Well, sure, the human race is in its infancy, but by that same standard, the planet is in its forties. So although it's not a crisis yet, it certainly is something we should be worrying about as a species, if only because it might take most of that six billion years to find with a viable alternative.
Cable modems and DSL modems have a life expectancy of maybe a year, in my experience. If you have one that lasts more than two years or so, count yourself lucky. Go buy a new cable modem, and your problem will probably go away.
You're right. I don't try; I don't particularly care what the rates are because I'm never going to use my card in a way that would incur those rates anyway. That said, I don't consider even 10% interest to be a reasonable rate. My last car loan was under 5% and the prime rate has dropped since then.
And even if the interest rate were approximately the same as the paltry 1-1.25% that most savings accounts earn, it still would be of dubious utility to not pay off those bills at the end of the month from my perspective, as it is incurring unnecessary debt with no real benefit. However, under those circumstances, it might make sense to buy moderately high ticket items (TVs, etc.) on credit if I didn't have the money to pay cash.
The bigger problem is that the people who don't have the money to pay cash will never be able to get credit that cheap as long as they can't afford to pay cash. I can qualify for decent credit card rates because they know I can afford what I spend money on. I can pretty much guarantee that people who buy a $500 TV on credit and pay it off over two years are not going to get 1%, 5%, or even 10% rates on their cards.
And that was my point: if I, as someone with a solid credit history, have to work to get a credit card with low interest, then someone living hand to mouth is going to get the maximum rate allowable by law. And it is never appropriate to pay 25% interest.
Don't get me started on payday loans that charge several thousand percent APR....
you must have seriously f'ed up at some point in the past
Nope. A couple of years ago, the federal government passed laws to limit the circumstances under which the credit card companies could raise their interest rates on a customer. Right before that was scheduled to go into effect, most of the major credit card companies, including Citi and Chase, cranked up lots of customers' rates into the stratosphere because they knew that if they didn't, they might not be able to raise them in the future.
Actually, to be fair, I'm not sure what my other credit cards have as their rates. I got my other cards (which I don't actually use) when I was still in college and had no real credit history, so IIRC, they were set at something like prime + 15% unless they have lowered the rates on the cards since then.
Hmm. Now that I think about it, I recently got a Chase Amtrak card (for the 12,000 free rail point sign-on bonus, mainly). I just checked, and it's at 13 and a fraction, so I guess one might conclude that Citi is just a bunch of wankers.
Re:I thought this was a good idea..
on
Real Life Farmville
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· Score: 5, Funny
Or "what should we plant". I can see it now. Survey says:
Ooh. I just noticed that I originally said half a percent. When I first posted that, I was debating whether to say half a percent or a percent, and went with half a percent because it's more typical, even though 1% isn't that uncommon.
I have a couple of accounts that are actually paying around 4%, albeit with low total dollar limits (above which they pay peanuts).
Okay, 1%, 1.1%. The 1% was intended as an average, not a maximum. Either way, it's paltry compared to the 10% APY we used to get when I was a kid, and half a year of interest on $500 at 1.1% is still only $2.75, and is still tiny compared with the interest they'd spank you with if you failed to pay it off before the 6 months is up.:-)
I wouldn't even cross the street for the mere opportunity to earn $2.75 in interest over the course of six months. You'd lose a sixth of those extra earnings just buying the stamp for mailing in the payment. And if you have to actually drive as much as ten miles and back to make the payment, well there went the whole amount. Sometimes credit—even ostensibly free credit—just isn't worth it.
I do too, but with a fairly small dollar limit and lots of strings attached (you have to use their debit card to make at least 15 purchases per month, etc.).
Most money market accounts I've seen are only paying about 1%, and my E-Trade Bank account that was once paying 5% is now paying something like 0.05%. I'm not saying you can't do better than 1%, but you have to search for it.
The problem with those loans is that statistically speaking, most people forget to pay them off, then get charged six months of back interest. But yes, if you feel confident that you will remember to pay it off at the right date, you can make a whopping half a percent interest on that money in a typical savings account.
