View Poll Results: Are credit card charges the same as debt
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Yes, current credit card charges are the same as debt
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67 |
41.36% |
No, current credit card charges are not the same
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88 |
54.32% |
Another poll? Really? Too busy to answer
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7 |
4.32% |
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Poll: Are current credit card charges debt?
09-25-2016, 10:48 AM
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#1
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,586
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Poll: Are current credit card charges debt?
It seems to be an unsettled question over at this poll, so I thought it might make a reasonable new poll question.
So, if you pay your credit card balance each month in full, is the current, not yet paid and not yet due balance considered debt?
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09-25-2016, 10:53 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Jun 2007
Posts: 2,657
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Yes. You owe this money and must pay it back in the future.
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09-25-2016, 11:08 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,203
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Well, since this is related to a net worth question, then yes....
So, say you have $10,000 cash and $2,000 CC debt.... if someone asked you your net worth, if you ignored the CC debt then you would say $10,000...
However, we all know that the net worth is only $8,000.....
You can either list it as debt or reduce your 'cash' for the payment that you will have to make within the next month... any other way and you are fooling yourself...
BTW, I have $7K of CC debt right now.. ... DW has been booking trips etc. and it is way out of hand....
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09-25-2016, 11:09 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Location: Michigan
Posts: 4,962
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I would say yes, but only for up to 30 days.
__________________
"The mountains are calling, and I must go." John Muir
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09-25-2016, 11:11 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Posts: 11,401
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Yes, of course, they are unsecured debt.
https://en.m.wikipedia.org/wiki/Credit_card_debt
"Debt results when a client of a credit card company purchases an item or service through the card system."
What the heck else would they be?
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09-25-2016, 11:16 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,863
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Quote:
Originally Posted by MichaelB
So, if you pay your credit card balance each month in full, is the current, not yet paid and not yet due balance considered debt?
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Technically yes, but in practice "no" if paid in full each month with no carrying/finance charges. If it is debt, to me everyone would have debt. Example, my monthly electric and water bills are based on usage playable only "after" I use it. Is that debt? Technically yes, but not really for practical purposes.
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09-25-2016, 11:18 AM
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#7
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,199
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Splitting hairs, but the way I look at it is that I don't actually "owe" the money to the CC until the due date. Since I pay it off by that date (if not a little before), then I not only don't owe the money, but in most cases I'll be rewarded for using the card.
I know that technically that's incorrect, but I can't help seeing it that way.
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09-25-2016, 11:23 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,666
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ONLY if you hold a balance, we do not, so No.
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
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09-25-2016, 11:25 AM
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#9
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,586
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Quote:
Originally Posted by braumeister
Splitting hairs, but the way I look at it is that I don't actually "owe" the money to the CC until the due date. Since I pay it off by that date (if not a little before), then I not only don't owe the money, but in most cases I'll be rewarded for using the card.
I know that technically that's incorrect, but I can't help seeing it that way.
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GMTA. This is my view as well. The way we use it in our discussions here, credit cards are used even when we have the cash because we get some of the money back, it makes for easier and more complete record keeping, and gives us some consumer protections that we otherwise might not have.
So, I have a credit card balance that effectively is a debit card balance and the CC company chooses to debit once a month at a predetermined date rather than when I incur the charge.
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09-25-2016, 11:25 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2011
Posts: 8,368
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Quote:
Originally Posted by braumeister
Splitting hairs, but the way I look at it is that I don't actually "owe" the money to the CC until the due date. Since I pay it off by that date (if not a little before), then I not only don't owe the money, but in most cases I'll be rewarded for using the card.
I know that technically that's incorrect, but I can't help seeing it that way.
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Quote:
Originally Posted by Car-Guy
Technically yes, but in practice "no" if paid in full each month with no carrying charges.
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This is how we view it......otherwise anyone who uses a credit card for a purchase, and doesn't simultaneously remit the funds to the credit card company, has 'debt'...even before said debt is officially posted.
__________________
"Exit, pursued by a bear."
The Winter's Tale, William Shakespeare
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09-25-2016, 11:31 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Posts: 11,401
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Quote:
Originally Posted by Nemo2
This is how we view it......otherwise anyone who uses a credit card for a purchase, and doesn't simultaneously remit the funds to the credit card company, has 'debt'...even before said debt is officially posted.
