Consumerist: consumer debt

Sorry, Your House Isn't An ATM Anymore

Meg Marco — Thu, 08 Nov 2007 12:54:05 EST

For years homeowners have been using their soaring-in-value homes as ATMs, drawing money out to finance whatever they wanted. No more. Falling home prices mean that your house is no longer a source of cash.

The NYT has a cute quote from one such strapped homeowner:

"It used to be that if I wanted it, I'd just go and buy it and finance it," Mr. Whittey, 33, said. "I'm feeling the crunch, and my spending is down significantly."

The bad news is that people like Mr. Whittey were driving the economy. The Times says that 9% of the nation's "disposable income" came from people accessing the equity in their homes.

"We used to go out to eat three or four nights a week," Mr. Whittey said. "Now, we don't go out at all."

Party's over, dude.

Homeowners Feel the Pinch of Lost Equity [NYT]
(Photo:Marilyn Newton for The New York Times)

12 Steps For Digging Yourself Out Of Debt

Meg Marco — Tue, 03 Jul 2007 15:44:54 EDT

If you're in debt and you don't want to be, (and who wants to be?) you might want to take a look at Zen Habits 12-Step Get Out of Debt Program.

Leo describes it as an emergency program, but it seems to us that it has good advice for anyone whose spending is out of control and who wants to be more responsible... but doesn't know where to start.

The important thing to remember is that you really do need to follow a program and tackle your debt systematically, like you would a weight-loss program. Crash diets don't work any better for your wallet than they do for your ass.

The 12-step Get Out Of Debt Program [Zen Habits]
(Photo: bookish in north park)

20% of Americans Fear They'll Never Escape Credit Card Debt

Meg Marco — Wed, 06 Jun 2007 17:13:59 EDT

According to a new survey by Lending Tree, 20% of Americans fear that they will never escape their credit card and other non-mortgage related debt and will be stuck with it for the rest of their lives. That's depressing. Elizabeth Warren at Credit Slips says:"Lending Tree tries to put a happy face on some of the data (most people "perceive themselves as some day being debt free"), but I didn't feel any better when I read it." Yeah, we don't feel any better either.

The survey is worth a read though, interested readers should head over and take a look. —MEGHANN MARCO

Lending Tree Smart Borrower Survey [Lending Tree via Credit Slips]
(Photo: Spidra Webster)

You've Got Too Much Credit Card Debt If...

Meg Marco — Mon, 04 Jun 2007 13:28:48 EDT

From Bankrate:

You're too far in debt ...
1. If you can't remember the last time you had zero balances on all your credit cards.

2. If your FICO score is below 650.

3. If you don't remember what you bought on your credit card last month.

4. If you don't really know how many coffees, teas, soft drinks or snacks you buy every week.
5. If you use your credit card for utilities, food, snacks and so on, and you're not doing it to earn frequent flier or bonus points.

6. If you have money in a 401(k), but you have to live on your credit cards in order to put it there.

7. If you have no money in any sort of general savings account.

8. If you're still paying for restaurant meals you can't remember eating.

9. If you have to take a cash advance from one credit card to make a payment on another one.

10. If you ever held a garage sale to raise money to make credit card payments.

Ouch, that's not you is it? Discuss. —MEGHANN MARCO

Indicators when credit card debt is too high [Bankrate]
(Photo: Ben Popken)