As for me, I don't think it's worth the hassle of remembering just to make an extra $2.50 in interest and risk getting hit with forty or fifty dollars in interest if I forget.
Even the poorest colleges with 500 students in West Tennessee have computer labs. What kind of school are we talking about here? Is it accredited? Is your degree there actually worth something?
Given a median 22 years worked, that's over $16,000 assuming a 5% average APY. The $20,000 was actually the median, not the mean, BTW. It may or may not be an exact figure, but it's not nearly as far off as you seem to think it is.
Oh, my bad. Somehow I read "three years" as "ten years". You'd have to have invested about $10,000 three years ago to have $20,000 today.
Bear in mind, though, that $20,000 is the median for everyone, not people who have been saving for only three years. The average person works for over 40 years, so that's an expected typical figure for someone who has worked half that long, or 20 years.
Then you're not saving correctly. You should be investing that money in ways that increase in value, not in savings accounts that pay a paltry one percent APY.
If you had put $1,000 in Apple stock ten years ago, you would have $20,000 now, and that stock is continuing to climb at a similar rate, so it's not too late to start.
I'm seeing a similar growth rate for MasterCard stock, although it has only been public for five years, so obviously you couldn't have put $1,000 into it ten years ago. The same principle applies, though.
Obviously past performance is not a guarantee of future results, but it's a pretty good hint.
Depends on a lot of factors: whether you bought a $2,500 used car or an $18,000 new car, whether you can sell your house and rent, whether you have a family that lives with you, etc. Depending on the answers to those questions, the answer may be "no way" or it may be "easily twice that."
Only because it's a lot harder to declare personal bankruptcy since 2005. As a result of the increased difficulty, the attorney fees involved increased dramatically. Now, nobody can afford to declare bankruptcy for a few thousand dollars in debt because they would end up owing more to the lawyers than they would get out from under.
Because of that, it stands to reason that the most expensive debts (houses and medical expenses) would be the only real drivers of personal bankruptcy. This isn't an indication that those are the primary drivers of poverty in the U.S., but rather an indictment of the high cost of filing for bankruptcy protection.
Those who are simply in a difficult situation (health etc.) already are doing the right things within context, and simply need more support.
From what I've seen, a sizable percentage of the poor show remarkably bad money management skills, and even when they get jobs that pay remarkably well, they still fail to build up any sort of cash reserve. Then, when trouble strikes as it inevitably does every so often, they aren't prepared to deal with it. I'm not saying that this is true for every person who is struggling to get by, just for a sizable percentage. If you're struggling to get by at 23 or 24, it's because your job sucks. However, unless you've been unemployment for over a year or you've experienced a medical disaster, earthquake, tornado, fire, flood, etc., if you're still struggling to get by at 50, it's because you didn't save enough money when you were 23 or 24. Period.
Of course, it's not entirely their fault. The existence of poverty inherently points to the U.S. education system being a complete failure. Our children are never taught even the most basic money management skills in school, so unless their parents have good money management skills, they're pretty much screwed. This keeps the poor poor and the rich rich, offering only limited opportunities for advancement. And that is what we most need to fix about our nation's education system.
First, I didn't say most Americans had that much in their accounts. I said that was the median amount. Half of Americans have less, half have more.
Second, if you are getting a 4.65% APR on a credit card this year, that's basically a miracle. My credit rating is very good, and despite the fact that I pay my cards off at the end of the month every month, if I didn't, I'd owe over 25% APR on pretty much every card I have. The banks have used the credit crunch as an excuse to double or triple credit card APRs. Heck, here in California, you can barely even get home mortgages at 4.65%.
If you are spending enough money that you can't pay off a credit card at the end of the month, you're almost invariably going to get hit with interest rates that border on usury. I've seen people who take advantage of overdraft protection routinely who don't realize that they are paying something like 1400% APR. It's the nature of penny ante loans. People are a lot more likely to default on a $300 loan than a $30,000 loan, so the banks ream people who take out small loans.
