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  #1 (permalink)  
Old July 13th, 2003, 08:51 PM
Mikey Sr.
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Default Cruise Credit Trap

I see all the cruiselines now offer cruise credit. Another way to obtain high levels of debt. Any where from 20 to 25 percent credit . I must say that credit has gotten way out of hand. The cruise lines say cruise now and pay later. My wife's friends cruised three years ago and are still paying it off. I did forget to mention they are both professionals. He's an architect and she a school councelor. They make a great living but they are deep in the credit trap. How can this happen? I have worked in banking for five years and must say it is our job to force credit debt down your throat. We will not take no for an answer. When you walk into your bank, you will be attacked by us. If we want to keep our jobs we will not take no for an answer. The banks have adopted the policy "Don't take no for an answer. I have paid for my last five cruises in CASH. Yes it's true. You can save money in a Holiday club for your next cruise. You will only be receiving .65 % but think of having to pay 25% to the banks. And for those who say I pay the balance and the end of the month, get real. Most people don't. The banks would not be making a KILLING if that were true.
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Old July 14th, 2003, 09:42 AM
nita
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Default Re: Cruise Credit Trap

Mikey.....I believe that the idea of having cruise credit is absolutely ridiculous! Americans already have car/truck notes, mortgages, utility bills, department store bills, consolidation loans, student loans, etc., and the cruise industry have the nerve to come up with another credit trap? I am a little confused....is it the cruise industry or the bank that is offering the cruise now, pay later concept? Either way, it is just another trap for people to fall inot. I am sailing the Majesty of the seas in August 3rd, and my trip was alos paid for IN CASH. I refuse to fall into the debt hole any further then what we are in. I have to admit that we are not very deep into it, besides my student loans form college, but we don't plan on adding to them with an outrageous and unnecessary bill like a cruise. Hopefully people won't fall for this one.

Nita
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Old July 14th, 2003, 11:00 AM
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Default Re: Cruise Credit Trap

we use a major credit card to pay for our cruise, and have the money in the bank to pay the balance when the credit bill arrives. Its a good idea to use a "major" credit card to book your cruise, it leaves a paper or electronic "trail" if something goes wrong, whereas if you pay cash, there is not way to trace or "trail" cash.
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Old July 14th, 2003, 11:34 AM
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Default Re: Cruise Credit Trap

My parents ALWAYS pay off the balance @ the end of the month. Maybe we aren't everyone but there are peole out there who do. I know that if I had a credit card I would also pay it off every month. You are stupid not to. Who wants to pay those high interest rates.

People need to learn not to buy what they can't afford. I know that I am not ready for a credit card yet, so I dn't have one. I use my debit card for everything. That way I can't buy things I can't pay for!
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Old July 14th, 2003, 11:50 AM
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Default Re: Cruise Credit Trap

What tha heck! Just don't pay your credit card bill. What are they gonna do to you? Seem to remember a few years ago that a senate panel was investigating to find out why Credit Companies charge high interest...I seem to remember they stated reason was to make up for people who don't pay back. Just throw away the collection notices and book another cruise.

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Old July 14th, 2003, 11:57 AM
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Default Re: Re: Cruise Credit Trap

We had totally stopped using credit cards until I "discovered" the one we currently use.....this credit card reimburses us anywhere from 1% to 3% of our purchases in gasoline credits.....I use this card exclusively for anything to do with cruises (deposits, final payment, gifts, pre-cruise air and hotel and on-board purchases) - and, fortunately, we are able to pay the balance each month (believe me, there was a time when we were raising a family that we were unable to do that - but we survived).

This year alone we've received over $100 in gasoline credits. Sure wish I had known about this card sooner......

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Old July 14th, 2003, 02:10 PM
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Default Re: Cruise Credit Trap

The CC we use accumulates points for each dollar we spend. Those points can then be used for discounts on cruises. Naturally, we always pay the entire balance off each month. No interest. Discounts on cruises. Our last cruise was half price.

