Original Video: Attention Macy's Shoppers, Are You Debt Free?

We sent Gawker video wunderkid Alex Goldberg to the front of Macy’s in New York to ask shoppers if they were debt free, and if that would have any effect on their holiday spending. Overall the answer is no. Most people don’t want to give up their debt either, as it would mean they don’t have a house or car. Ok, that one works for us.

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  1. chortik says:

    your wunderkid should consider shooting something other than interlaced video, it’s 2007 and you’re not targeting TV.

    sorry, it’s unrelated to the actual content

  2. azntg says:

    From what I can infer, it looks like Herald Square to me. And guys, think about it… why the hell do you think most people are there in the first place? I can tell you that most of them are probably NOT there to freeze their arses off and to just enjoy watching people shopping in the holidays.

  3. BLAKELEY says:

    LOVE THIS! Best quote, “I’m not stupid”. Brilliant.

  4. gingerCE says:

    I actually know someone living in NYC in her 20s who is debt free and has a college degree (amazing)–rents, no car, no credit card debt, and no student loan debt . . . I’m jealous.

  5. ARP says:

    I think it was a simplistic question. I think there is “acceptable” debt and “unacceptable” debt.

    Acceptable Debt

    mortgage-assumes reasonable APR, you can easily afford payments, didn’t buy “too much house,” etc.

    car- good rate, can afford payments, etc.

    Home Equity Loans- OK if they’re for home improvements, repairs, or to purchase a car (this one is borderline)

    Unacceptable Debt= Credit Card debt, Home Equity Loan debt (if it was used simply for spending money), pay day loan debt, line of credit debt (assuming you’re not running a small business, etc.)

  6. Beerad says:

    @azntg: Ummm, Macy’s in New York is in Herald Square.

    Since technically everyone paying off a car or a mortgage is not debt-free, the question is a bit muddy. And while getting rid of all debts is admirable, I don’t know that the “you shouldn’t buy Christmas presents unless you don’t have any debts at all” attitude is going to gain too many followers.

    Still, a cute piece. Yay Alex.

  7. Dute says:

    If only people would think before they buy…

    I don’t really need a brand new $15,000 car, this 10 year old car still runs fine.

    I don’t really need an iPhone, this one I got for free already makes CALLS.

    I don’t really need to spend ungodly amounts of money on the people I love just because I have no other way to express it.

  8. darkened says:

    I disagree with the line of credit debt. I very much enjoy having an “overdraft” line of credit attached to my bank accounts. It protects me from getting an overdraft fee if i budget out my spending perfectly and then add a few cents too far. The majority of overdraft fees I’ve ever had in my life were for amounts less than $5 past my balance.

    The other thing I appreciate about it, it gives me instant cash flow if I need it NOW instead of after my next pay check while charging me no cash advance fees, no outrageous APRs. The few times I use it, I have it paid off within the immediate pay period costing me at most a few pennies of interest. The amount of convenience it offers me is substantial.

    It also offers me great protection from NEVER getting a late few due to always have that cash on demand if I happen to gloss over a pending payment date for a major or unexpected purchase. I feel having a line of credit on your checking account can be a very responsible decision because if it saves you the need of even 1 cash advance (i’ve never had to take one because of this) or 1 late or over limit fee. It has already paid the pennies of interest (or even yearly fee of yours has one) and made up for it massively.

  9. Fist-o™ says:

    I am attempting to become debt-free… but I keep failing daily to control my spending on lunch, snacks, and food… I’m also facing internal (and spousal) resistance to cancel ALL credit cards…. Illogical, I know… but, part of me, and all of her, still think that we should “keep one around” for the holy FICA score.

  10. Amelie says:

    @darkened: I disagree with people who feel they can determine what is, or what isn’t acceptable debt. Perhaps ARP in his infinte wisdom can tell the people who financed medical care with their credit cards, how they can avoid that.

    Fortunately, I have no debt, but I’ve used a home equity “line of credit” as you have.

  11. Truthie says:

    I have a problem wth the whole “debt-free” nomenclature. There’s nothing wrong or fiscallu imprudent wiith financing a car or a house with debt. Otherwise there would be no way most people could ever own either. The problem comes more with credit card debt and other “consumer credit”, where people have high interest rates and end up spending irresponsibly. And even then, many people can very responsibly use a credit card to limit the amount of cash they carry, avoid theft directly from their bank accounts due to debit card fraud, and sometimes get a percent or so back in rewards. Maybe instead of “debt-free” we should say “financially responsible”?

