- I hope we’re supposed to infer that Holly means credit card bills simply don’t have to be paid until next month, not that she thinks having a credit card means you don’t need money at all. That’s what I thought when I was three, but of course comic strip children can be really, really stupid.
- I wonder whether Val bought the book using cash.
Comics I Don't Understand 
My sister was not quite Holly’s age, but considerably more than three, when she suggested that we didn’t need any money (cash) because there were plenty of checks left in the checkbook.
“but of course comic strip children can be really, really stupid”
As can, apparently, a large segment of the population at large…
(Although, who’s really the stupid one, the guy who lives large, maxes out his credit cards as long as he can, and then declares bankruptcy and walks away, or the suckers who dutifully live within their means?)
Bankruptcy isn’t a get-out-of-hock-free card. Recent bankruptcies on your credit report can make it very difficult or impossible to obtain credit. And you can lose almost all of your valuable assets in the process.
Plus, of course, if you had a recent spending spree just before filing for bankruptcy, the bankruptcy court will (rightfully) decline to discharge those debts.
That said, it IS possible to live your life/arrange your affairs so as to not pay your debts. The common legal term for this is to be “judgment-proof” and basically involves not having any negotiable assets. Some people choose this intentionally, though far more fall into it than steer into it.
My wife had someone come in to talk to her class of middle graders about money management. The speaker asked the kids “If you’re having trouble meeting your budget for the month, what are some things you could do?” The first answer she got back was ‘Check Into Cash!’ (a payday loan place), complete with the student making the check mark sign from the commercial. (The speaker’s response, obviously, was “Oh, dear God, don’t do that.”)
While pure stupidity sometimes figures, I suspect many individuals simply indulge themselves in the belief that they’ll be less broke next month, or that they’ll be able to refinance easily when their ARM blows up, or those Beanie Babies are really worth something. Perhaps the most cringeworthy episode of “The Office” revealed that Michael Scott once promised full college scholarships to a grade school class on the assumption he’d be a millionaire by the time they finished high school. Well …
I would assume that the kid understands how credit cards work. She just wants Mom to pay for it.
“Plus, of course, if you had a recent spending spree just before filing for bankruptcy, the bankruptcy court will (rightfully) decline to discharge those debts.”
Unless, James, you’re a giant corporation.
Giant corporations tend to have creditors which are ALSO giant corporations, and those OTHER giant corporations tend to actually show up at the creditor conferences. Most giant corporation bankruptcies are chapter 11, not chapter 7, and therefore the cooperation of the creditors in the bankruptcy proceedings is usually pre-negotiated.
I forget the exact quote, but…
If you owe someone $100 you don’t have, you’re in trouble.
If you owe someone $100 million you don’t have, they’re in trouble.
Arthur, if you owe somebody a thousand dollars, they own you. If you owe somebody a million dollars, YOU own THEM.
“If you owe somebody a million dollars, YOU own THEM.”
The U.S. Treasury owes trillions…
Thanks, Bill. I think that’s much closer to the original version.
Holly’s a teenage girl, so she’s not so much stupid as she is a sociopath. All that matters is that SHE doesn’t have to pay the credit card bill. All else is magic, created for Her benefit and executed by the little people for Her greater glory.
I’m thinking Holly does not understand since she fails to realize that using a credit card only means delaying the use of cash (to pay it off). A far too common mistake made even by older people.
US – We put everything we can on our credit cards. We primarily use 3 of them. One is a personal card and one is a business card – depending on which gives us a bigger percentage cash back we use that use that card for that kind of purchase. The third card we normally use is one that has a $1000 limit. This is used for online and other purchases that are being not being done face to face. The $1000 limit – which we have told the cc company not to authorize charges over that amount – is to limit problems if someone gets the number.
From time to time we will use another card if there 5% this quarter is something we buy. We will use our credit cards once a year to keep them active. (Yes, we did not get new cards on an account because we had not used them in several years.). We also each carry one card in our wallet that the other does not carry – we have done this since since the original “Vacation” movie. If one of us lost their cards, the other would have a card to use. When we travel we put a different card in a spare wallet that also has some cash and is not out of the RV when we are. If we we robbed or both lost our wallets, there is still access to cash and credit cards.
