _holder always has the power not to incur debt and to restrict themselves to using the _CC _as a cashflow management tool rather than a short/medium/long term source of borrowing/credit. Those who cannot manage _CCs _prudently should avoid them. No point in blaming others for their financial problems.


 
Ccards appeal to a short-term mentality. Some forms of credit are simply dangerous, such as ccards and IO/100% mortgages. In fact I would say that any loan that doesn't discipline the debtor to regular and high repayment of principle falls into the dangerous category. Paying back is HARD, and ironically it gets harder the easier you try to make it by putting it off. These lessons are hard to teach young people who typically overestimate their ability to repay.

Is it really good to have a society with heavily indebted youth? Is that good for you, me or Ireland Inc.?


----------



## ClubMan (26 Sep 2006)

walk2dewater said:


> Some forms of credit are simply dangerous, such as ccards and IO/100% mortgages. In fact I would say that any loan that doesn't discipline the debtor to regular and high repayment of principle falls into the dangerous category.


I disagree. It's horses for courses. Some forms of credit may involve more risks than others but to describe them as inherently dangerous without reference to the fact that the borrower has some responsibility for choosing the most appropriate form for their own specific needs is ridiculous in my opinion.


> These lessons are hard to teach young people who typically overestimate their ability to repay. Is it really good to have a society with heavily indebted youth? Is that good for you, me or Ireland Inc.?


Do you have any hard figures for the indebtedness of _Ireland's _"youth"?


----------



## walk2dewater (26 Sep 2006)

ClubMan said:


> I disagree. It's horses for courses. Some forms of credit may involve more risks than others but to describe them as inherently dangerous without reference to the fact that the borrower has some responsibility for choosing the most appropriate form for their own specific needs is ridiculous in my opinion.
> 
> Do you have any hard figures for the indebtedness of _Ireland's _"youth"?


 
Well, some horses know more about certain courses, don't they? But anyway lets agree to disagree on what constitutes dangerous. Personally, Im not in any credit-related danger, I havent paid a penny in interest or credit fees to anyone for a very long time.

"Youth" in my world is anyone under 35. I've read somewhere that in Ireland they have a lot of debt. Something to do with house prices and "getting on the ladder" and all that.

Regardless of how or why the under 35ers are heavily indebted, IMO this is simply not good for Ireland Inc.


----------



## ClubMan (26 Sep 2006)

walk2dewater said:


> "Youth" in my world is anyone under 35. I've read somewhere that in Ireland they have a lot of debt. Something to do with house prices and "getting on the ladder" and all that.


Yes - but any *hard facts* on the actual indebtedness of under 35s?


----------



## walk2dewater (26 Sep 2006)

ClubMan said:


> Yes - but any *hard facts* on the actual indebtedness of under 35s?


 
Sorry all out at the mo, will have a look later. But are you suggesting that all those youthful commuters from commuterville ARN'T up to their eyeballs in mortgages?


----------



## ClubMan (26 Sep 2006)

walk2dewater said:


> But are you suggesting that all those youthful commuters from commuterville ARN'T up to their eyeballs in mortgages?


Many young people that I know own their own houses and still seem to have lots of money to spend on discretionary stuff. But I prefer to draw conclusions from objective facts rather than subjective and anecdotal evidence as far as possible. Let me know if/when you have some of the former.


----------



## elefantfresh (26 Sep 2006)

But isn't the mortgage debt different to the cc debt? Or are these folks financing their lifestyles via the cc and paying the mortgage via pay slips?


----------



## ClubMan (26 Sep 2006)

elefantfresh said:


> But isn't the mortgage debt different to the cc debt?


Indeed. Obviously mortgage debt is at least secured on a tangible asset used as collateral while _CC _debt is unsecured and usually at much higher rates of interest. As I said before - horses for courses.


----------



## walk2dewater (26 Sep 2006)

ClubMan said:


> Many young people that I know own their own houses .


 
Hard facts please!?? LOL

MOST under-35 "homeowners" own nothing but a massive mortgage and the privilege to spend hours a day travelling to and from it.  There's a statement that needs no academic research.  And IMHO, pretty soon that mortgage will be greater than the market value of the house.

Anyway, werent we talking about ccard debt specifically?