Offset opportunity costs. (Someone offers to pay me $500 if I sew them a dress by this weekend, but I don't own a sewing machine. A sewing machine costs $100, but I don't have $100 cash.)
In that case, you have nearly a month to pay off that loan without paying a dime of interest. It is technically credit by the strictest definition of credit, but it's zero-interst short-term credit, which falls pretty squarely into the exception I mentioned before about using credit cards for convenience, cash back, etc. and paying it off at the end of the month. That's a good way to build your credit rating without too much risk of getting buried in debt.
Get rewards points. They're not a particularly good deal, but they're nice when you add up enough of them.
I already mentioned that exception (cash-back cards). If by reward card, you mean crap like airline miles, those are rarely a good idea; you usually get more money by taking cash back on another card and buying miles outright.
Gain the additional protections afforded me by using a credit card. I want to return something, the store says "Our policy says no returns," I say, "No it doesn't." Either they give me my money back or I have my credit card company negate the charge.
And again, as long as you pay it off at the end of the month, that's fine. I do the same. That's not the same thing as real credit—that is, keeping a balance on your card from month to month.
Finally, I would add that for most people, true opportunity costs are very, very rare. The last time I was in a position where somebody offered me money to do something but I needed to buy something first was a "kid enterprise" class at a summer camp in the mid-1980s. With the exception of entrepreneurs, such situations essentially never happen. So when people say, "Don't buy on credit," they're just not bothering to mention the relatively rare occasion when a real opportunity arises.
Congratulations! You win the/. Mangled and Unintelligible Grammar Award for 2011! I know, it's early in the year, but I doubt even the worst New Delhi call center employee who speaks English as his 6th language could manage to construct a sentence that says so much, and means so little.
These sorts of grammar ambiguities are why English sucks as a programming language. I'll admit that the sentence was clumsy, but you parsed it with a rather nonstandard precedence (right-to-left instead of left-to-right). You parsed it as "more than (an order of magnitude less than it)", whereas it was intended as "(more than an order of magnitude) less than it", as English is more commonly parsed.
Therefore, this should be parsed as "If you are buying anything on credit that costs more than 10x less than $20,000" or "Therefore, if you are buying anything on credit that costs less than $2,000."
In hindsight, though, I should have avoided using the term "order of magnitude" in this context, since combining factors with "less" is a little ambiguous by nature. I should have instead said "less than a tenth of that". My bad.
Fair enough. I'm merely using that as an example because that was the example posed to me. I'm not arguing that this particular piece of information was appropriate to release, merely that better sanitization would have made it much less dangerous.
Opportunity cost doesn't really play into it. You can always use computer labs at your school. A laptop is a low-ticket, nice-to-have item, which mean it should never, ever be purchased on credit.
The average savings account in the U.S. contains somewhere on the order $20,000. Therefore, if you're buying anything on credit that costs more than an order of magnitude less than that, you are basically declaring yourself to be poor, complete with a giant, flashing neon sign. Because the working poor are more likely to default on loans, they get higher rates. The smaller the line of credit, the worse you get screwed. As a result, the people who can least afford credit are taken advantage of the most.
Therefore, in general, unless what you are buying costs... I don't know, say 25% of the U.S. median annual income (about $12,500), you should not even consider buying it on credit. Save your money and pay cash. (One might make an exception for "cash back" credit cards, but only if you religiously pay them off at the end of every month.)
I'm not convinced that the large compound would be a giveaway by any stretch of the imagination. Lots of nutjobs rent large compounds....
Besides, the critical piece of information, which you abbreviated as UBL, was not obfuscated as it should have been. It should have been replaced with [TerrorSuspect#1231], e.g.
A man named [Informant#1786] and employed by [TerrorSuspect#1231] as a courier has rented a large compound in [Location censored].
