is credit to easy to obtain?
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Topic: is credit to easy to obtain?
Posted By: fattartsrock
Subject: is credit to easy to obtain?
Date Posted: 24 June 2007 at 1:26pm
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on the same line of thinking as my last rambly post (kids in bed, DH fishing, I'm bored..)
It seems remarkably easy for young people to rack up HUGE amounts of finance (for cars).. DH's 17 year old apprentice has so many court fines (from driving offences) he has an attatchment order on his wages, BUT this last week, just HP'd $4000 worth of mags and tires on a car he is paying off a new turbo he's just put in, and tools he has had to buy for work... Also, it seems really easy for anyone at all to get credit, even with huge intrest rates, even gvmt regualtions just eing brought in won't really curb that... Whats got me thinking about this is that loan my mum went Guarantour on for my brother and his GF, well, they are going bankrupt now as they owe so much money (easy credit) to finance companies and loan sharks, how is it that people are allowed to ge themselves in this kind of mess? Don't the companies have to say well, you already owe $x amount, so no, you can't have more? I know reputable ones must have to? Thoughts, ladies..(and gents) ------------- The Honest Un PC Parent of 2, usually stuck in the naughty corner! :P |
Replies:
Posted By: aimeejoy
Date Posted: 24 June 2007 at 1:34pm
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Yep, its way to easy to get. Remember the friend who boorowed money off us and didnt pay back for over a year? Flash house, constant stream of new cars and "stuff", well the bank bailed them out a while ago and consolidated the mortgage and car loans, gues what they did? Bought another car (preobably $30K +) AND she is due with first bub in 7 weeks or so! Why oh why do the finance companies keep letting them do it - they will end up bankrupt soon too if they keep doing this. I guess the finance companies make so much out of interest and then repo-ed stuff its still worth their while? Some of the blame has to be put on the people as well tho, why do they need to live so far beyond their means, it doesnt make them happy (stress instead).
Sorry just rambling on, my hubby still isnt home yet either and Han is asleep! Hope you've ahd a good weekend Annie.  ------------- Aimee Hannah 22/10/05 Greer 11/02/08 |
Posted By: minik8e
Date Posted: 24 June 2007 at 2:39pm
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In some cases I agree. The loan sharks etc that are out there prey at times on those lower income earners who are desperate, but can't afford it, but need it. Also what I find is a lot of young people are "want it now" people - they'd rather put it on HP and pay a heck of a lot of interest instead of saving up, or they want to start at the top instead of working their way up. I have to admit, I'm similar to that, although only to a degree. I HP'd my fridge, washing machine, dryer with Mum as guarantor for the fridge, back when I was 17-19, but made sure that I paid over and above the payment required, and that it was interest free. I only ever HP if it's interest free. DF on the other hand, doesn't think about it, he just thinks "I want that" and goes to get it, without thinking of the financial consequences. Thankfully we've stopped that little bad habit!! We have just HP'd a chest freezer, which I've set up the AP for at a higher rate than the payments required, so it's paid off sooner, but we thought hard about new vs. used, and used chest freezers tend to be 15-20 years old and not last a huge length of time, whereas if our new one lasts 20 years, that works out a cost of $50 a year. Even if only 10 years, it's only $100 a year. And no interest. And we had to get one for necessity, as we get a half beast every 6 months, which is currently on the hook, and we have nowhere to put the meat at the moment.
Phew, what a ramble, and probably TMI. I think a lot of young people don't look at the big picture re. finance which is where they fall into strife. They also aren't prepared to start at the bottom and work their way up, they need the best straight away. Life doesn't work like that. |
Posted By: Red
Date Posted: 24 June 2007 at 2:49pm
| I reckon that they should teach kids at high school about finance etc, it is just so easy for them to sign up for loans without knowing what the consequences of doing so could be. We currently have some tenants who struggle to pay their rent at times, but yet have a new car, and of course could not get a loan through the bank, so are paying huge amounts of interest to a finance company! |
Posted By: Paws
Date Posted: 24 June 2007 at 2:53pm
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Yup far too easy!! ------------- http://lilypie.com"> 
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Posted By: lil_miss
Date Posted: 24 June 2007 at 2:55pm
| Its quit appalling that people are able to just keep racking it all up... there should be a rule that you can only have xxx amount of things on HP or loans at any one time :) |
Posted By: Lissy
Date Posted: 24 June 2007 at 3:47pm
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It is soooo easy. My Step sons mother has had loan to pay a loan to pay a loan and it does on, she nevers seems to get ahead and always in debt. When you fill out an application it asks for wages, then what you spend. Most time people do not give the correct readings, so it looks like you can afford a loan..... Sad really is'nt it ------------- Harlan Drew DOB: 06.12.06 & Stepmum to Ethan & Christian, DOB: 25.02.99 |
Posted By: emz
Date Posted: 24 June 2007 at 4:16pm
| My Dh is really bad with it, until about 2 years ago he just ticked up whatever he wanted. Now I control the purse strings! Hahaha |
Posted By: miss
Date Posted: 24 June 2007 at 4:23pm
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It is incredibly easy - look at that girl who borrowed money at 18 or whatever she was to visit friends in the states and is now 10 years later paying off huge amounts of debt because she had overextended herself initially, so has borrowed from one source to pay the previous, over and over again. Even though she is on something over 50k, she lives on next to nothing a week.
