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Borrowing money to get by during an economic downturn


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    Wanted to see what we've learned since the beginning of this mess. Still there is a lot of panic, and rightly so, but I was wondering what others might have figured out to get through these strange times, especially when it comes to borrowing money. Are banks still a viable option? When should you consider borrowing from family and friends? I guess when you can't pay rent, or make your car payment. When is the right time to borrow money in an economic downturn, period? Is getting in debt with a bank or creditor the right thing to do when we are so unsure how things will pan out for the American economy?
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    Depends on the kind of debt. If its interest-free, like say opening up a new credit card with a 12-18 month 0% intro APR, then I think that's a very logical type of debt to accrue if you need to pay the bills. Gives you a year or more to figure things out and pay it off before interest hits.

    Or same logic with new credit cards with low to zero balance transfer fees when you first sign up. And with both of these options, there are usually credit card companies that offer a few hundred dollar sign up bonuses, on top of 0% interest/BT.

    I have used both of these methods a few times over to either pay off date faster and avoid interest accruing OR just to give myself a few thousand dollar buffer when funds are running unexpectedly low.

    Helps to have good to great credit. But most credit card companies will approve you for a new card pretty easily, for $3-15k, in my experience, even with just OK credit.

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    BlankCheck Wrote: When is the right time to borrow money in an economic downturn, period? Is getting in debt with a bank or creditor the right thing to do when we are so unsure how things will pan out for the American economy?

    That's a really tough question and there are so many factors in play, with someones credit history and score being towards the top of the list. If you have good to great credit and a low debt-to-equity ratio and are wondering how you're going to pay rent because you're out of a job then maybe looking into a line of credit may be a viable option because the alternative could wind up being a million times worse. However, if you don't have good or great credit or already have a lot of debt then it may be difficult, if not impossible, to get a bank to lend more.

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    WyattTown Wrote:Or same logic with new credit cards with low to zero balance transfer fees when you first sign up. And with both of these options, there are usually credit card companies that offer a few hundred dollar sign up bonuses, on top of 0% interest/BT.
    This is a good option for a lot of people, but it's imperative to pay off all the debt before the 0% interest intro APR period is up because that interest has been compounding for the entire time and people can be in for a rude awakening if they have a balance.
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    Old Sport Wrote:
    WyattTown Wrote:Or same logic with new credit cards with low to zero balance transfer fees when you first sign up. And with both of these options, there are usually credit card companies that offer a few hundred dollar sign up bonuses, on top of 0% interest/BT.
    This is a good option for a lot of people, but it's imperative to pay off all the debt before the 0% interest intro APR period is up because that interest has been compounding for the entire time and people can be in for a rude awakening if they have a balance.

    1000%. Very important to note. But also, not to endorse being irresponsible, but if you are clever about it and your credit allows, you can always open up yet another credit card with similar/same balance transfer intro offer, and push off deadline for another 12-18 months if you find yourself unable to pay it off with the first new card in time.

    Of course you can only play that game for so long. But you can do it for a few years if you need to. And its far better than a bank loan with interest, or any other kind of loan with interest as long as you eventually pay it off.

    Also keep in mind, if you do this, you still have to pay the minimum monthly due. So you can't just throw $5000 on a credit card and forget about it for a year. That's the only other stipulation. Usually the minimum is 1% of total balance. So it won't be much, but make sure and ALWAYS pay it and on time; avoid any late fees.

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    BlankCheck Wrote: Wanted to see what we've learned since the beginning of this mess. Still there is a lot of panic, and rightly so, but I was wondering what others might have figured out to get through these strange times, especially when it comes to borrowing money. Are banks still a viable option? When should you consider borrowing from family and friends? I guess when you can't pay rent, or make your car payment. When is the right time to borrow money in an economic downturn, period? Is getting in debt with a bank or creditor the right thing to do when we are so unsure how things will pan out for the American economy?
  • Are you sure you want to delete this post?
        
    BlankCheck Wrote: Wanted to see what we've learned since the beginning of this mess. Still there is a lot of panic, and rightly so, but I was wondering what others might have figured out to get through these strange times, especially when it comes to borrowing money. Are banks still a viable option? When should you consider borrowing from family and friends? I guess when you can't pay rent, or make your car payment. When is the right time to borrow money in an economic downturn, period? Is getting in debt with a bank or creditor the right thing to do when we are so unsure how things will pan out for the American economy?
    I need help to get by during this