Although this would give away a lot of information if it leaks instantly (right after the guy rented the large compound), after a few weeks delay, that's not nearly as much of an issue. The important thing is to avoid keywords or precise dates that would make it possible for the bad guys to connect the leak with their activities and thus discover that they had been outed.
The same concept could be applied to specific locations that are not outside the publicly disclosed areas of fighting. The point is that the actions are the important part, not the names or places, and that those details can be obscured in the short term without loss of crucial transparency.
Slashdot Mirror
Well, sure, the human race is in its infancy, but by that same standard, the planet is in its forties. So although it's not a crisis yet, it certainly is something we should be worrying about as a species, if only because it might take most of that six billion years to find with a viable alternative.
Cable modems and DSL modems have a life expectancy of maybe a year, in my experience. If you have one that lasts more than two years or so, count yourself lucky. Go buy a new cable modem, and your problem will probably go away.
It's not their local loop infrastructure that they oversell. It's their upstream bandwidth.
You're right. I don't try; I don't particularly care what the rates are because I'm never going to use my card in a way that would incur those rates anyway. That said, I don't consider even 10% interest to be a reasonable rate. My last car loan was under 5% and the prime rate has dropped since then.
And even if the interest rate were approximately the same as the paltry 1-1.25% that most savings accounts earn, it still would be of dubious utility to not pay off those bills at the end of the month from my perspective, as it is incurring unnecessary debt with no real benefit. However, under those circumstances, it might make sense to buy moderately high ticket items (TVs, etc.) on credit if I didn't have the money to pay cash.
The bigger problem is that the people who don't have the money to pay cash will never be able to get credit that cheap as long as they can't afford to pay cash. I can qualify for decent credit card rates because they know I can afford what I spend money on. I can pretty much guarantee that people who buy a $500 TV on credit and pay it off over two years are not going to get 1%, 5%, or even 10% rates on their cards.
And that was my point: if I, as someone with a solid credit history, have to work to get a credit card with low interest, then someone living hand to mouth is going to get the maximum rate allowable by law. And it is never appropriate to pay 25% interest.
Don't get me started on payday loans that charge several thousand percent APR....
Nope. A couple of years ago, the federal government passed laws to limit the circumstances under which the credit card companies could raise their interest rates on a customer. Right before that was scheduled to go into effect, most of the major credit card companies, including Citi and Chase, cranked up lots of customers' rates into the stratosphere because they knew that if they didn't, they might not be able to raise them in the future.
Actually, to be fair, I'm not sure what my other credit cards have as their rates. I got my other cards (which I don't actually use) when I was still in college and had no real credit history, so IIRC, they were set at something like prime + 15% unless they have lowered the rates on the cards since then.
Hmm. Now that I think about it, I recently got a Chase Amtrak card (for the 12,000 free rail point sign-on bonus, mainly). I just checked, and it's at 13 and a fraction, so I guess one might conclude that Citi is just a bunch of wankers.
Or "what should we plant". I can see it now. Survey says:
Ooh. I just noticed that I originally said half a percent. When I first posted that, I was debating whether to say half a percent or a percent, and went with half a percent because it's more typical, even though 1% isn't that uncommon.
I have a couple of accounts that are actually paying around 4%, albeit with low total dollar limits (above which they pay peanuts).
Okay, 1%, 1.1%. The 1% was intended as an average, not a maximum. Either way, it's paltry compared to the 10% APY we used to get when I was a kid, and half a year of interest on $500 at 1.1% is still only $2.75, and is still tiny compared with the interest they'd spank you with if you failed to pay it off before the 6 months is up. :-)
I wouldn't even cross the street for the mere opportunity to earn $2.75 in interest over the course of six months. You'd lose a sixth of those extra earnings just buying the stamp for mailing in the payment. And if you have to actually drive as much as ten miles and back to make the payment, well there went the whole amount. Sometimes credit—even ostensibly free credit—just isn't worth it.
I do too, but with a fairly small dollar limit and lots of strings attached (you have to use their debit card to make at least 15 purchases per month, etc.).