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Well, you do have debt once you have used the credit card to purchase something. If you die, your executor's first job wil be to pay off your debts, including your current credit card debt.
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09-25-2016, 11:34 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 17,010
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I voted no, because I could return the item and get a credit in the very same statement.
Also because I carry so little CC charges, since I pay my CC off every 2 weeks, that it's an insignificant amount.
Whenever I have used my CC on a big purchase, I pay it off within days after it shows on the CC.
Why do I pay off my CC so much ?
Because then when I look at my bank balance, I know pretty much all that $ is mine.
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09-25-2016, 11:35 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Feb 2012
Location: Northern Ohio
Posts: 3,182
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Lemme get this straight.
I pay for your dinner and you promise to pay me back for it in 30 days. And you think you are not indebted to me?
It's debt. Not bad debt, but debt none the less.
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09-25-2016, 11:35 AM
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#14
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Thinks s/he gets paid by the post
Join Date: Jul 2012
Location: Texas
Posts: 3,024
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No need to break out the accounting textbooks. I think most would agree that any unpaid CC balance is technically a debt that must be repaid. But when it's paid off in full every month, with no interest charges, and usually a cash back credit or some other reward, this is hardly "debt" in the usual sense, or in context of the prior poll (at least that's my interpretation of the intent of the prior poll). More importantly, the lowest level answer for that poll was "<10%" of total assets. My average unpaid CC balance is 0.14%. I would think others who just use CCs for cash back rewards, would be similarly low. So answering "<10%" would be grossly misleading IMHO. I answered that poll, "no debt" and this one "no."
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Retired at 52 in July 2013. On to better things...
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09-25-2016, 11:36 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2011
Posts: 8,368
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Quote:
Originally Posted by Meadbh
Well, you do have debt once you have used the credit card to purchase something. If you die, your executor's first job wil be to pay off your debts, including your current credit card debt.
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Which is why I specified simultaneously.......i.e. if you make a $50 CC purchase, you'd have to, in the same microsecond, transfer an equal amount to your CC account.
__________________
"Exit, pursued by a bear."
The Winter's Tale, William Shakespeare
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09-25-2016, 11:41 AM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2011
Posts: 8,368
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Theologians and Engineers might be killing each other over this question, even as we speak.
BTW, what is the definition of 'current' in this context? (I tried calling Bill Clinton...but to no avail.)
__________________
"Exit, pursued by a bear."
The Winter's Tale, William Shakespeare
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09-25-2016, 11:43 AM
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#17
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Moderator
Join Date: Nov 2015
Posts: 13,879
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No. - current charges, ones which one plans to pay before their due date with no carry-balance, no interest, should not be considered "debt" for the purposes of determining ones total indebtedness.
I could and would pay cash and/or debit card for these expenses, and would if there were interest on day 1 or any of the other implications of debt. I choose to use the credit card for convenience, points, cash back, etc. I'm not using credit for the purpose of debt or delaying payment, but for the perks only.
If you want to get technical, sure, it's debt, but i answered zero on the debt to assets ratio based on what I consider debt and not, as above.
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09-25-2016, 11:43 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Posts: 11,401
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Quote:
Originally Posted by Cobra9777
More importantly, the lowest level answer for that poll was "<10%" of total assets.
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Actually, the lowest level answer was:
I have no debt whatsoever, not even a credit card bill.
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09-25-2016, 11:45 AM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Posts: 11,401
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Quote:
Originally Posted by Nemo2
BTW, what is the definition of 'current' in this context?
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Payable within one year.
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09-25-2016, 11:46 AM
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#20
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Thinks s/he gets paid by the post
Join Date: Apr 2005
Location: Midwest
Posts: 2,962
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I don't consider anything I can pay off instantly a debt. I use credit cards only because they are easy not because I don't have the money and "need credit".
Didn't see it mentioned earlier but the rest of the work considers it debt. I went for a mortgage once ... 1998 I think... filled out papers. Asked if I had any current debt. I check "no". Then they noticed the $19.99 dial-up internet modem monthly charge on one of my cards They had a problem with A) the debt and B) the fact that I seemed to lie about it even tho they all knew exactly what it was because they all did the same thing themselves. That's how we used to pay for internet in the stone age. Loan rules had not changed to match the technology. I don't know if they have today.
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