Economic collapse: Pay off Credit cards or no?

Woodsman

The Living Force
I've been carrying around a pile of debt for some years now, and I've been slowly chipping away at it. In the last year I've picked up several decent bits of work. By scrimping and living cheaply, I've managed to knock my debt down by half. This is good!

I'm working now on another big contract job, and hope to be paid soon. I was planning to throw the proceeds from that into the debt hole, which would cut down my personal debt by more than two-thirds again, bringing me much closer to the finish line. That would be great!

Except...

The question I have is this: If we're seriously looking at an economic collapse in the next few months, and I have this big pile of money coming in just prior... I can't help but wonder if I might be foolish to feed it to the Beast when we have this fairly unique heads-up that things are going to likely fall apart in the next few months.

Is there any value in paying off personal bank debts? Does it make more sense to invest in other things?

What do banks do in times like these with debt holders?

What does hyper-inflation imply for personal debt holders?

I thought I'd put the question out to the SOTT forum. I can't imagine I'm the only one with personal debts these days.

So... What do people think?
 
Hi Woodsman,

Interesting questions for which I don't have any ready made answers -- but I would be eager to know, just in case others around me would ask the same or similar.

Personally I've never had any debts whatsoever in my whole life, so I really don't know anything about it.

Nevertheless in the present situation and considering expected developments, I always would opt for minimal repayments: just enough to stay eligible for expansion of your credit line in case such a need would arise. All the rest is better spent on investments which would prop up your chances of surviving the coming turmoil IMO.

Only you can be the judge which items would match that category.

Hope this helps a bit. :)

EDIT: minor spelling
 
This article came out recently on the occasion of the expected economic collapse.
I quote:
NOTE: This is the 12 things you must do before the upcoming economic collapse announced for 2015!

Author: Zrinka K.
Date: Friday, January 30 2015 at 14:33

Survival is not guaranteed, salvation is!

The famous economic analyst and American journalist Dave Hodges who through their analysis announced economic collapse has now made a list of 12 things you must do in order to survive what's coming our planet. That the economic collapse is actually inevitable and that he will soon celebrate our lives, but everyone knows it as it is quite clear that elite massive depletion of almost all citizens of the world, at the moment grabs unbearable wealth before the collapse. So based journalist Hodges people who want to survive should prepare well to avoid being brought before a fait accompli. Tens of thousands of people in the United States, but also around the world are already preparing for this scenario, and some have gone so far that they even built underground houses. This whole movement of people who are preparing for the economic chaos has become a real phenomenon that is spreading rapidly, and the US Government and the whole movement named the terrorist so many are prepared in strict secrecy because it is in the United States suddenly became forbidden, pile foods as only proof that the system does not want to be ready. This is the 12 things you should pay attention before the economic collapse, according to Dave Hodges.
Prepare for the worst and hope for the best for.

First need is money to prepare
The highlight of nonsense would be to leave the life savings in an institution that is planning to steal from you. You must redirect your money on more important things.
If you've noticed more and more it becomes difficult to raise life savings from the bank, and that if you want to be completely disable access to your money.

There are certain banking laws that you must pay attention: Report on the transaction of money, report of suspicious activity and structuring.

Statement of transaction money
The law, banks are required to submit a report on any withdrawal of cash or deposit exceeding € 5,000 in a single day. The law is designed to prevent money laundering and counterfeiting.
To keep it all in accordance with the law, financial institutions must require personal information, transaction information and personal number of the person conducting the transaction.

Structuring and report suspicious activity
Certainly appears genius who will raise 8,499 euros, to which the bank should not react. However, it's not that simple. The Bank can refer to report suspicious activity that is intended to make it harder to circumvent the provisions of the previous law.
Structuring the transaction involves raising the suspicions of many times in order to circumvent the law to raise limited sums.

Law enforcement
Banking laws are very strict. The government can seize your bank account if it detects that the offense was committed. The government can take all your money and without a court decision. Any trial with the government would be in vain.

The withdrawal of money from banks
The best way to give you money does not remain stuck in the bank is that it does not even put in the bank. Use cash whenever possible.
Eventually, it does not hurt to have multiple accounts in a variety of major banks, as you will be able to quickly pick up all the money in the event of a crisis.
In the event that you become the target of the investigation, in no case do not let examined without the presence of a lawyer. Often people end up in jail or pay heavy fines, but not for crimes, but because they were deceived investigators.

2. Make a list
Get food, water, and improve the safety of your home. If you do not own a large dog, consider how to get at least one.
Make a list of everything that you need.
All my purchases pay in cash. I do not want the wrong people know what you're up to.

