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The article repeatedly mentions credit cards as debit but not mortgages (or rental expense). But it seems unlikely that credit cards are the biggest debt/financ
by TomMckenny 7y ago
The article repeatedly mentions credit cards as debit but not mortgages (or rental expense). But it seems unlikely that credit cards are the biggest debt/financial-obligations people hold.
- whatshisface 7y agoMortgages tend to be equal to rent in the long run due to efficient market reasons. Credit card debt is especially ruinous because unlike mortgages and car loans, there's no asset for the bank to go after if you default. As a result the interest rates are naturally higher because the people who roll over their balance month to month have to pay for the people who go bankrupt at a casino.
- TomMckenny 7y agoI do not claim credit card debt is smarter than a mortgage. I claim it is a far smaller percentage of personal debt. For example, reducing housing cost by a few percent would have a vastly greater effect than reducing any other source of debt by the same percent. If a person is in debt, it's not primarily because they bought a latte, it's because housing cost are high. So if we're looking at debt per se, then it's housing we should be looking look at.
- gridlockd 7y ago> Mortgages tend to be equal to rent in the long run due to efficient market reasons. Not really, the property price and mortgage rate you pay is what you individually agreed to, not whatever the "efficient market" says it may be on average "in the long run". There's tons of macro factors that are currently driving real estate prices well beyond what's justified by potential rent income. You're most likely better off renting.