Most money market accounts I've seen are only paying about 1%, and my E-Trade Bank account that was once paying 5% is now paying something like 0.05%. I'm not saying you can't do better than 1%, but you have to search for it.
The problem with those loans is that statistically speaking, most people forget to pay them off, then get charged six months of back interest. But yes, if you feel confident that you will remember to pay it off at the right date, you can make a whopping half a percent interest on that money in a typical savings account.
As for me, I don't think it's worth the hassle of remembering just to make an extra $2.50 in interest and risk getting hit with forty or fifty dollars in interest if I forget.
Even the poorest colleges with 500 students in West Tennessee have computer labs. What kind of school are we talking about here? Is it accredited? Is your degree there actually worth something?
Given a median 22 years worked, that's over $16,000 assuming a 5% average APY. The $20,000 was actually the median, not the mean, BTW. It may or may not be an exact figure, but it's not nearly as far off as you seem to think it is.
Oh, my bad. Somehow I read "three years" as "ten years". You'd have to have invested about $10,000 three years ago to have $20,000 today.
Bear in mind, though, that $20,000 is the median for everyone, not people who have been saving for only three years. The average person works for over 40 years, so that's an expected typical figure for someone who has worked half that long, or 20 years.
Then you're not saving correctly. You should be investing that money in ways that increase in value, not in savings accounts that pay a paltry one percent APY.
If you had put $1,000 in Apple stock ten years ago, you would have $20,000 now, and that stock is continuing to climb at a similar rate, so it's not too late to start.
I'm seeing a similar growth rate for MasterCard stock, although it has only been public for five years, so obviously you couldn't have put $1,000 into it ten years ago. The same principle applies, though.
Obviously past performance is not a guarantee of future results, but it's a pretty good hint.
Depends on a lot of factors: whether you bought a $2,500 used car or an $18,000 new car, whether you can sell your house and rent, whether you have a family that lives with you, etc. Depending on the answers to those questions, the answer may be "no way" or it may be "easily twice that."
Actually, I was being sloppy with terminology. $20,000 was the median.
Only because it's a lot harder to declare personal bankruptcy since 2005. As a result of the increased difficulty, the attorney fees involved increased dramatically. Now, nobody can afford to declare bankruptcy for a few thousand dollars in debt because they would end up owing more to the lawyers than they would get out from under.
Because of that, it stands to reason that the most expensive debts (houses and medical expenses) would be the only real drivers of personal bankruptcy. This isn't an indication that those are the primary drivers of poverty in the U.S., but rather an indictment of the high cost of filing for bankruptcy protection.
From what I've seen, a sizable percentage of the poor show remarkably bad money management skills, and even when they get jobs that pay remarkably well, they still fail to build up any sort of cash reserve. Then, when trouble strikes as it inevitably does every so often, they aren't prepared to deal with it. I'm not saying that this is true for every person who is struggling to get by, just for a sizable percentage. If you're struggling to get by at 23 or 24, it's because your job sucks. However, unless you've been unemployment for over a year or you've experienced a medical disaster, earthquake, tornado, fire, flood, etc., if you're still struggling to get by at 50, it's because you didn't save enough money when you were 23 or 24. Period.
Of course, it's not entirely their fault. The existence of poverty inherently points to the U.S. education system being a complete failure. Our children are never taught even the most basic money management skills in school, so unless their parents have good money management skills, they're pretty much screwed. This keeps the poor poor and the rich rich, offering only limited opportunities for advancement. And that is what we most need to fix about our nation's education system.
And that was my point.
First, I didn't say most Americans had that much in their accounts. I said that was the median amount. Half of Americans have less, half have more.
Second, if you are getting a 4.65% APR on a credit card this year, that's basically a miracle. My credit rating is very good, and despite the fact that I pay my cards off at the end of the month every month, if I didn't, I'd owe over 25% APR on pretty much every card I have. The banks have used the credit crunch as an excuse to double or triple credit card APRs. Heck, here in California, you can barely even get home mortgages at 4.65%.