3rd rural against urban
We live in the present and the reality that we can not ignore and often we can not move to a rural part of the country on business. However, the chance of survival of economic chaos 10 times higher in rural areas than in urban areas. Look at that, if at all, you can find a secluded place and you are traveling to work in the meantime.

4. repayment of loans
It would not be bad to pay off your debts. In the case of economic collapse probably will not have a job, your savings and pension fund will be confiscated. If you do not repay debts, you and your family you could end up on the street because you could not repay the debts. (It seems that the economic collapse in Croatia has already started! AN)

5th Buy gold and silver as long as you can afford
Goldman Sachs sold gold. The elite and the country BRIKS collect gold. These methods only indicate what will be worth when it comes to collapse.
Storing gold and silver is a strategy for economic survival, which will pay dividends when the smoke starts to clear.

Become sixth raw before someone becomes rude to you
The key is to immediately eliminate all unnecessary costs. Make yourself a functional capital.
Start your work at home to increase cash flow. Start a business that does not require much investment. Even if you do not earn a lot, you will succeed to avoid the tax, whereby you will earn enough money to secure your survival equipment.

7th Make and keep your food
As for the storage of food, you have to start with that right now. It is recommended that keeps food for at least two years. You need to perfect the growing food at home. Also, do not keep all the food in one place, in case you loot.
The biggest threat to their survival will be death due to dehydration or starvation. Contaminated water will also be a problem. There are many solutions for filtering and purifying water. You may want to get a water filter.

8th Personal stocks
Of course, you'll need toothpaste, cosmetics, cutlery etc. Many preppers (people who are ready for trouble and disaster) on the Internet have already put together the complete list of personal items.

9. Medicines and medical supplies
If someone in your family suffers from a chronic health condition, it is important to provide medication for at least six months to a year. Also, look for natural alternatives to treat these medical conditions in case you can not deliver prescriptions. You get medication for unforeseen circumstances.
Do not forget to equipment for emergency assistance, as well as the hygienic supplies.
All this acts as a lot of work? It is possible, but it all depends how hard you want to survive.

10th Prepare for survival and a new way of life
It is possible that you will learn to live in harsh conditions without heating and air conditioning. You might not have electricity. Get flashlights, batteries and a lot of hand-held radio.
Make clothes for all possible weather conditions, you never know what time can start crises.
It would be great to make a generator for your house, but if you only at the current, it will quickly attract unwanted visitors.
Get in line. Start walking, exercising or running.
Remember to provide toys for children that do not require electricity and educational materials. Prepare for a new way of life.

11. Do not tell anyone
Do not even tell their neighbors, unless they are prepared for survival. It is important to form alliances. No one else has to know about your plans. Watch to make all transactions in cash. I do not want someone to find out what you're up to.

12th Pray!
Survival is not guaranteed, salvation is!
 
It is a very trick question. What to do? In my case, our case, we just can pay the minimum and we will never be able to pay our debt, here with the Spanish credit cards. For another Canadian Card, my husband made a bankrupt. Our debt was around 16 thousand dollars. It was accepted and we are in the process of it. But for the other credit cards we still pay the minimum, as I say. We can't do more. My idea is to pay the minimum but I talk from me, that I don't have money. But I think the best thing to do is to pay as soon of possible of all the credit debts, to be free of them, the most terrible mafia that exist in this planet.
 
Just my own personal opinion but i would think that debt coulgd be just what they need to detain you and cnfiscate what youw own.
 
No one knows when will be the exact day that the system fails. This is especially true when we have not yet seen the definitive sign, as mentioned in the most recent session.

I think it is wise to take the necessary steps to eliminate your debts, whether through repayment, bankruptcy, settlement, or other methods.
 
Our current financial system (that is about to self-destruct) has always favored the debtor over the saver. Cheap money is now its hallmark - and savers are getting hammered via monetary policy called financial repression. Savings are being attracted to debt service, and in the end, debt/credit will be destroyed along with any savings attached ("invested") to it. The system will attempt to reset in such a way that the result (at least initially) will favor the saver (on the back side of the reset).

The problem is that the debt paper may burn but the debt obligation may not. Its very hard to say exactly what the reset will entail, but I think it is safe to say that it will not go well for the debtor. It will go well for savers that save in real assets.

I know there is a camp out there that recommends to load up on debt thinking that it will be destroyed in the reset - resulting in clear title to the underlying assets. I think this is false and wishful thinking.