Glenn
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Old July 14th, 2003, 05:33 PM
Mikey Sr.
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Default Re: Cruise Credit Trap

Most of your large banks like MBNA finance the cruiseline's visa and mastercard cards. One must remember these banks are not giving you anything. You still must pay them back. You'll get to the same place if you just save it away. Hey Rick how have you been buddy?
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Old July 15th, 2003, 02:30 PM
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Default Re: Cruise Credit Trap

Easier to charge on your card, pay it off every month and let them do the "saving" for you. If I were to put the money in a savings account I'd only get 1-2% and that's not enough to make any difference. You just have to be smart about using the credit card. You must be sure to pay off your balance each month so there are no additional charges (service charges). A lot of people don't pay off their balance every month and they get themselves into trouble. (I know, I'm a credit & collections manager) We like it because not only are we getting 1/2 off our cabin, we only write one check per month, instead of 5 or 6 to the grocery store, a few more at the mall ect....

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Old July 15th, 2003, 04:06 PM
Mikey Sr.
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Default Re: Cruise Credit Trap

I have never been able to see how putting a cruise on a credit card is easy. It's only easy for the banks because they have a source of income. Where does it say that one will continue to earn the same income over time inorder to pay for such a charge. You lose your source of income and you are stuck with lots of late fees and collection calls. Play it safe and SAVE money in a holiday club. Being smart with credit means never using it for silly things such as lavish vacation. Remember the banks are not giving you anything. Just a bill with intrest. You still have to pay it off.
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Old July 15th, 2003, 05:00 PM
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Default Re: Cruise Credit Trap

Doing good Mike. Thanks my friend

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Old July 16th, 2003, 11:59 AM
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Default Re: Cruise Credit Trap

Mikey,

This is how we do it. We save up the money to pay for the cruise. When we are ready to book, we pay for the cruise on our credit card. Then we take the cash we saved up and immediately send a payment to the card to offset the charge.

That way, we have no interest charges but we get the points. No balance on the card means no credit problems.

The problem with credit cards, is not with their existence, nor with the interest charges. The problem stems from the people who use them irresponsibly. Wise use of credit in any form can enhance one's lifestyle, not diminish it.

Glenn
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Old July 17th, 2003, 11:48 AM
MichelleM
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Default Re: Cruise Credit Trap

We have a frequent flyer credit card. There is no annual fee with the card and it is good for the majority of big airlines out there. So for doing nothing more then we would of done we have free airline tickets for our next cruise. We do pay our bills at the end of the month, so the interest rates are not a problem for us. Before we book a cruise, or make any major purchase on the credit card, we have saved enough to pay the bill in full when the CC bill comes. Then we earn the minimal interest from our money in the bank for another month too.

I do have several friends who have a real problem understanding that charging is the same as writing a check (money wise).

Credit cards are not all evil, it is people not understanding their usage has responsiblities that come with them.

Financing a cruise on a credit card is not the best use of resources, but as long as there are people who are willing to pay the minimum balance each month the cruises and everything else will keep doing it.
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Old July 17th, 2003, 01:32 PM
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Default Re: Cruise Credit Trap

This is a new one on me! Of course, I know that someone might pay for a cruise on a regular credit card of some kind, and then have trouble paying it off in a lump sum and thus get into the "credit card trap". But I have not heard of A CRUISE LINE ITSELF offering cruises on a "buy now, pay later" basis. Which lines do this?

What I have heard of is the opposite, to some extent. Some lines offer a discount on a cruise when you put down a depsit on it when you are on one of their cruises. But cruise lines themselves offering cruises on credit. Haven't heard of it.

Thanks,
Richard
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Old July 17th, 2003, 05:47 PM
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Default Re: Re: Cruise Credit Trap

I think what the original poster was talking about was the card that Carnival puts out which I have. It's called the Carnival Mastercard and it's thru Capital One Bank. I use it to book my cruises and pay it off. The interest rate I have is only 9% but I pay it off in full each month so who cares what the interest rate is. I like to book my cruises using a credit card for personal and financial reasons. It gives me a paper trail and I can always dispute if there is a problem.

