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Trevor Lord
07-13-2013, 00:29
Ok, so I know people say to have around 5k on hand to through hike. My question is how much of this sum can be credit? I can't save enough cash to bring with after all my expenses but would have no problem paying off a credit card when I get back as I will be coming back to a job

bear bag hanger
07-13-2013, 06:43
You need to look at the interest rate on your credit card. I've seen rates as high as 30% (OK, it's only 29.9%), which makes paying off $5,000 kind of difficult, even if you have a job. Most banks will tell you that's only the "penalty" rate, but you wind up paying the penalty rate forever if you miss one single payment or something else (for example, when they don't make their quarterly income projections). The main problem with credit cards for slightly longer than a short term loan (by short term I mean one or two months) is they can pretty much jack up the rate to anything they want, anytime they want and they usually wait until you have a large balance before jacking up your rate. Remember, banks aren't there for you, they are there to make money from you and will do whatever they can get away with to do so.

Cherokee Bill
07-13-2013, 07:09
You need to look at the interest rate on your credit card. I've seen rates as high as 30% (OK, it's only 29.9%), which makes paying off $5,000 kind of difficult, even if you have a job. Most banks will tell you that's only the "penalty" rate, but you wind up paying the penalty rate forever if you miss one single payment or something else (for example, when they don't make their quarterly income projections). The main problem with credit cards for slightly longer than a short term loan (by short term I mean one or two months) is they can pretty much jack up the rate to anything they want, anytime they want and they usually wait until you have a large balance before jacking up your rate. Remember, banks aren't there for you, they are there to make money from you and will do whatever they can get away with to do so.

GREAT response!!!!!!

Trevor Lord
07-13-2013, 09:35
My plan was to have my wife make the minimum payments while I'm gone so that way I never miss a payment. Also because I never use my cards I get a lot of 0% interest for a year offers. I could maybe look into a personal loan then if credit card is a bad idea? My original plan was to sell my car but I looked at its value and realized I owe more than it is worth so that's a no go.

Drybones
07-13-2013, 09:43
My advise is to never put anything on a credit card you can't pay in full when the bill comes each month. The only reason I use a credit card is to make money for myself. The card I use gives me 1% back on all purchases and more on some. Using my card earned me $368 last year, which with interest rates where they are is probably more than my savings account earned...never live on borrowed money!

Trevor Lord
07-13-2013, 09:51
My advise is to never put anything on a credit card you can't pay in full when the bill comes each month. The only reason I use a credit card is to make money for myself. The card I use gives me 1% back on all purchases and more on some. Using my card earned me $368 last year, which with interest rates where they are is probably more than my savings account earned...never live on borrowed money!

Being honest with you this is how I live now, I have never carried any debt from month to month and only use my card so I don't have to carry cash. I love getting my 100 dollar check from my cash back. The only reason I am considering this is lack of better options and the thought that this is my only time I will be able to do this hike before I get a job that I don't want to just quit.

MuddyWaters
07-13-2013, 10:03
Not smart, but you wouldnt be the first to do it.

There is a reason the average person is saddled down with credit card debt they cant pay back.

People want what they cannot afford.

flemdawg1
07-13-2013, 10:04
"If you play with snakes, you're going to get bit." Dave Ramsey

Biggie Master
07-13-2013, 10:12
Consider selling the car that you are already upside down on - and pay off the remaining debt ASAP. Then save the monthly payment for the hiking account. You can buy a reasonable used car when you return to work after your hike. Doesn't make sense to pay on a vehicle to sit in your garage for 6 months... Payment, tax, insurance, maintenance...

Biggie Master
07-13-2013, 10:16
Should have also added that everything is more enjoyable when it's paid for and not financed. You don't want the debt of a hike to be in your mind as you are enjoying the freedom of nature.

elmotoots
07-13-2013, 10:30
If I was in your shoes, being 29 and having the blessings of the wife, I WOULD do it. You have the rest of your life to get debt free. I was in debt the whole time I was raising my family. I am now debt free, but low on energy. Do it while you can. My only other advice is to never have more than one credit card. That's the way I carried unplanned debt and it was easy to pay off just one card.

Just Bill
07-13-2013, 10:33
I've been in the same boat, on trail and off- Here's my rule- my limit is based upon a six month payback. Sometimes I do big side jobs and have to front money for material, but I know I have a check coming- no biggie. Hiking though- do you feel confident that you can earn enough income when you return to pay it off in a timeframe you are comfy with? That's the big question. If you work lower paying jobs, you don't want financial worries hanging over your head ruining your hike- money problems are a big reason folks quit. Consider a second job if that's the case so you can go on trail worry free. That said- whenever I have time, I have no money; whenever I have money, I have no time. If you are only a grand or two off, and that's all that's stopping you- go for it!

yellowsirocco
07-13-2013, 10:59
If I was in your shoes, being 29 and having the blessings of the wife, I WOULD do it. You have the rest of your life to get debt free. I was in debt the whole time I was raising my family. I am now debt free, but low on energy. Do it while you can. My only other advice is to never have more than one credit card. That's the way I carried unplanned debt and it was easy to pay off just one card.