All credit card receipts are matched to the statements. All accounts are paid in full – every month. Okay, one time we only paid half the statement amount. It was one of those odd times when interest rates for the credit card and bank interest rates were almost equal. We used to use Robert’s payout of his sick pay in September to pay the vacation credit card bill. One year the payment was to be made in October. Rather than take money out of savings, we paid half and then paid the other half the next month – with the full payment of the next month’s bill. We also pay stuff like insurance in full to avoid fees for paying part.
SIL – she spends money as if she had the Queen of England’s income. Her husband tries to keep up with her. He had a business that his dad bought him and ran it into the ground as he has no business training and barely graduated high school. (They are now in their 50s.) He just sold the business and has had 3 jobs in less than a year as none he finds he can make the $250,000 plus that they need to live on as they think everyone lives on. (This has been said in front of 3 people – us and BIL’s mom – who are living primarily on Social Security – her more than us and his nephew who works fast food and lives in the with BIL’s mom in a converted garage.)
The concept of spend less does not occur to them – specially to her. She just threw a wedding style party for her younger daughter’s first communion. The daughter (and her older sister and SIL) each had 2 dresses custom designed by SIL and made by a dressmaker she hired – one for the ceremony and one for the dinner 2 weeks later. We are guessing that the entire thing cost over $20,000.
At the same time she has found a college for older niece to study architecture at that is $35.000 a year and it is a 5 year bachelor’s degree. She is telling us that it is okay because niece will get a scholarship to pay for it. It is a 2 year program and then one applies all over for the last 3 years – so she will have to be lucky enough to get scholarships both times. If she went to a state university in NYS based on what they say their income is, she would go free. Their income is low enough for Medicaid coverage. (I presume under expanded Medicaid.) Why is niece going to study architecture? “She is real good at putting together fancy Lego kits.”
When I went to college – with one of my sisters 5 years behind me and the other 7 years behind her my mom went back to work (and i worked 3 part time jobs and still finished in 3 years instead of 4 to keep the cost of college down). SIL could go to work and help out with the expenses – particularly since most of them are hers, but they are debt like crazy and they are in denial about where they are heading.
Hard to believe she and Robert came from the same house.
It’s possible that this comic is written by/for the “credit cards are a way to end up in debt” crowd, and the joke was supposed to be “she thinks it’s ok to use a credit card for a shopping trip”. I’ve definitely known people (who had money problems in the past) who are anti-credit card because they took the “credit” part too literally and ended up in financial trouble. (Me, I like the convenience when it comes to renting cars, shopping online, getting a hotel room, etc.)
Credit cards are easy if you understand assets and liabilities. If you have $800 in your checking account and you use your credit card to buy a $ 300 thing, now you have a liability of $300. $ 800 minus $ 300 = $ 500 which is how much money you really have. You can even keep a separate “net” register from which you deduct the $ 300 now to know how much you have left to spend in your checking account.
I have encountered people who get angry when the bank raises their credit limit because, apparently, they have so little self-control that they’ll immediately spend their way through it. I really cannot comprehend how such people think…
I like credit cards. I always pay them off in full, and I get cash back. My Bank of America VISA is my go-to card. With my associated Merrill Edge investments, I get 5.25% on gas, 3.5% on grocery, and 1.75% other. I definitely don’t spend any more with them, as I’m a cheap-o.
Dave in Boston – raising one’s credit limit can also affect one’s credit rating.
We don’t like using our credit cards to order things, but there are times it cannot be avoided, so we took one of our credit cards that we did not normally use and contacted the company and told them to cut the limit to $1000 planning to only use that card (and only that card) when we needed to order something with a card and limit how much could be charged to it for security reasons.
The employee I spoke with told me that was a not a problem,but, she explained, it would no longer be a gold card – like that mattered to me.
Raising your limit normally improves your credit score. If they do a hard pull, it might temporarily reduce the score due to the inquiry.
Fraudulent charges to a card are the issuer’s problem. If you’re really worried about that sort of thing, a card that allows one-time limited numbers for online shopping make sense.
Dave in Boston: You really can’t comprehend the idea that people want to place limits on their own lack of self-control? Impulse control seems like a pretty basic human trait to me.
I don’t have a problem with self-control when it comes to credit bars, but I won’t buy a pack of Nutty Bars, because I know if they’re in the house, I’ll eat them all within a few days, and I don’t want to. Sure, no one is forcing me to eat them all in a few days, but mmmmmm, Nutty Bars.