As for individual cruiselines doing a type of "credit line" I doubt that is possible.
At least I have never heard of such a thing.

And if you are financially responsible then you will never fall into the "credit trap." It is much easier to say "oh what the heck, let's just charge THAT!" when the responsible thing (and the harder choice) is to make sure you have the money to cover those charges. I doubt the cruiselines are the reason for someone falling into debt bigtime unless they cruise alot!

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Old July 17th, 2003, 06:07 PM
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Default Re: Re: Re: Cruise Credit Trap

The cruise line I like to take (Radisson) does not have a credit card "branded" with their name. However, if you use AMEX platinum to charge a cruise, you get a $300 room credit per couple. Surely, we take advantage of that, but like you, always pay it off when due without interest. Essentially a cash basis. When we can't afford to cruise cash basis, we dont cruise!

Thanks,
Richard
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  #17 (permalink)  
Old July 18th, 2003, 07:05 AM
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Default Re: Re: Re: Cruise Credit Trap

Oh dear Sharon! You think you are getting 1-3% back on your charges but your net is probably zero. Here's why. The credit card company charges the retailer a percentage of 2.97% or thereabouts for their ability to accept the card. In turn, what do you think happens? The retailer increases his prices to cover this cost. I know, I'm a retailer. If I didn't take credit cards and only accepted cash I could lower my prices by 3% or better.

Regards,
Thomas
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Old July 21st, 2003, 01:32 PM
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Default Re: Re: Re: Re: Cruise Credit Trap

You make a good point, Thomas, but no one is going to stop using credit cards; in fact, their use will no doubt only increase in the future. Therefore, why not, as a consumer, take advantage of some of the benefits they offer? I use a cash-back card and a cruise rewards card, and as long as I pay the balance off every month, I am getting something free every time I use them. I'd love to see lower prices, but the minute a merchant stops accepting credit cards, they might as well just close down.

Cheers,
Michelle B.

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Old July 21st, 2003, 10:28 PM
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Default Re: Re: Re: Re: Re: Cruise Credit Trap

That's true Michelle. We must accept credit cards (sort of) but there are different charges for different credit cards. The credit cards which earn you miles, or points, don't cost retailers any more than the standard card. Those that offer you cash back do.

Suppose a business does $100k in credit card charges just to use round numbers. Mastercard and Visa (points or miles earned, doesn't matter) costs the business about $1600 in discount fees with an inexpensive merchant service. There are also processing fees, transaction fees, statement fees, and international fees. But Discover charges the same retailer about $3000 in discount fees. Plus they charge the retailer for depositing the money into your account for Pete's sake. Plus they charge you to issue you a check for the money. American Express is a flat 3%. No options.

Now suppose a business does 5 times that much business in credit cards. You can see how it adds up and forces the retailer to increase his prices to cover that cost. So the bottom line to the consumer is he may THINK he's getting cash back but he paid more for the product to begin with.

Regards,
Thomas
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Old July 22nd, 2003, 02:06 PM
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Default Re: Cruise Credit Trap

If you shop in a store that accepts credit cards, yes they up th price to cover their cc usage cost. But everyone pays this increase not just the person who uses a card. There are very few places out there that do not accept cc's. Mostly mom and pop places and their prices are usualy inflated because they can't get bulk discounts on their inventories.

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Old July 22nd, 2003, 08:19 PM
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Default Re: Re: Cruise Credit Trap

I think Thomas is making the point that credit card rebates are really paid for by the consumer. Maybe so, but what can be done about it? If you pay cash, it costs you more. If you refuse to patronize retailers with this policy, your list of places to shop gets shorter every day.