  12. @schmeckendeugler: Put the last credit card in a drawer, or the bottom of a jewelry box, or (to be extreme) frozen in ice in the freezer. I don’t think there’s anything wrong with wanting to have an emergency card around … as long as you’re not using it. :)

    @all:
    I’ll go the other way since nobody has yet and say I think car loans are irresponsible debt. It’s a depreciating consumer good. An expensive one, but still a depreciating consumer good, like a dishwasher or a DVD. Homes tend to be appreciating assets. Cars are not.

  13. teh says:

    @ARP: Don’t forget to include (low interest rate) education loans in the “acceptable” category.

  14. Beerad says:

    @Eyebrows McGee: I’ll bite. Cars may depreciate in value, but as a mode of transportation that allows a person to commute and hold a job (and thus pay off the car), that would probably fall under the “worth it” investment category. It’s not realistic to expect that most of the car owners out there can simply do without, or that you necessarily need to scrape together enough cash to buy the car outright first.

    I interpret “irresponsible debt” as just that — stuff that’s fiscally irresponsible to carry as debt, not simply all depreciating consumer goods. Cars can often be a means to increasing income over the long run (as a college degree can) and have significant non-economic benefits as well (like being able to go grocery shopping if you live in the suburbs, or the ability to drop the kids off at soccer practice).

  15. CumaeanSibyl says:

    @Eyebrows McGee: I agree, car debt is a bad way to go. There’s a certain amount of leeway on that for me; if you need to finance a grand or two to get a car that’s been maintained better, the money you’ll save on upkeep might outweigh the money you’ve spent on interest — but that’s not how most people do it.

  16. ARP says:

    Darkened- I would categorize that as “acceptable” since you pay it off almost immmediately. Now, if you were constantly paying interest on ever increasing balances on lines of Credit, that would become a problem.

    I’m not suggesting that people must never incur “unacceptable debt.” If they only way to pay for your medical care is a credit card, then have at it. Perhaps I should have called it “less than optimal” debt.

    Borrowing money to buy a house it probably a responsible use of debt (see above). Using a credit card to pay for medical costs is isn’t ideal, but is likely necessary, given the circumstances.

    I’m suggesting that we need be realistic about debt and make more responsible spending decisions when it comes to debt. We should be immediately suspicious of certain types of debt (e.g. credit cards you don’t pay off), but that doesn’t mean it will never happen.

    Here’s a common situation- there’s an after Holiday sale where everything is 50% off. You spend $2500 using a credit card and it takes 3 years to pay that amount off. The card has an APR of 21.9%. Would you have still purchased the things you did if you realized the net discount on that stuff was only 15-20% (rough numbers) after calculating interest?

  17. clickertrainer says:

    @ARP:
    That’s right. I give the folks who thought about for a second a lot of credit. They were considering whether the questioner meant all debt or consumer debt.

    I am not debt-free and never will be. First, I like my home, and second, I like my home mortgage interest deduction even more. If I did not have that, I’d be paying the alternative minimum tax…..now THAT is bad debt.

  18. Monkey4Sale says:

    @Dute: Or more so, I don’t really need text messaging, internet, photos, and music in my phone so my bill is astronmomical.

  19. no.no.notorious says:

    i agree, it’s a vague question. i think a better question is ‘are you in debt because you have things you don’t need this holiday season?’

  20. Trackback says:

    Photo of the world’s largest snowglobe via LondonShutter Local · Bryant Park to house the world’s largest snow globe [NewYorkology] · Many Macy’s shoppers in debt [Consumerist] · Prospect Heights may be getting another bank [Brownstoner] National · Where to find “hot couture”…

  21. Alvis says:

    No such thing as “acceptable debt”. That’s called “rationalized debt”

  22. anatak says:

    Acceptable Debt

    >mortgage- assumes you get a 15yr fixed rate and put at much down as you can (20%, 50%, 70%?) and then pay it off early.

    Unacceptable Debt

    >All other debt

  23. anatak says:

    @schmeckendeugler: I can tell you that you will continue to struggle until you and your spouse are in alignment on this. Make that more of the focus than getting out of debt. You have to show they problem before you present the solution. That may help. And BTW – there’s nothing holy about a FICO score. You don’t need it, you don’t need to maintain it, so stop worrying about it. If you don’t want the card, then cancel it and cut it up. Make sure you have a emergency fund of at least $1k before you do that, and define what an ‘emergency’ is in your house. You’ll do fine, the hard part is getting started.