40 thoughts on “Open Thread 1-10-2009”

1. Gindy January 10, 2009 at 4:12 pm

   One way to use credit cards effectively is keeping track of the balance daily. We use our credit cards to pay off all our household bills. American Express is great for making sure who we pay only takes what they should. If there are any problems, we call them up and sic them on the offending “vendor”. Problem solved.
   I keep track of our financial health and I check all accounts, from our banking accounts to our utilities on a daily basis. In 24 years of marriage we have never had ONE finance charge and our only debt is our mortgage, which we pay off an extra $1500 per month. While my husband’s 401K and our IRA’s were dented by this latest round of crashes, we didn’t lose even half of what more aggressive investors did and we still have enough pure cash to pay off our mortgage and our taxes and insurance until we die.
   You can use credit wisely, you just can’t let it use YOU.
   1. dafox January 10, 2009 at 7:16 pm

      My wife and I are in the same boat – we use CCs for everything. I think for some people, a casino chip isnt really money. For me, I still see $5 on the table whether its a chip or cash.

      There are many benefits of using a CC instead of a debit card/cash. They are only benefits if you do not feel like its free money. If you’re the type of person that doesnt ‘feel’ the money leaving you, then CCs are not for you.
      1. JoeSez January 10, 2009 at 10:57 pm

         I use a CC like a checking account I track ALL my spending and get a rebate on GM cars. Obviously I pay off every month.

         2003 Vibe was bought with a $3500 CC rebate from GM and $3,000 GM rebate (6,500 total).

         2009 Vibe we used a $2500 CC rebate on top of employee pricing.

         You get detailed tracking of finances AND if you have a dispute, the CC let’s you contest payment.
   2. Chris January 10, 2009 at 11:52 pm

      The best way to use credit cards effectively is to PAY YOUR BALANCE OFF EVERY SINGLE PAY PERIOD! I cannot believe people would have balances on their credit cards at all unless the APR percentage on the credit card is less than the APR that you’re getting on your CD minus the potential tax hit on that CD.
      1. Matt January 11, 2009 at 6:47 am

         I have carried balances before…..as a grad student, that year’s loans wouldn’t usually come in until September. Every year, I wouldn’t be able to pay my August balance on time, but I would pay it all the next month. I considered the $20 in interest for a month a reasonable fee.
         I also carried a bigger balance when I moved down here as a professor. In the CSU system, they don’t pay a new professor until OCTOBER, yet I had to move my stuff down, have a bed to sleep on, have a table to eat on, have a fridge to put food in….that ended up being months of interest. Not because I was spending above my means, just because I was spending AT ALL.

         I, too, used CC points to get $1500 off a new car last summer, and should be able to do the same if we need to become a 2-car family. There are benefits…but you have to be sensible.

         My mom plays the balance transfer game; she’s clearly living above her means.
2. WM Watcher January 10, 2009 at 5:16 pm

   wow, it is 5:00 in the morning….thank you IR
   1. maliburenter January 10, 2009 at 9:12 pm

      IR posted some time ago that he has a program which automatically puts the posts up early in the morning. He could have written it at noon the prior day.
3. granite January 10, 2009 at 7:32 pm

   I don’t know if anyone caught this a few days ago from Mr. Lereah.

   “I never thought the whole national real estate market would burst.”

   http://money.cnn.com/2009/01/05/real_estate/Lereah.moneymag/index.htm?postversion=2009010510

   Sure David, sure.
   1. maliburenter January 10, 2009 at 9:13 pm

      And he had a ton of people telling him it would burst, both because of his stupid books on housing and his role as alleged economist at the National Association of Realtors.
4. maureen January 10, 2009 at 8:44 pm

   I think on some level, we all have to fight the impulse to overspend. Personally I love credit cards because of the conveinience, but I keep a stack of all my receipts from both my visa and mastercard. Everytime I make a purchase, I add it to my pile and add the balance to remind myself what I have spent. I also pay my monthly bills with traditional checks, to force myself to look at how much everything costs each month. I have never had credit card debt. Works for me!
5. Perspective January 10, 2009 at 8:51 pm

   This recession and housing bust could very become a transformational event, but I haven’t witnessed any slowdown in the Irvine-area economy. Just last night, the wait at BJ’s in the Marketplace was close to two hours! The wait at Yardhouse in Costa Mesa last Friday was close to one hour.

