Travel debt

Jan 31st, 2008, 03:44 AM
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"Japan's housing bust lasted over 15 years."

Except that the Japanese bust was caused by too little spending and too much savings. I'm not sure you can extrapolate from this experience to predict what any US housing bust will look like, as long as you claim that the US bust is being caused by excessive credit.
travelgourmet is online now  
Jan 31st, 2008, 05:17 AM
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<Except that the Japanese bust was caused by too little spending and too much savings.

Sorry, absolutely wrong! Busts always follow booms.

Japan home prices peaked between 1990 and 1991. Prices collapsed after this period, falling back to pre-boom levels. In Tokyo, prices fell by more than 80 percent. Some cities are still experiencing declines to this day and many say a similar pattern will happen here.

Low interest rates, easily obtainable credit and speculative mania helped to fuel the real estate boom in Japan, just like it did here. The fall was hard for Japan, and worse yet, it took a long time for prices to hit bottom.

Just look at other housing booms and busts like the one in Texas, where many affluent just walked away from their homes and you will see a similar pattern.

This one will be worse because there were so many people "buying" homes they could not afford with no money down & mortgage companies and banks selling bad debt in fraudulent packages around the world.

BUT, this is well off the traveling with debt topic...except in boom times, credit is easy and it is easier to have debt, when it becomes bust & recession times one should be even more cautious about debt.

WTnow is offline  
Jan 31st, 2008, 05:43 AM
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We had planned to take only small, inexpensive long weekend trips this year (like to visit my cousin in Torrance) because of debt. But his family is taking the trip of a lifetime to Europe with his German-born (and speaking) mother for her birthday. Luckily I have an inheritance to fund the trip, which my grandparents would heartily approve, knowing it's been my life-long dream to go to Europe. Since his mother's 70 years old and still mobile, this opportunity may not come again. I don't feel a shred of guilt about this, but ordinarily wouldn't do it with significant debt.
vfifield is offline  
Jan 31st, 2008, 06:03 AM
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dead right - busts always follow booms because generaly people just do not know when to stop!

People have been buying investment property for 4 years now with absoluetly no prospect of getting a good income return from that investment. They have all been salivating at the prospect of more capital growth - sod the economics its going to go up 15% for the next 20 years. Clearly crap.

I just booked to go to the Caribbean and have looked at the set-up the owners of our rental property have - looks great why don't I do it - because they bought the properties 18 years ago when the income generated wasn't hugely different from that received now - except the cost of a similar investment is $3,500,000 the return around $75,000.

Property valuations just don't stack up now - all because we got too greedy.
markrosy is offline  
Jan 31st, 2008, 06:09 AM
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ps if you lot over there are moaning over debts, exchange rates etc with interest rates at 3% and fuel at 10p a gallon (or what ever it is) - try living in the UK - interest rates are a misnomer, people are starting to run diesel cars off urine (don't try it at home kids)! because of the price of fuel and we have freezers full of bread because wheat is rising at such a rate.
markrosy is offline  
Jan 31st, 2008, 06:23 AM
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I think a distinction needs to be made between onerous "debt" and big credit card bills. Every month, we receive huge credit card bills .... why? Because we put everything we can on the credit cards to accrue miles. That having been said, we keep our books to account for spending, i.e. we reconcile outgoing and incoming. Every month we pay off the new bill and the following month, we create new ones. If you can manage your debt, if you allow for travel expenses by either saving or earmarking, you have earned the right to enjoy one of life's most rewarding and enriching pleasures, travel.
puakaloha1 is offline  
Jan 31st, 2008, 07:24 AM
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It depends on the size and cost of your debt. I would not charge an around the world cruise while holding much debt, but life is for enjoying and can be fleeting.
I would not hesitate to travel if it did not add to your debt that you can afford. I would limit travel to economy and no more than once a year if you are charging it.
Taina2 is offline  
Jan 31st, 2008, 09:11 AM
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Since I worked 2 jobs in college, will still have student loans till I'm middle-aged. I'm not waiting around to travel.
I try not to increase my debt with any of the trips I take. I work overtime to make up the difference and pay those trips off in cash. But I figure if I don't pursue something I love and just slave away every day to pay off debt where's the enjoyment in life. I pay all my bills on time so pursuing a passion is my own choice.
trvlndance is offline  
Jan 31st, 2008, 03:22 PM
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uhhhhhh you might not be here on this earth in this life tomorrow....what the ______. Come on now! My sister died of lung cancer last year, never smoked a day in her life! Too many people I know since 2003 have passed...I say enjoy life even if you have debt. Do whatever you can and enjoy it to its fullest. Life is just to short
roeann is offline  
Feb 1st, 2008, 07:30 AM
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LAwoman, where do you borrow and pay only 3% interest? Most credit cards charge upwards of 20%.