The new finacne companies in particualr are bad at this as they suck people in and get them in over their heads. However I did read something recently that looks like new regulations will be introduced to help curb some of the problems. -------------  
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Posted By: BaAsKa
Date Posted: 24 June 2007 at 4:24pm
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I think that there should be a limit to how much a young person (or anyone in general really) should be able to borrow.
I wouldnt think that its that easy to lie about your circumstances seen as they do in depth checks...well the credit companies that we have gone through have??? My SIL seems to get loan after loan after loan and is in so much crap! from them!! and i just dont see how she can get so much considering they are on a VERY low income!!!????? We tried to get a 2nd loan for $2000 just before DH had his accident so we could buy DH a work ute but the company hummed and haaadd too much cos we owe $4000 on our car and apparently it wouldnt be a problem if we were older (im 23 DH is 21) even though DH is on good money, they said young people tend to be a little frivilous so they are cautious....fair enough i say. I guess it depends on the credit company as we only go through the well known ones and not the dodgy ones in the phone book 
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Posted By: Guests
Date Posted: 24 June 2007 at 4:31pm
| Just after I had finished uni and was still flatting, I applied online for a BNZ credit card, and with what I earned from my retail job was only expecting something with a $1000 limit - but instead got a card a week later with $4000 limit !! I called them ASAP and had it changed though, that kind of "money" is dangerous !! We only use our credit card now if we know we have the $$ within the month to pay it off, so we don't get too far in over our heads. Definitely WAY to easy to get credit these days. |
Posted By: busymum
Date Posted: 24 June 2007 at 5:44pm
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Perhaps I'm a bit hardened but I think it's not the companies giving credit at fault here. If it takes til bankrupcy road to learn to manage your own money, then so be it. But I think parents and perhaps teachers should teach children how to manage money before they leave school. They won't necessarily do what they are taught of course, but it's their responsibility. -------------  |
Posted By: lizzle
Date Posted: 24 June 2007 at 8:10pm
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I think it is way too easy to get credit and I think people don't think about what they are doing. we looked up how much we could get for a mortgage and it was over $350,000! Hoewver, the payments would be almost 60% of our salary. OKay if everything is fine, but one car break-down and we would be screwed, so we made the decision based on how much we felt we could afofrd and still have a life...(no mortgage yet, need a good job first!). I think thats why NZers are such crap savers, after we pay the loan, then the loan we got to pay the first one, the mortgage, the 23 hps, we simply have no money left to save...and then feel stressed, so treat ourselves to a holiday - no money? no problem, get a loan for that too!
I think eftpos has a big play in this. I know my nephew struggles with the concpet of money - all hge knows is that mummy puts the card in the wall, and out comes cash. A lot of kids in his class are the same and I think it will have a huge impact - even more so whenv the next generation come through. |
Posted By: Bombshell
Date Posted: 24 June 2007 at 8:21pm
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well have to say it is MUCH easier in usa - students get sent credit cards in mail etc and just keep on transferrring the 1% repayment to next card etc once that one expires so end up with like 20 cards. I wasnt even a citizen and ended up with the companies offering me stuff while i lived there!!!