   I know the macro-economic data continues to prove we’re going deeper into this recession, but I’ll “feel” it when I can get a table on a Friday night with a short wait.
   1. Major Schadenfreude January 10, 2009 at 10:38 pm

      I drive up Newport Blvd. to the 55 every day and it seems I’m seeing more “For Lease” signs on that street (and elsewhere too). Just yesterday I noticed the used gym equipment place is all empty and there is an Italian botique clothing store a couple doors down that is having a going-out-of-business sale.

      This time it really is “different”, I’m afraid.
      1. irvinemommy January 10, 2009 at 11:18 pm

         I just got an email that Pottery Barn is closing its Fashion Island store on Jan. 18th. I can think of other stores that I thought would close at FI before a big chain like that.
         1. irvperson January 11, 2009 at 1:19 am

            I talked to a person selling hotdogs at a stall Fashion Island. He has been there for years and might be the best person to understand the economics of what the recession is doing to that very upscale shopping center.

            He says that outside of the Apple store, all shops, especially the jewlery stores are really hurting.

            There has been very little traffic especially during the holiday according to him.
            1. Major Schadenfreude January 11, 2009 at 4:45 am

               I don’t understand how those high end botiques at the South Coast Plaza can stay in business. When I was shopping this season, I would glance inside and see a well dressed sales clerk or two just standing there with no one in the store. I imagine a lot of those will be going away soon.
            2. TurtleRidgeRenter January 11, 2009 at 11:46 pm

               The hot dog guy is right. Fashion Island is a ghost town. I work at the Apple store, the exciting pace never lets up. When I walk past the other stores and see no customers and the salesgirls leisurely reading magazines, I am so jealous of their cushy jobs!
            3. Forbear January 12, 2009 at 6:18 am

               Are the customers actually buying or just hanging out.
            4. TurtleRidgeRenter January 12, 2009 at 10:56 am

               People are actually BUYING at Apple. And then bringing their friends in to BUY MORE. They’re mainly buying computers, but also the little stuff like iPods, iPhones and accessories. We’ve had an incredible year.
   2. zoiks January 11, 2009 at 1:14 am

      “but I haven’t witnessed any slowdown in the Irvine-area economy.”

      No offense, but as far as Costa Mesa is concerned I think you aren’t paying attention or you are in denial. CM Yardhouse has always been packed. Less than an hour on a Friday night is slow for that place. I would like to offer counter-examples in Costa Mesa:

      1) Curiously, you picked the Yard House as an example, almost the only place left in Triangle Square. Go around the corner: virtually *all* the shops in that mall are closed, even the underground place that was once Ralphs and then Whole Foods. Except for Sutra, which AFAIK could be a money laundering operation. The Edwards there is practically empty.

      2) Next door, Pasta Connection traffic is quite slow (oh, that’s right they actually closed it down now; it’s now replaced by an empty retail building). The paint store on that corner is shut down too, with no new tenant.

      3) Two or three auto dealerships on Harbor are shut down, as are numerous other retail places along Harbor.

      4) Virtually all the boutique mortgage shops in Costa Mesa have closed. Most of those places have not found new tenants.

      5) A bunch of furniture joints have closed up. Some moved to the South Coast Furnishings outlet mall in north Costa Mesa. You want to see a ghost town? Go to that place at peak hours (e.g. Saturday afternoon). Half their stores never found a tenant. Some of the other half have closed since opening the place (Wickes, Banner Mattress).

      6) Check out the old Mobil gas + shop + car wash place on Baker and Fairview. Used to be a busy place, washing cars, filling the tank, etc. Now it’s completely closed, as is the Mobil + garage that was on Harber + Gisler. The big car wash joint on Harbor is still open AFAIK, but there are almost no cars there anymore.

      7) My own job in CM has witnessed a large drop in business, followed by layoffs, furloughs, and pay cuts.