We use credit cards a lot. But we pay it off monthly.
Mimar is offline  
Feb 1st, 2008, 07:39 AM
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Mimar, we get many offers at 0 - 6%, from major banks. I expect a lot of US posters do, too.
LAwoman is offline  
Feb 1st, 2008, 07:54 AM
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I see offers of 0 to 6% (meaning 6%, not less than that) and my equity credit line is currently about 6%, but the reality of finding a one year loan at 3% has so far totally eluded me.
NeoPatrick is offline  
Feb 1st, 2008, 08:05 AM
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I have seen many, many credit card offers at 2.99% interest. Indeed, it seems to be one of the more common of the low-interst come-ons. Others are 0% or 5.99%.

This site lists 117 cards with rates at or below 6%, including 5 between 2.9 and 2.99%. So, I think we can safely say that the OP is likely accurately relating their experience.

Yes these rates are introductory, but that is why one flips their credit cards. As several of these are mileage earning cards, it is possible to lower the net interest rates to below 0%, if you take advantage of the various bonus point promotions.
travelgourmet is online now  
Feb 1st, 2008, 12:55 PM
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"Flipping" credit cards is not a good idea if you're interested in maintaining a high credit score.

Credit report inquiries (including credit card applications) can lower your credit score. Multiple or frequent applications for credit (including credit cards) can have an extremely negative effect on your score, especially around the time you are shopping for major credit for things like car and mortgage loans.

Closing old, paid-off accounts does not help your credit score, and often it can hurt.

If your ratio of credit used to credit available on any account is high, that indicates higher risk and will likely lower your credit score.
Jean is online now  
Feb 2nd, 2008, 06:32 AM
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Not too long ago when I increased my Equity Credit Line, the bank officer gave me a copy of my credit report. While it is VERY high, there was a notation that it was lowered slightly due to "excessive" credit requests. I was dumbfounded as I haven't applied for anything in years that would require a credit check. Then it dawned on me. After doing an online survey couple years ago, I was hit with tons -- I'm talking hundreds -- of mortgage loan acceptance letters and emails. This was because the survey was about mortgages, something I didn't even know when I started it. When I got to the amount of my current mortgage, I tried to pass it, since I don't have a mortgage and don't want one, but there was nothing to click for ZERO. The survey blocked on me and I had to go back and randomly click an amount. Obviously due to that survey, dozens or perhaps hundreds of mortgage companies took it upon themselves to check me out and then offer me unwanted mortgages. I'm not worrying about what that did to my credit score since it is still so high, but for someone else, it could be a real issue, and something they didn't even cause.

NeoPatrick is offline  
Feb 2nd, 2008, 08:46 AM
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I was appalled some time ago to discover that our credit score had been reduced (by not just a couple of points) due to two parking tickets that had remained unpaid until the reminder notices (with supplemental fines) had been sent. Oooh. Oh man, time for a pill.
Gardyloo is online now  
Feb 2nd, 2008, 09:12 AM
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I don't believe you have to go into debt to have a nice vacation. We plan way in advance and save for our trips. We are not rich so we do things to get the best value for our money at home. So we can save it for travel. It amazing how much you can save just by turning off lights in and around your house or by not buying sodas at fast food restaurants. We spend about $6,000 a year on vacation and half of it comes from just not wasting resourses around our house. the rest comes from bonuses we get from our employers. No debt, ever from vacations.
Feb 2nd, 2008, 12:25 PM
Join Date: Jul 2006
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Patrick, I'd heard that was possible, but hadn't seen it myself.

I didn't catch anything on my report, but I know I get a ton of mortgage offers so I'll keep my eyes open.
toedtoes is offline  
Feb 2nd, 2008, 01:47 PM
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Hi toedtoes, I do also but I believe (correct me if I am wrong Patrick) the reason the Patrick's credit rating went down a bit as it looked like was he was shopping around for a mortgage (when in fact that was not his intention).

I have been told time and time again that if one receives credit card and mortgage and line of credit offers it does NOT affect one's credit rating unless you are the one that instigated the offer by applying. And unbeknownest to Patrick that is what he was doing when he did that survey.
LoveItaly is offline  
Feb 3rd, 2008, 06:32 AM
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Yes, I think LoveItaly has that right. Although the survey clearly stated (with a place to click) that you did not want offers, etc. from the survey, clearly they treated it as if I did. For months I'd get phone calls from mortgage companies which has somehow tracked me down. When I asked why there were calling me when I had a "do not call" listing on my phone, they were always quick to say "but you REQUESTED this information". No, I didn't. Why on earth would I want a mortgage when I don't have one now?

By the way, how did I know these offers were a result of that survey? Because they all came addressed to "Patrich" (note the spelling) the way I incorrectly entered my name on the survey just to see if it was some sort of "scam". It was.
NeoPatrick is offline  

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