----------



## momomo (26 Sep 2006)

walk2dewater said:


> MOST under-35 "homeowners" own nothing but a massive mortgage and the privilege to spend hours a day travelling to and from it. There's a statement that needs no academic research.


 
As an "under-35",I think it would need research cause i dont spend more then 20mins travelling to and from my home.


----------



## walk2dewater (26 Sep 2006)

momomo said:


> As an "under-35",I think it would need research cause i dont spend more then 20mins travelling to and from my home.


 
I'm about 30mins walk myself, nice isnt it? But if you're under-35 and a mortgage-owner I doubt we're in the majority.


----------



## quinno (26 Sep 2006)

We have €600 at the moment on the CC, that's enough to give me sleepless nights   - some purchases for baby Quinno, and it'll be cleared really soon. We'd saved up for the likely things like prams, cots etc, as well as the consultant's fee, so we did pretty ok.

I generally like to save for things - recently I indulged in a rather expensive hi-fi, but it's one of my things and I had saved up for probably 6 months or so for it. It would have been easier to 'flash the plastic' but I wouldn't dream of it - it sickens me to see an interest charge on the CC if it happens.

It's an interesting thought about the negative equity situation of mortgages. Based on the (inflated) value of our house against what mortgage we have outstanding on it, the house would need to drop by 60% in value before it's in negative equity.....it's anotehr question of course with regards to 'rent v buy' - we're probably border line at the moment..... but someday., it will be ours (sure it's only a few years to go to 2026  !)


----------



## baby_tooth (26 Sep 2006)

Can I throw my hat in?

190% ratio of debt to gdp.

now our gdp is grossly over inflated due to multiN.

So postulate to the figures if you will...but gnp: gdp has been mooted to be around .86:1

So roughly, being generous..GNPEBT  of 1:2.05

Ok, now on other side of the equation, price our housing stock at REINSTATEMENT cost, as inherent value is not tangible...

I wouldn't be too confident of debt levels being nice and low.

And if we factor in the cost of servicing the debt versus the various offsetting income, ie
Mortgage costs versus Capital Appreciation.
Car Loan costs along with depreciation vs weighted aspect of wage (including increases) devoted to depreciating assets...ie cars..


Interesting piece of info...we have more bmw's and mercs per capita than anywhere else in the world....

In 2005, more cars worth over 70k where sold in ireland than the revenue had records of ppl earning 70k or more...

ppl won't own up to indebtedness...and econometric studies in the us have shown that the more educated a person is, the less likely they are to admit financial trouble.


----------



## Calina (26 Sep 2006)

baby_tooth said:


> Interesting piece of info...we have more bmw's and mercs per capita than anywhere else in the world....
> 
> In 2005, more cars worth over 70k where sold in ireland than the revenue had records of ppl earning 70k or more...



Have you a source for this one?


----------



## baby_tooth (26 Sep 2006)

read it on a report from someone who worked in the planning section of main car distributors, they had sourced their info from revenue and vechicle registiration office.

other stat is from a report from the central bank...think it was another of thsoe IFSRA reports.


----------



## Flick (26 Sep 2006)

you would put under 35s in 'youth' bracket ?   excellent stuff that means 5 yrs of 'youth' left for me !


----------



## cjh (27 Sep 2006)

I read an article yesterday - I think it was in Irish Tatler - on credit card debt and it said that the average credit card debt amongst women in Ireland was over €5,000.


----------



## bogwarrior (27 Sep 2006)

cjh said:


> I read an article yesterday - I think it was in Irish Tatler - on credit card debt and it said that the average credit card debt amongst women in Ireland was over €5,000.



maybe they consider it a 'debt of honour'....

from the bbc news site  today,  while the average European has 1558 GBP in unsecured debt, the average Briton has 3175 GBP (I assume this is also unsecured debt).
The article mentions German, French, Turkish,Greek and Dutch debt rates but little old Ireland doesn't get a mention.


----------



## quinno (27 Sep 2006)

so we must be ok then....


----------



## ClubMan (27 Sep 2006)

walk2dewater said:


> Hard facts please!?? LOL


I did point out that this was anecdotal.


> MOST under-35 "homeowners" own nothing but a massive mortgage


Chances are that they own at least 8-10% of the equity in their _PPR _from day one (100% mortgages excepted of course). 


> Anyway, werent we talking about ccard debt specifically?


Yes - we got sidetracked alright.


----------

