How much bad debt do you have?

$0 bad debt. We have a card at $10,000 limit that we only use for online shopping but pay it off every months. No car leases, we buy cars on cash always. No other debt of any sort.

Nothing negatively geared either. Our only risk is if interest rate doubles out of nowhere.

 

Think like a bank...

For people saying they have zero bad debt but you have money that is able to spent on the credit card that is included as bad debt from a banking perspective.

So to me if you have a cc regardless if it is paid off or not you have the total limit as bad debt.

You can argue that your credit card is paid off each month but the bank is the one who will assess your credit cards as fully maxxed out as this credit is available to you and you do not have to pay it all off.

FYI I do have a credit card and I do pay it off each month, never had a late payment as the account is automatically debited however I still include the full $6,000 as bad debt.

 

Yes, my mortgage consultant in my most recent applicant had me put all my CC limit as bad debt. His reason was that although you have $0 balance right now but your wife can spend all that in one night if she likes stuff in those late night advertisements. So for serviceability its a problem.

 

This is why I was saying it is bad debt, yes it can be of benefit for people who are able to utilise it correctly however it is still classified as bad debt.

 

I must have the lowest credit card limit of everyone, $500.. Seems almost pointless as I barely use it.

I obviously have a higher one for the business, but in terms of personal bad debt - not a lot.

 

Hope you don't pay a $50 annual fee on that. That's like a 10% interest rate

 

From memory it is about that, but I don't pay interest on purchases as it has (from memory) a 60 day interest free period. Probably more worthwhile if I used the thing more often or had a higher credit limit, but it doesn't bother me too much as I kind of like it there given my bank accounts are all over the shop and transfers take one business day to get to me.

I'm that person that never carries cash and keeps minimal money in my personal accounts.. Probably because I'd spend it on crap I don't need otherwise

 

Yep, 8k on the latest one.

Total CC limit 5k, always paid off.
No one here has mentioned HELP/HECS debt. I've got about 8k of that left, and my wife has 14k.

So around 27k unsecured then.

Hmm mine too. It was a fun day when the latest purchase pushed that minus well into the 7 figures.

 

Over here im aiming for 500k by the end of this year! (Assuming were talking about the good bad debt, you know for investments ....and sports cars )

Im curious, for those of you who secure your investments/PPOR, instead of dropping cash (like 20% when avoiding LMI), what do you use? Bonds? Shares?

 

I put every possible dollar on my credit card which I set to pay off the absolute minimum every month which leaves more cash in my offset accounts against properties. As my card has a great rewards system, I exchange the points to around $150 worth of caltex gift cards every month which basically covers my petrol use

So in that sense I always have a considerable amount of 'bad debt'

 

Went to the boat show on the weekend and no such thing as bad debt...

I wanted to tell myself

 

same as many here. i use credit card because of rewards points. paid off everymonth automatically. i have mortgage and that's it. cars are always cash.

 

About $80k across 3 different credit cards

 

If your only paying the minimum on your credit card each month then the interest costs are well and truly going to eat up your $150 of petrol cards every month??

 

Really?

Last time I looked interest on cc debt was more than quadruple the interest you may save with money in an offset on a PPOR. Figures are even worse if offset attached to IP loans.

I doubt $150 in petrol balances the books.
Marg

 

Pretty sure @Simon L was being sarcastic No way is anyone actually that misguided.

 

I think Simon was bored and decided to dig up an old thread.
Go do some work @Simon L!

 

Sorry must've had a brain fart. I meant I pay off the full balance at the end of each month within the interest free period. Back to work for me

 

Only Steve smith can have a brain fart.

 

I abhor unsecured consumer/doodad debt these days, and won't have any...we use our CC's a little bit; but pay them out each month to avoid interest....however.....

Up until about 3 months ago; we had none, zip zero...we have 3 CC's - 2 x personal with limits of $35k and $15k respectively (will be reducing these limits dramatically in the near future), and a Business CC with a $5k limit for emergencies.

Even our 3 cars (all through our Company) are zero debt.

But; a little over 3 months ago, we ran into a situation where our Ubud Resort development (see here; Ubud development ) ran out of actual cash money from all parties to get it over the line at the 11th hour ....

My wife and I had injected every cent of cash savings we had, and it fell back on us to provide the remaining funds to finish it off, otherwise it would still be sitting there almost complete, but not...

So; all 3 cards are at currently at close to maximum able to be spent - until the revenue starts to roll in from the Resort (it opened on Aug 1; so shouldn't be long)....much of this CC spending has been via cash advances - fabulous interest bills!

Geez it's great fun....