have to say we earn good money and are ok (most of the time) but while on honeymoon in hawaii i used the amex til DH was fretting more than a little...and begged me to use the visa or something else - recall him sweating at kmart when i whipped out the amex YET again!!!...I told him it was ok cause it would stop and be declined when it hit $5000 - the limit i had on it...ummmm well obviously Amex decided we needed an increase without telling us and i managed to rack up $10000 cause they had doubled our limit on the amex card! OOPS...and yes i got into trouble and got an I told you so....!!! waaayyyyy too easy to do - i just kept on spending!!! and would have been nice to have been told they increased it...not find out the hard way!!! |
Posted By: mummy_becks
Date Posted: 24 June 2007 at 8:40pm
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Yep it is far too easy. My BIL is a good example of this. Him in his 30's is not allowed to HP anything without a gaurenetor(sp?) as he had racked up so much on HP during his 20's he ws a baycorp as he couldn't make the repayments. The best thing about his story is the in laws did not bail him out and he has learnt the hard way. I had a hard time when I was given a credit card when I was 15 to take to Singapore with me. It didn't get cancelled when i came back and once I was 18 and finished school I went a little crazy and racked up $2000 on next to nothing. I got rid of it when I was 22 (pregnant and wanting no debts once baby was here) and am so glad I did. When we went to get our mortgage, they told us we could borrow $350000, far more than we would ever want. We took less than 1/2 that amount but every year the bank tell us we can borrow money to do stuff with. As much as we would like to we couldn't afford to borrow it yet they keep trying to push it. ------------- I was a puree feeder, forward facing, cot sleeping, pram pushing kind of Mum... and my kids survived! |
Posted By: 11111
Date Posted: 24 June 2007 at 9:39pm
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All I can say is yes it is and me and DH are living proof for that we are still paying for some rather bad desion's made Pre babies even before we meet. I think it is far too easy for young people to fall into the trap of Debt too early.
------------- Deborah Mum to:   
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Posted By: Maya
Date Posted: 24 June 2007 at 9:58pm
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Willie has ended up paying $48,000 for a car with a window card price of $23,995 and a current valuation of around $10,000 if we're lucky. So yes, I think it is far too easy to get into debt, and I think loan companies prey on lower income/less educated people and hit them with crippling interest rates knowing they don't view things in the long term.
I don't do HP or credit cards. Period. Far too dangerous, I am far too much of a spender. That way if I don't have the cash, I don't get to buy. ------------- Maya Grace (28/02/03)
 (02/01/06)
The Gremlins:Sienna Marie & Mercedes Kailah (14/10/06)
Lil miss:Chiara Louise Chloe (09/07/08)
Her ladyship:Rosalia Sophie Anais (18/06/12)
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Posted By: Bombshell
Date Posted: 24 June 2007 at 10:12pm
and that is a whole nother thread right emma? LOL! 
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Posted By: Bizzy
Date Posted: 25 June 2007 at 8:31am
ahhh but you see rent isnt as important either to some. If you dont pay your rent you cant get chucked out for quite some time...if the car gets repo'd then you just re finance, debts get on top of you then consolidate ... You'll find its the less reputable finance companies that will give credit to low income earners and those with bad credit already, and quite often no matter if the debt gets paid or not from the debtor they still get paid from their insurance company, so they win either way. ------------- http://www.myfitnesspal.com/weight-loss-ticker"> 
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Red wrote:Posted By: Maya
Date Posted: 25 June 2007 at 8:42am
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That's how Willie got bitten. The finance company gave him a loan even tho he didn't have a job at the time and he bought the car, obviously with no job couldn't make repayments so it got repo'ed, and then the finance company so *generously* offered to refinance him, at twice the interest rate, plus all the repo fees. He would have been better off to let them onsell it and cut his losses. But we were separated at the time so I had no say...
And yep BS, that most certainly is a whole nother thread! ------------- Maya Grace (28/02/03)
(02/01/06)
The Gremlins:Sienna Marie & Mercedes Kailah (14/10/06)
Lil miss:Chiara Louise Chloe (09/07/08)
Her ladyship:Rosalia Sophie Anais (18/06/12)
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Posted By: fattartsrock
Date Posted: 25 June 2007 at 9:08am
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I think alot of the debt is from "Jones - ing", you know, getting the latset of whatever, to keep up withthe joneses. I used to nitce that at work girls come in wanting a $10,000 ring for an engagement ring, like mums, but mum was given hers for their 25trh wedding anniversary, not straight up!. I think alot of people are "right now" people, instead of getting what they can afford, which may not be the biggest or flashest, they get the biggest and flashest... A great example of that, when I was doing my training, there was another trainee manager there who was going for a mortgage with her DF and they FUDGED big time about income, bonuses etc so they could get a mortgage in a flash house in a flash area, and she was happy to admit if one of them lost their job or got sick, they were stuck big time... no babies fo rthem for 10 years either. Why not start off in something smaller, then keeo trading up when you can afford it? I'm not the best example, I'm happy to admit I'm a terrible spender, luckily, Rod reins me in.. He is, um, "careful".. ------------- The Honest Un PC Parent of 2, usually stuck in the naughty corner! :P |
Posted By: Bizzy
Date Posted: 25 June 2007 at 9:12am
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but the finance companies make it sound soooo easy.