      8) I have spoken to CM police – they tell me car repossessions in the city are way up. I also know people who’ve recently been burglarized for the first time.

      9) In the last 6 months, I have seen three families (two of them in the Wilson & Harbor shopping center) dumpster-diving at night for recyclables. I had not seen that for many years prior to last year.

      I won’t speak to Irvine, but if you spend much time in CM (as I do), you will quickly recognize that business is very slow all over the city. All the lunch shops where I used to have to stand in line have no line now, a few are just closed. I know some business owners in CM and they all say the same thing.

      I have my doubts that Irvine businesses haven’t seen a dramatic slowdown, too.
      1. Perspective January 11, 2009 at 3:48 am

         Helpful info about Costa Mesa. I don’t spend much time there other than visiting Yardhouse. Maybe shorter waits are coming?
      2. CougBear January 11, 2009 at 4:21 am

         I agree, there are a lot of places in Newport, CM and Irvine that are going out of business.

         I work in the entertainment (not adult) industry and it’s actually quite level right now. Some of the theories that I’ve heard are:
         1. Instead of going to Las Vegas for a weekend, people are sticking around. Based on the rates in Vegas, this seems to be pretty true.
         2. Options like dinner and a movie are still cheaper than going on a weekend trip to Napa or even attending a Ducks or Angels game.

         As in every market, there is usually a movement towards lower price options. I think golf is a great example of this. Anyone seen how dead it is at Monarch Beach Golf Links lately? Wow…
      3. Major Schadenfreude January 11, 2009 at 4:39 am

         “Except for Sutra, which AFAIK could be a money laundering operation.”

         I overhead a nightclub-knowledgeable guy say that that place would do 100 grand a week. This was a couple of years ago when I heard that remark.

         I’ve never been in the place, but can tell it is quite ritzy.

         Interesting.
6. tonyE January 10, 2009 at 11:21 pm

   (1) You need to get a different bank for your accounts. We use a Credit Union… low fees and no charges for “overuse”.

   (2) Credit cards are convenient and impossible to ignore in many circumstances: hotels, rental cars, online shopping, etc…. the trick is to keep track of them and not go nuts.

   (3) Currently we use an Amex we got from Costco. Great thing. Pay it off monthly.

   (4) Credit cards also protect you from vendors. If they hose you then you can call the CC company and put a hold on the payment until they make good on it.

   (5) Lastly, credit cards do give you cashback and stuff… Again, good to have and use under certain circumstances.
   1. mav January 12, 2009 at 6:16 am

      Credit card companies charge retailers a fee on all transactions…around 2%.

      Guess who really ends up paying this 2% on all transactions?……

      … the reality is you the consumer pay the 2% fee, because part of the price of all consumer goods includes this fee…. it’s all a big scam.

      Without credit cards you spend less, and things cost less….
      1. djd January 12, 2009 at 4:25 pm

         “Without credit cards you spend less, and things cost less….”

         Why would things cost less? Few businesses give discounts on non-CC transactions and I can’t immediately recall any I’ve seen that aren’t gas stations. And debit card processors charge fees too, right? So unless we get rid of the card systems entirely the situation will probably continue.
         1. mav January 12, 2009 at 7:05 pm

            the situation will continue until it can’t any longer

            i agree, my point that things cost less without credit cards is more hypothetical, but the fees do get passed down to the consumer.

            credit in general inflates purchase price of everything, be it a TV, an education, or a home.
7. irvinemommy January 10, 2009 at 11:32 pm

   I find it funny that some people are feeling like they need to give IR advice on how to handle his credit cards. IR is giving us daily nuggets of info on how to make wise financial transactions in real estate, and reinforcing the necessity to live within our means and stay out of debt. He just shared that he was a little lax around the holidays to say that he ‘falls victim to the siren’ sometimes too. He isn’t infallible, but he doesn’t need a remedial course in credit card use.
   1. tonyE January 11, 2009 at 10:17 am

      Hmmmm.. wait just a minute…

      IR just made a point, and I made a counterpoint… with others.