If you are spending enough money that you can't pay off a credit card at the end of the month, you're almost invariably going to get hit with interest rates that border on usury. I've seen people who take advantage of overdraft protection routinely who don't realize that they are paying something like 1400% APR. It's the nature of penny ante loans. People are a lot more likely to default on a $300 loan than a $30,000 loan, so the banks ream people who take out small loans.
In that case, you have nearly a month to pay off that loan without paying a dime of interest. It is technically credit by the strictest definition of credit, but it's zero-interst short-term credit, which falls pretty squarely into the exception I mentioned before about using credit cards for convenience, cash back, etc. and paying it off at the end of the month. That's a good way to build your credit rating without too much risk of getting buried in debt.
I already mentioned that exception (cash-back cards). If by reward card, you mean crap like airline miles, those are rarely a good idea; you usually get more money by taking cash back on another card and buying miles outright.
And again, as long as you pay it off at the end of the month, that's fine. I do the same. That's not the same thing as real credit—that is, keeping a balance on your card from month to month.
Finally, I would add that for most people, true opportunity costs are very, very rare. The last time I was in a position where somebody offered me money to do something but I needed to buy something first was a "kid enterprise" class at a summer camp in the mid-1980s. With the exception of entrepreneurs, such situations essentially never happen. So when people say, "Don't buy on credit," they're just not bothering to mention the relatively rare occasion when a real opportunity arises.
These sorts of grammar ambiguities are why English sucks as a programming language. I'll admit that the sentence was clumsy, but you parsed it with a rather nonstandard precedence (right-to-left instead of left-to-right). You parsed it as "more than (an order of magnitude less than it)", whereas it was intended as "(more than an order of magnitude) less than it", as English is more commonly parsed.
Therefore, this should be parsed as "If you are buying anything on credit that costs more than 10x less than $20,000" or "Therefore, if you are buying anything on credit that costs less than $2,000."
In hindsight, though, I should have avoided using the term "order of magnitude" in this context, since combining factors with "less" is a little ambiguous by nature. I should have instead said "less than a tenth of that". My bad.
Fair enough. I'm merely using that as an example because that was the example posed to me. I'm not arguing that this particular piece of information was appropriate to release, merely that better sanitization would have made it much less dangerous.
Opportunity cost doesn't really play into it. You can always use computer labs at your school. A laptop is a low-ticket, nice-to-have item, which mean it should never, ever be purchased on credit.
The average savings account in the U.S. contains somewhere on the order $20,000. Therefore, if you're buying anything on credit that costs more than an order of magnitude less than that, you are basically declaring yourself to be poor, complete with a giant, flashing neon sign. Because the working poor are more likely to default on loans, they get higher rates. The smaller the line of credit, the worse you get screwed. As a result, the people who can least afford credit are taken advantage of the most.
Therefore, in general, unless what you are buying costs... I don't know, say 25% of the U.S. median annual income (about $12,500), you should not even consider buying it on credit. Save your money and pay cash. (One might make an exception for "cash back" credit cards, but only if you religiously pay them off at the end of every month.)
I'm not convinced that the large compound would be a giveaway by any stretch of the imagination. Lots of nutjobs rent large compounds....
Besides, the critical piece of information, which you abbreviated as UBL, was not obfuscated as it should have been. It should have been replaced with [TerrorSuspect#1231], e.g.
A man named [Informant#1786] and employed by [TerrorSuspect#1231] as a courier has rented a large compound in [Location censored].
Although this would give away a lot of information if it leaks instantly (right after the guy rented the large compound), after a few weeks delay, that's not nearly as much of an issue. The important thing is to avoid keywords or precise dates that would make it possible for the bad guys to connect the leak with their activities and thus discover that they had been outed.
The same concept could be applied to specific locations that are not outside the publicly disclosed areas of fighting. The point is that the actions are the important part, not the names or places, and that those details can be obscured in the short term without loss of crucial transparency.