It's the same way with supermarket 'club discount' cards. Most people don't realize or care that it's simply a marketing tool for merchants to build up a customer shopping profile database so they can target them with customized advertising and sell the information to other retailers. They hook people under the pretense that the club card gets them a discount, when in reality it just avoids a price markup. I refuse to let them mine my data, but privacy has a pretty high pricetag. I either have to buy brands that don't feature the club 'discount' or hunt near and far for stores that are still clubcard-free. I wish people were more savvy when it comes to marketing come-ons.
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Old July 23rd, 2003, 10:03 AM
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Default Re: Cruise Credit Trap

That's true trcruiser.

Getting back to my point. CC charges, insurance, mortgage, electricity, labor, legal, taxes, product, etc. are all costs which figure into the price of the product. Get rid of one or more of these and it stands to reason the price a customer pays for the product will decrease as well.


Regards,
Thomas
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Old July 23rd, 2003, 12:10 PM
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Default Re: Re: Re: Cruise Credit Trap

Straying from Thomas' point again... I absolutely agree about the club cards, tr cruiser. It makes me so angry that supermarkets are offering "discount cards" now. Can't people see they are just a tool to collect marketing information? I get them anyway but give out a fake name and address, ha ha.

Cheers,
Michelle B.

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Old July 23rd, 2003, 12:48 PM
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Default Re: Cruise Credit Trap

I think there are 2 issues here:
1) Many major cruise lines offer to finance the cruise like a loan that you can pay off over a set time.

What is wrong with that? If you cannot afford the cruise and there is a special occasion (ie honeymoon). This will allow a couple who might not otherwise be able to afford it to go.

2) Branded credit cards.
These are visa and master cards that give points towards cruise travel such as upgrades, onboard credits, or even free cruises (over 100,000 points).

Nothing wrong with that either. I have a card that gives me frequent flyer miles that I have gotten many free flight from.

If people are not responsible enough to handle credit or smart enough to understand the terms, the banks only fault is extending credit to people who do not deserve it. Since when did it become the norm for people to not take respsonsibility for their own actions (ie I hear there is a lawsuit now of alcaholics suing liquor companies!)?

There is no evil undertone to these loans or credit cards. They are in no way traps. These are tools made available to the consumer. Nothing more, nothing less.
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Old July 23rd, 2003, 03:07 PM
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Default Re: Re: Cruise Credit Trap

Michelle the cruise reward card what is the name of the card? We are shopping for a credit card <so far never had one> and are looking into the best poss one.Thanks!

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Old July 23rd, 2003, 03:32 PM
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Default Re: Re: Re: Cruise Credit Trap

I have the Carnival Mastercard by Capital One and I get points I accumulate towards free cruises and also can redeem them for like fruit/champagne baskets, etc...on a cruise.

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Old July 24th, 2003, 06:45 PM
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Default Re: Re: Re: Re: Cruise Credit Trap

Thank you Helen!

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Old July 25th, 2003, 08:33 AM
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Default Re: Re: Re: Cruise Credit Trap

Sue, I also have the Carnival Mastercard by Capital One as well. If you have good credit you can get it with no annual fee. But they give you a really low limit, so you have to track your purchases carefully.

http://www.carnival.com/Finance/default.asp

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Old July 25th, 2003, 08:37 AM
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Default Re: Re: Re: Cruise Credit Trap

I use a Marriott Rewards Visa card which gives points for redeeming all kinds of travel rewards, including cruises. I buy everything on this card, including gas and food. A free 7 day cruise on Carnival in an outside room is 140,000 points for instance.

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Old July 25th, 2003, 01:15 PM
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Default Re: Re: Re: Re: Cruise Credit Trap

I have a 5500.00 limit on my Carnival Mastercard and only 500.00 of that is general and 5k is for cruises! I consider that a pretty good credit line. My interest rate is 9% and no annual fees.

I like it alot as I got a free bottle of champagne for using it on my last cruise. I think I'll have enough for next years cruise to get another free bottle in my cabin! WOO HOO

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