      No pontification, no remedial course, just some notes.
   2. Gindy January 11, 2009 at 5:18 pm

      No remedial course offered, irvinemommy. IR told us how he uses his cards and we’ve told him how we used ours.
      I will admit I am a child of poverty so free money was never, ever available in our house. Now that I am very secure monetarily, I still make Mr. Lincoln squeal when it comes time to pay bills and budget. It’s just in my monetary genetic makeup, debt is BAD, savings are GOOD. I don’t confuse the word credit with goodness, ever. Credit cards = debt and like the old saw about crime… if you can’t pay the bill, don’t charge the item.
      1. irvinemommy January 11, 2009 at 7:43 pm

         My bad. I should stick to my usual routine of just reading this blog between changing dirty diapers and not posting comments. 🙂
         1. Forbear January 12, 2009 at 6:37 am

            Please spank yourself and post the video. 😉
      2. CA January 11, 2009 at 9:00 pm

         “It’s just in my monetary genetic makeup, debt is BAD, savings are GOOD. I don’t confuse the word credit with goodness, ever. Credit cards = debt and like the old saw about crime… if you can’t pay the bill, don’t charge the item.”

         This is the best description of how I feel about myself. Totally exemplifies my adult life. And it works.
8. newbie2008 January 10, 2009 at 11:44 pm

   I use credit cards extensively and am called a deadbeat by the credit card companies. I don’t pay a service charge, yearly fee, interest or any other fee. I pay off the full amount on time and use the free interest, rebate and their spending tracking system. The main draw back is big brother is watching.
   I live within my means as the Good Book instructs. Too bad I have to pay for those that didn’t.
   1. HydroCabron January 11, 2009 at 10:38 pm

      > I live within my means as the Good Book instructs. Too bad I have to pay for those that didn’t.

      I assume you mean you’re paying as a taxpayer who funds the bailouts through taxation and inflation. Because if you pay no service charge, annual fee, or interest rate, you are enjoying free money thanks to those who run balances, pay extreme late fees, and pay annual fees. Credit-card float is a form of indebtedness; if you’re enjoying it interest-free, then good for you, but it’s the mass of the utterly indebted who purchase that pleasure for you.
      1. zoiks January 12, 2009 at 12:23 am

         Ah, yes, those who live within their means are abusing the charity of those who, in your words, “run balances, pay extreme late fees, and pay annual fees.”

         I got news for you pal, the over-consumers are the greediest people on the planet, and over-consume for the sake of their own vanity and egos. They are *not* charitable, and never were. Those who save actually help to promote a productive economy through investment, wise decision-making, charity, responsibility, and low waste.

         Save your crocodile tears for those who truly suffer in this world, like the villagers in the Darfur region.
         1. HydroCabron January 13, 2009 at 11:05 pm

            I don’t have a problem with anyone using credit-card float, which is roughly equivalent to enjoying free food and cheap room rates at a casino without gambling. It’s a smart move. Nowhere did I indicate that I disapprove of playing the float. You may not find it politically correct to mention it, but the big casino of debt creates opportunities for the responsible as well as the irresponsible. Too bad we all get the hangover after the party breaks up.
9. Dave in YL January 11, 2009 at 6:52 am

   I work at Kaiser and haven’t seen any slowdown at all. Kaiser just keeps building new hospitals and clinics everywhere. Everyone else is closing down hospitals while Kaiser is the only one building brand new ones.
   1. HydroCabron January 11, 2009 at 10:43 pm

      I’m amazed to hear that any health care institution is scaling back construction. It seems that every hospital I visit is a construction zone, from my earliest memories of visiting an ill relative in 1970 to my last trip for a drug test. Hospitals are worse than colleges and universities for the noise, dust, back-up truck beeping, and girders of fresh construction.

      Hospital is to construction site as SUV is to cell phone.
      1. alan January 12, 2009 at 1:18 am

         Much of this new construction has more to do with CA earthquake codes. Hospitals must upgrade or close down, that’s why USC, UCLA rebuilt. Kaiser is growing because it’s the lowest cost provider, like Walmart so it’s different.
         1. Forbear January 12, 2009 at 6:30 am

            “Kaiser is growing because it’s the lowest cost provider, like Walmart so it’s different.”

            Please enlighten me on where you got this information from.

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