5 ms·

Your definitions don't match conventional understanding.

by Simon_says 7y ago

izzydata 7y ago
Well that doesn't tell me much of anything, but I love that sentence.
- dgzl 7y ago
  Credit is having the ability to obtain debt. Once you use the credit, you have debt, regardless of when or if you pay it off.
  - kazinator 7y ago
    You're not in debt if at all times while you are using this credit, you actually have the cash to pay it off. Then you're using credit for convenience, not as a loan because you don't have money. People using crdit strictly for convenience, always paying their bill within the interest-free grace period, are not in debt (on account of that credit card). Even people with significant loans are not necessarily in debt. If you borrowed $300K to buy a $400K home that is now worth $500, you still have a loan, but that is offset by equity in the property. It's not the same as borrowing to buy food, which is consumed and gone.
    - dgzl 7y ago
      Is this fact? Because my intuition is making me believe you're wrong. If you're successfully paying off your CC, then what are you paying off if it's not debt? IMO, to be in someone's debt means you have to pay them back, which is regardless of what cash you have. Are you trying to say that if I borrow money from someone and I actually have the cash to pay them back, then I'm not actually in their debt?
      - izzydata 7y ago
        I don't know, but one of these two things is not a useful metric for what this article is trying to claim.
      - kazinator 7y ago
        "in someone's debt" is not the same as "in debt". "In debt" is a loaded term which actually refers to a deficit situation, rather than the mere existence of loans. If we say, "OMG, X% of Americans are in debt", the reasonable interpretation is that are under financial strain due to actually running a deficit, not that some of them owe their friend ten bucks for yesterday's lunch because they forgot their wallet at the office.
        deleted 7y ago
        [deleted]
kazinator 7y ago
They absolutely do. An interest-free loan that you know you will pay off on time is only "debt" academically. It's just shuffling money between accounts, effectively. After each credit card purchase, in theory, you could log in to your online banking and pay off the balance immediately with cash you have on hand in another account. You could do that even before the purchase transitions from pending to posted to your account. Basically, you're not in debt. You're "in debt" when your liabilities exceed your assets. You have negative equity, and so these debts are claims against your future income. That's what "in debt" means, in a nutshell: your future income belongs to someone else. If we are going to write a story about how some population segment is "in debt", but we label everyone as "in debt" if they have any credit card balance, that is blatantly dishonest.
- chrisseaton 7y ago
  You are 'in debt' to the credit card company. They're 'in credit' to you. That's why they're called a 'credit' card company. When you spend your credit you're creating debt. When you pay your card off you're paying off debt.
  - kazinator 7y ago
    "In debt to X" is not "in debt"; it's not how language works. "In debt" is a loaded phrase which means that the interests against you exceed your assets. It's a common term, for which the more formal word is "deficit". That's the interesting thing if you want a story on lots of people being in some kind of financial strain. A temporary loan purely for transactional or cash flow convenience does not represent any sort of financial strain.
    - deleted 7y ago
      [deleted]

Your definitions don't match conventional understanding.

izzydata 7y ago

Well that doesn't tell me much of anything, but I love that sentence.

dgzl 7y ago
Credit is having the ability to obtain debt. Once you use the credit, you have debt, regardless of when or if you pay it off.
- kazinator 7y ago
  You're not in debt if at all times while you are using this credit, you actually have the cash to pay it off. Then you're using credit for convenience, not as a loan because you don't have money. People using crdit strictly for convenience, always paying their bill within the interest-free grace period, are not in debt (on account of that credit card). Even people with significant loans are not necessarily in debt. If you borrowed $300K to buy a $400K home that is now worth $500, you still have a loan, but that is offset by equity in the property. It's not the same as borrowing to buy food, which is consumed and gone.
  - dgzl 7y ago
    Is this fact? Because my intuition is making me believe you're wrong. If you're successfully paying off your CC, then what are you paying off if it's not debt? IMO, to be in someone's debt means you have to pay them back, which is regardless of what cash you have. Are you trying to say that if I borrow money from someone and I actually have the cash to pay them back, then I'm not actually in their debt?
    - izzydata 7y ago
      I don't know, but one of these two things is not a useful metric for what this article is trying to claim.
    - kazinator 7y ago
      "in someone's debt" is not the same as "in debt". "In debt" is a loaded term which actually refers to a deficit situation, rather than the mere existence of loans. If we say, "OMG, X% of Americans are in debt", the reasonable interpretation is that are under financial strain due to actually running a deficit, not that some of them owe their friend ten bucks for yesterday's lunch because they forgot their wallet at the office.
      - deleted 7y ago
        [deleted]

kazinator 7y ago

They absolutely do. An interest-free loan that you know you will pay off on time is only "debt" academically. It's just shuffling money between accounts, effectively. After each credit card purchase, in theory, you could log in to your online banking and pay off the balance immediately with cash you have on hand in another account. You could do that even before the purchase transitions from pending to posted to your account. Basically, you're not in debt. You're "in debt" when your liabilities exceed your assets. You have negative equity, and so these debts are claims against your future income. That's what "in debt" means, in a nutshell: your future income belongs to someone else. If we are going to write a story about how some population segment is "in debt", but we label everyone as "in debt" if they have any credit card balance, that is blatantly dishonest.

chrisseaton 7y ago
You are 'in debt' to the credit card company. They're 'in credit' to you. That's why they're called a 'credit' card company. When you spend your credit you're creating debt. When you pay your card off you're paying off debt.
- kazinator 7y ago
  "In debt to X" is not "in debt"; it's not how language works. "In debt" is a loaded phrase which means that the interests against you exceed your assets. It's a common term, for which the more formal word is "deficit". That's the interesting thing if you want a story on lots of people being in some kind of financial strain. A temporary loan purely for transactional or cash flow convenience does not represent any sort of financial strain.
  - deleted 7y ago
    [deleted]