How much is too much debt?

[jon applespeed]

The only thing you should owe on your credit card is this month's charges.
The only other debts you should have are a home mortgage and a car payment.

For flight training, you can get all your licenses/ratings for about $30,000. I would say $50,000 is the absolute most (if you go to a super expensive school like ATP). I personally did not (and will not) take out a loan for flight training. I belive you should work, save money, and invest. If you plan ahead, you don't need to take out a loan. I have no idea how you can pay off a $30-50,000 loan on regional FO pay.

For college, it is acceptable to get a loan. It is very important. However, I think it is not smart to have a loan for both flight training and college at the same time. THAT IS A LOT OF DEBT!

This is the best answer. A credit card is best for only itemizing and organizing your bills. In fact, most people pay off their balance every month. It's from just a minority of people who are buried by interest and debt that the credit card companies make their biggest profits from. Don't become one of those people.

The only thing that most people NEED that they can't afford to pay next month are house and car. Flight training can be had cheaper elsewhere, with the same quality.

 

[Murdoughnut]

This is the best answer. A credit card is best for only itemizing and organizing your bills. In fact, most people pay off their balance every month. It's from just a minority of people who are buried by interest and debt that the credit card companies make their biggest profits from. Don't become one of those people.

The only thing that most people NEED that they can't afford to pay next month are house and car. Flight training can be had cheaper elsewhere, with the same quality.

Actually most people carry credit card debt - some carry so much that they'll never get out. It's one of the most serious problems affecting our nation. Of course the government does the same thing.

 

[OnTheFly7]

Unless you're already in, military doesn't pay for the law degree. Current service members can apply for FLEP (something law education program??) which will pay them to go to law school, but civvies have to pay for themselves. (I've been nosing around the JAG recruiting sites this week. )

If you are seriously interested in JAG, PM me. The GF's brother has been in JAG for quite a while. Coming back to Virginia for a year (been in Germany for 7) and then it seems he is going to Italy to be one of the main JAG counsels for the UN.

I would see if I could get some answers for you, perhaps have an email addy or something to that effect. Just shout if you need to!

 

[SpiraMirabilis]

$8,850,377,440,355.52

 

[Murdoughnut]

$8,850,377,440,355.52

... and China holds the other end of the stub on most of that. Technically, they're paying for the war in Iraq.

 

[jon applespeed]

Actually most people carry credit card debt - some carry so much that they'll never get out. It's one of the most serious problems affecting our nation. Of course the government does the same thing.

The average credit card debt is over $8000...but
http://moneycentral.msn.com/content/Banking/creditcardsmarts/P74808.asp

In much the same way, a relatively small population with huge credit card balances can skew the average to make it look like the typical American is carrying a much bigger debt load than he or she actually is. Consider:

• 23.8% of American households have no credit cards at all -- no bank cards, no retail cards, nothing.
• Another 31.2% of the households the Fed surveyed paid off their most recent credit card bills in full.
• So together, the households that owed nothing on credit cards equaled 55% of the total.

From wall street journal:
A good exercise is to periodically tally the balances on all your consumer debt, like credit cards and car loans (but not home loans). Divide the total by your annual gross income. You want that figure below 30%, according to a common rule of thumb.

http://online.wsj.com/article/SB117...ORDS=credit+card+debt&COLLECTION=wsjie/6month

 

[SpiraMirabilis]

... and China holds the other end of the stub on most of that. Technically, they're paying for the war in Iraq.

No they don't actually. Most of it is owed to ourselves in some way, i.e. domestic debt. They don't even own a plurality of it, but a significent amount.

 

[greaper007]

Yeah credit card debt is bad. I really hate it when people get holier than thou about credit cards though. I personally have a large amount of credit card debt. My car is 17 years old, I don't have a motorcycle and I'm still rocking the David Clarks. My wife and I look at our credit card debt as high interest student loans. We could have gone crazy and not spent any money while we were in flight/graduate school. Instead we ran up our credit cards during about a two year period. Yes we worked at the same time. Right now we both have jobs so we stopped using them. It will take about a year and a half to pay them off. We'll pay less than 600 in interest.

