Quote From: oz_woman06Yes, I agree that sometimes people have legitimate reasons for using their cards, such as medical bills. However, I do suspect that these people are the exception rather than the rule. I am one of the smart ones who only has a $20 credit card debt (which I plan on paying of on Monday), and I acutally have money saved up that I invest regularly.
I believe in only spending what money I have, so if I don't have the money I can't afford it. Quite simple really. I can sleep well at night knowing that I don't owe anything to anyone. I do however believe in "good debt" such as a house loan, as the value of the asset increases in time and will be worth more than the debt itself. I am saving to buy an investment property so that I can put that into practice.
Harvard Law Professor Elizabeth Warren, a periodic guest on Dr. Phil has discussed the leading causes of bankruptcy several times on Dr. Phil. She's quoted in this article: http://www.inthesetimes.com/issue/25/10/nelson2510.html
"'The actual data on bankruptcy in America tells a different story. A team of social scientists and legal experts working on the Consumer Bankruptcy Project have examined thousands of recent bankruptcy cases and found that only a small fraction actually involve "irresponsible over-consumption." The leading causes of bankruptcy, they determined, are job loss, medical debt and divorce. Harvard Law Professor Elizabeth Warren, who co-directed the study, says the bankruptcy bill "targets working families who are victims of circumstance and lets creditors squeeze them harder.'"
***
I've known dishonest people--friends of friends-- who have intentionally run up their credit cards immediately prior to becoming bankrupt, buying everything from computers to Australia/New Zealand vacations. But the irresponsible over spenders are by far the exception.