My own feeling is to retire all possible debt prior to reset - just as you are doing Woodsman.

My own prediction is (post-reset) savers in real assets will weather the financial storm - debtors will be destroyed. Sounds harsh - but what's coming is going to be very harsh.
 
Woodsman said:
I've been carrying around a pile of debt for some years now, and I've been slowly chipping away at it. In the last year I've picked up several decent bits of work. By scrimping and living cheaply, I've managed to knock my debt down by half. This is good!

I'm working now on another big contract job, and hope to be paid soon. I was planning to throw the proceeds from that into the debt hole, which would cut down my personal debt by more than two-thirds again, bringing me much closer to the finish line. That would be great!

Except...

The question I have is this: If we're seriously looking at an economic collapse in the next few months, and I have this big pile of money coming in just prior... I can't help but wonder if I might be foolish to feed it to the Beast when we have this fairly unique heads-up that things are going to likely fall apart in the next few months.

Is there any value in paying off personal bank debts? Does it make more sense to invest in other things?

What do banks do in times like these with debt holders?

What does hyper-inflation imply for personal debt holders?

I thought I'd put the question out to the SOTT forum. I can't imagine I'm the only one with personal debts these days.

So... What do people think?

I'm kind of in the same situation as you are Woodsman, and I've been giving this a lot of thought in the last couple of weeks. I finished a big job about a month ago and I should be receiving a good sized cheque very soon. I think i'm going to withdraw most of it in cash, leaving just enough to cover any household bills, credit card minimum payment, that sort of thing. Any business accounts that I have, I will postpone paying them, since I know I can leave them for at least 60 days without any repercussions. This way, if nothing happens for a while, I can just deposit whats needed back into the account to cover whatever bills need to be paid. If the economy does crash, then at least I'll have some cash on hand to do what ever I can in that situation.

I know it's always a good thing to pay off debts, but in my situation I would only be able to pay off a very small portion of it, so I wouldn't really be any way further ahead. Besides, I think that if the economy crashed suddenly, there would be so much turmoil that it could take some time before "they" come knocking at my door. I may not be home by then...
 
LQB said:
Our current financial system (that is about to self-destruct)

That sentence alone, says it all. If you mean it literally. I myself am leaning in that direction.

Destruction to me means destroyed infrastructure. That which is critical for survival of the money system. Telecommunications, (SWIFT, fed wire, for instance), account records (including stored away copies), title records, settlement infrastructure, counter-party forward books, etc, etc.

Serious damage to any one of these and it's utter chaos. Credit lines gone, and you have grid lock.
Without liquidity, the system really dies.

It's conceivable that no one would be able to trace who owed what to whom. And barter becomes the sole means of survival. I'm inclined to take the C's comment at its face value. "Money will soon be worthless."

But I could be wrong on this. I've found in my years of experience that money is a very strange and resilient creature.

For the debtor question, Catherine A Fitts has an interesting legal take. If the debt was fraudulently induced, then the borrower is absolved of the legal obligation to repay. She thinks (and I agree) that much of the debt incurred by folks in this country were indeed fraudulently induced.
 
This doesn't answer the question of whether it is better to pay off credit card debt, or to leave it to hopefully "evaporate" in a total collapse of the monetary system. But it is a temporary solution that might help, and take away the pressure of monthly interest payments, if it is available in your area.

Where I am it is quite common to find a bank offering 0% interest on balance transfers for 12 months if you switch to their credit card. So for example if you have $20,000 credit card debt, you open the different credit card and transfer that debt balance to that card. Then you start a savings account where the aim is to save up that $20,000 in 1 year, so that when the 12 month period expires, you can pay the debt off rather than reverting to paying interest on it.

It is important though to keep the original credit card which had its balance transferred for making continuing credit card purchases. This is because on the new card, payments made to it are deducted from the original $20,000 debt before they are deducted from new purchases. So if you were spending $1,000 a month with the new card and also paying $1,000 per month into the account, after 10 months you would still be paying a lot of interest on that account, i.e. the normal credit card rate interest on $10,000 of debt. So ideally you would use the old card for new purchases and pay it off in full each month, while also continuing to save to pay off the other card when the 0% interest rate expires.

(Also on the new card with the $20,000 balance transferred, you do still have to make the minimum monthly payments, which would be about $300 to $400 per month, and bring the balance down to under $17,000 by the end of the 12 months. A particularly draconian bank might even do something like put in the fine print that the 0% interest rate reverts to the normal rate if you miss a monthly payment.)
 