The fact is under the current administration securing low interest student loans and grants has become harder than ever before (along with mental health funding, my wife's field). So some of us bite the bullet and just run up debt. It's that or take a lot longer to get through school. Right now I'm a pilot at a regional and she's a PHD at 26 and 30 respectively.

 

[Murdoughnut]

No they don't actually. Most of it is owed to ourselves in some way, i.e. domestic debt. They don't even own a plurality of it, but a significent amount.

I'm not certain of the exact percentage, but I know if the Chinese were to to cash in all of their Treasury Bonds tomorrow, it would destroy the U.S. Economy, and probably the entire union. Smart thinking on their part, I suppose. They have us by the balls. Read "Empire of Debt" for more detailed discussion.

 

[LAFF]

This is the best answer. A credit card is best for only itemizing and organizing your bills. In fact, most people pay off their balance every month. It's from just a minority of people who are buried by interest and debt that the credit card companies make their biggest profits from. Don't become one of those people.

The only thing that most people NEED that they can't afford to pay next month are house and car. Flight training can be had cheaper elsewhere, with the same quality.

If you pay your card in full the cerdit card companies have a special name for you...Its 'slacker'

If you don't pay they call you a 'revolver' and will likely increase your limit.

Unfortunately true...

-LAFF

 

[N826AW]

It depends on what kind if debt it is.

Debt is borrowed capital. IMHO, if your gains from using the capital are greater than its cost, than it's good debt.

If you have not cash in the bank an max out your cards to purchase plasma TVs and video games, that's generally not good debt.

 

[SpiraMirabilis]

I'm not certain of the exact percentage, but I know if the Chinese were to to cash in all of their Treasury Bonds tomorrow, it would destroy the U.S. Economy, and probably the entire union. Smart thinking on their part, I suppose. They have us by the balls. Read "Empire of Debt" for more detailed discussion.

China owns about $200-300B of US Treasuries. Japan has double that. This is one of the larger myths of our day. If both tried to cash them in at once (after taking the penalties) it would drive the value of the treasuries down along with the dollar and US interests rates up. If China cashed all of theirs in at one time it would be merely very inconvienant.

The US dollar has been THE reserve currency like this for quite a while although it has been losing a little ground to the Euro recently in that department.

 

[Hacker15e]

Personally, I think *any* debt is too much. You'd be amazed at how far your money goes when you're not paying down debt each month.

Realistic? I think so, yes.

 

[autiger10]

Ok, now I'm going to continue with this "age old" question: I truly want to go to a flight school, but I can't afford to not get a loan. I would work, but it would have to be part time. Even if I'm working, there's no way that I can pay as I go - well I guess there is, but it would take me too dang long to achieve my flight goals. Are there any grants available out there? Anything to help out? Just looking for someone to throw me a bone. I know that 55-60k is a tremendous amount to go in the hole with for an industry that is unpredictable at times. Thanks for the help all

 

[killbilly]

I'm not certain of the exact percentage, but I know if the Chinese were to to cash in all of their Treasury Bonds tomorrow, it would destroy the U.S. Economy, and probably the entire union. Smart thinking on their part, I suppose. They have us by the balls. Read "Empire of Debt" for more detailed discussion.

China owns about $200-300B of US Treasuries. Japan has double that. This is one of the larger myths of our day. If both tried to cash them in at once (after taking the penalties) it would drive the value of the treasuries down along with the dollar and US interests rates up. If China cashed all of theirs in at one time it would be merely very inconvienant.

The US dollar has been THE reserve currency like this for quite a while although it has been losing a little ground to the Euro recently in that department.

Plus the fact that if the Chinese cashed in all their chips simultaneously, they'd effectively damage their biggest trading partner and destroy the markets for their goods. If they do THAT, their ballooning economy would pop like a soap bubble.

It might be annoying on paper, but they're not stupid.