"why buy a $300 one when we can give you finance for a $1000 with no repayments for 6 months?" ------------- http://www.myfitnesspal.com/weight-loss-ticker">
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Posted By: Maya
Date Posted: 25 June 2007 at 9:22am
Or "no interest for 12 months" but then if you don't pay it off within the twelve months you get whacked at about 24% ------------- Maya Grace (28/02/03)
(02/01/06)
The Gremlins:Sienna Marie & Mercedes Kailah (14/10/06)
Lil miss:Chiara Louise Chloe (09/07/08)
Her ladyship:Rosalia Sophie Anais (18/06/12)
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Posted By: nikkitheknitter
Date Posted: 25 June 2007 at 10:11am
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I haven't read this whole thing... but YES. Very frustrating. (Must get self out of debt and then have self control!!)
Will read this properly when I am not at work 
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Posted By: newmum
Date Posted: 25 June 2007 at 1:14pm
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Interesting thread again Annie
Watching the Muliaga family story on Sunday last night it was interesting to note that they had loans from 3 (i think) different loan "shark" companies and at some places were paying up to 30%!!!! interest!!! How are you supposed to get out of that kind of debt? Scary. I am lucky to also have a ahem "careful" hubby that reins me in, especially now that we are paying off a mortgage! We have HPed once but it was on a 12month no interest plan and we KNEW that we would have it paid off before the 12 months were up (and did ). I think that this is the only kind of hP I would do.
edited to change LICKY to LUCKY heheheheeh ------------- http://lilypie.com"> 
http://lilypie.com"> 
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Posted By: fattartsrock
Date Posted: 25 June 2007 at 3:04pm
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once again, I think consequence is a word not really thought about here?
I also think you learn from example. For example, my parents were $hite with money, hence we all are as well (have it = spend it) I have since learnt this isn't a great way to live (thanks Rod..) but neither brother has. I think how the loan shrks work is that once they have sucked you in, they know you will neer get out, so they keep making money off you (or not, as often the payments stop?) ------------- The Honest Un PC Parent of 2, usually stuck in the naughty corner! :P |
Posted By: busymum
Date Posted: 25 June 2007 at 4:15pm
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Neither of our parents have learnt yet how to deal with their money. DH's folks spend everything they have, and more, and my folks save so tightly that the kids only ever eat porridge for breakfast because it is apparently the cheapest of all the breakfast choices But then the "savings" all go onto home renovations etc.
So DH and I have had to learn how to manage our money very carefully because both our parents still have a lot of mortgage left to pay off and no savings to speak of, and if we fall flat on our faces there'll be no one to pick us up! It has been a gripe of mine for some time because I think parents should help out their kids and buy cool things for their grandkids... but in our case neither of those happen. ------------- |
Posted By: nikkitheknitter
Date Posted: 25 June 2007 at 9:29pm
My sister is working for a finance company over the uni holidays and OH MY GOSH! Real eye opener hearing the stuff they do. It's crazy! I would NEVER sign up to one of those loans as they absolutely screw you over. (Well, unless you read and understood the contract completely) She's just processing loan applications as has to turn people down... she keeps trying to tell them she is doing them a favour, they aren't too impressed with that line! haha |
Posted By: 11111
Date Posted: 26 June 2007 at 7:37am
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Except ew have never lernt to manager our money,but yeah neither of our parent's get cool stuff for the kid's very often. My FIL is just a tight A@@ tho and my parents' do waht they can which is not alot so I totally agree parent's shoould be planning better to help their kid's out a little more. ------------- Deborah Mum to:
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Posted By: MelanieAndBree
Date Posted: 26 June 2007 at 10:27am
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I made the mistake of getting a HP and a loan round the same time. Stupid idea that was! Of course i was 18 and didnt think.
Wish i did! Its now 3 years later and ive JUST finished paying my HP (as of tomorrow! Yay) and its going to take me another year to pay the loan! (damn finance companies!). It wasnt a huge amount but the interest was high and of course i didnt care about that at the time! i was stupid and im lucky my credit isnt f'd
It was waay to easy for me to get them and pretty stupid as i didnt even have a job at the time! ------------- Melanie. Mum to Briahna Robyn, 3yrs |