Hey Woodsman, this is just my 2 cents, but what if you did a compromise? Since you've already cut your debt in half, I'm sure you're in your creditors' good graces. What if you set aside enough to say, pay your minimums for 6 months to a year, and then use the excess that you save to buy some preparation materials, supplies, food, etc. (?) That way you're somewhat prepared for either eventuality. (?)
 
Mal7 said:
Where I am it is quite common to find a bank offering 0% interest on balance transfers for 12 months if you switch to their credit card. So for example if you have $20,000 credit card debt, you open the different credit card and transfer that debt balance to that card. Then you start a savings account where the aim is to save up that $20,000 in 1 year, so that when the 12 month period expires, you can pay the debt off rather than reverting to paying interest on it.

It is important though to keep the original credit card which had its balance transferred for making continuing credit card purchases. This is because on the new card, payments made to it are deducted from the original $20,000 debt before they are deducted from new purchases. So if you were spending $1,000 a month with the new card and also paying $1,000 per month into the account, after 10 months you would still be paying a lot of interest on that account, i.e. the normal credit card rate interest on $10,000 of debt. So ideally you would use the old card for new purchases and pay it off in full each month, while also continuing to save to pay off the other card when the 0% interest rate expires.

Excellent approach Mal7 - that's taking advantage of the "easy" money we have now.
 
Mal7 said:
This doesn't answer the question of whether it is better to pay off credit card debt, or to leave it to hopefully "evaporate" in a total collapse of the monetary system. But it is a temporary solution that might help, and take away the pressure of monthly interest payments, if it is available in your area.

Where I am it is quite common to find a bank offering 0% interest on balance transfers for 12 months if you switch to their credit card. So for example if you have $20,000 credit card debt, you open the different credit card and transfer that debt balance to that card. Then you start a savings account where the aim is to save up that $20,000 in 1 year, so that when the 12 month period expires, you can pay the debt off rather than reverting to paying interest on it.

It is important though to keep the original credit card which had its balance transferred for making continuing credit card purchases. This is because on the new card, payments made to it are deducted from the original $20,000 debt before they are deducted from new purchases. So if you were spending $1,000 a month with the new card and also paying $1,000 per month into the account, after 10 months you would still be paying a lot of interest on that account, i.e. the normal credit card rate interest on $10,000 of debt. So ideally you would use the old card for new purchases and pay it off in full each month, while also continuing to save to pay off the other card when the 0% interest rate expires.

Yes, that's a good thought.

It's at least a way to save about $1,500 in interest charges. -I currently owe about $10,000 at an average of 15% interest across a couple of lines of credit. -Cutting that down from $20,000 in a year and a bit took some major sacrifices, (no heat in the Winters being one), work and some lucky breaks. Keto is also, I've found, a surprisingly good way to save money.

Anyway, I currently have relationships with two different banks. -One where all my debt lives, and the other through which I move liquid assets, (pay checks and such). I'll make inquiries at the latter to see if I can wrangle some temporary interest forgiveness.

I'm leaning toward a measured approach; not putting all eggs in one basket. While I'm inclined to give a lot of credence to reading the winds of change we are all aware of here, it's also smart to remember that the future is not easily predictable and time frames are hard to pin down.

Also.., two other thoughts, both concerning investment in precious metals...

1. You can't eat gold. There are periods in other people's testimonies of hard times where nobody wants the stuff because it's immediately useless. Batteries, toilet paper and bread have far more value than shiny metal.

But...

2. I was also reading an account of Nazi Germany during its later death throws, and one Jewish family managed to survive by having a stash of gems and jewelry which the patriarch of the surviving family used in portions to pay off his landlord every month, both in terms of rent and more importantly, to buy silence when the SS came around looking for Jews.
 
davey72 said:
Just my own personal opinion but i would think that debt coulgd be just what they need to detain you and cnfiscate what youw own.

I'm inclined to think the same way. Though I don't know how exactly it will be implemented, but anyway debt's presence make you more vulnerable. It's not for nothing that they forced people to take card debts in order to get things people don't have need. It will be just aftermath of ignorance and consumer's nature of the most( I don't mean people who had forced necessity). It sad to comprehend that folks were trapped, but I suppose at the same time there might be the possibility of chaos and muddle that'll provide any chance to avoid problems.

As for me personally I have a credit card an the debt something about ~85$.
 
It's difficult to know what ideally to do with a mortgage too. The other debt I have is a student loan that I don't pay anything on since our income is low enough for the payments to be deferred. I probably won't do anything with either debt but who knows if that's ideal.
 
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