This is good advice. Credit card debt sucks, but if the only way you can try a thru hike is now or when you retire then go for it.

SonrisaJo
07-13-2013, 11:29
Life is short, and given your situation, I would do it. You might end up spending a lot less overall, knowing that you'll have to pay it off afterwards. Sounds like you've thought it through and know what you're getting into. A lot of people are stuck with credit card debt from dumb purchases of things they never needed. This may be the best "thing" money can buy. Hike frugally and breathe deeply.

Just Bill
07-13-2013, 11:43
excellent points all- one further idea- wait until the very end of your trip to tap the credit cards- that way you'll only carry debt for the shortest period as well. As others mentioned- maybe you won't even need it.

Jeff
07-13-2013, 12:18
"If you play with snakes, you're going to get bit." Dave Ramsey

Dave Ramsey is one smart guy. He would advise you to get a second job delivering pizzas and save up enough money to finance the trip without the need for credit cards.

daddytwosticks
07-13-2013, 13:11
Credit cards suck. The wife and I have one from the credit union and use it on occasion. Hard to live now-a-days w/o one. Best to pay off completely each month. Stay out of debt and live below your means for a happy life. :)

Old Hiker
07-13-2013, 13:42
As my first 1st Sergeant from Basic Training told us in our first of many financial briefings, "You RUN into debt and CRAWL out." There are certain things you need (usually) a long-term loan for: house, car, large purchases of some sort. I paid off one Visa card before my last thru-hike, just to get the payment off my wife and I'm trying to pay off the last one.

It's hard to pay off a card when you have legal bills that keep adding up. It'll be close, but doable. I use that card for Amazon, REI, etc for online purchases, but I transfer the money out of savings directly to the card to pay the purchase off immediately.

Use the card towards the end, like what was said before. Don't blow your cash, thinking it'll be OK, I have a card to use. Stretch it out as much as possible.

You may want to put it off another year to make sure.

Good luck - safe hiking.

jesse
07-13-2013, 16:39
I wouldn't go into debt to pay for a vacation.

DavidNH
07-13-2013, 17:26
Credit cards will work for most of the trip. Pay off the balance each month and you avoid interest charges. Of course that would mean having someone at home pay the bills for you. I will second Jesse's comment.. don't go into debt to pay for a vacation. Have the money in bank FIRST, THEN do the vacation! There are some places that just plain won't take credit cards. here you use cash or better yet an atm card to get cash. You could also carry travelers cheques because they are accepted everywhere far as I know.

Venchka
07-13-2013, 18:03
Be advised: A casual glance at a few web sites for small Mom & Pop businesses along the AT will reveal a cash, travelers checks or MAYBE debit cards only policy. Easy to see why. Have enough ready cash and/or travelers checks handy for these occasions.
If the Spouse Unit is on board, "Just Do It!"
Have fun!

Wayne

Dogwood
07-13-2013, 18:38
Ok, so I know people say to have around 5k on hand to through hike. My question is how much of this sum can be credit? I can't save enough cash to bring with after all my expenses but

With due respect this, "My question is how much of this sum can be credit?" is your personal finance decision. You're going to get all sorts of opinions that range far and wide. These opinions are going to largely be based on what others would do themselves. I doubt anyone here is your personal financial advisor and is familiar with all the details of your finances or what you feel comfortable with financially. Coming to a decision should be based on what you feel comfortable with and are financially prepared to address. You said you would have no problem paying off a credit card when you get back as you will be coming back to a job. Here's the decision you need to make for yourself. Do you feel comfortable with tapping into a line of credit to do a thru-hike? Is doing a thru-hike worth doing that?

Think about this too. Since about 8-9 out of 10 wanna do a AT thru-hikers don't complete their intended thru-hikes, and most drop out early on their intended AT thru-hikes, you may not wind up using as much credit as you think. Also, there is no hard and fast rule or law that says YOU MUST have 5K to do a AT thru-hike. That figure is only a recommendation that SOME people have. Here's a simple option you may be overlooking. Don't do a $5000 AT thru-hike! Less money spent overall on completing a AT thru-hike the less you'll have to pay back when you get back to work. Find what works for you!

gpburdelljr
07-13-2013, 19:54
While growing up my mother always told me "pay as you go, if you can't pay don't go". That advice has served me well. I now have a comfortable retirement and 0 debt.

Trevor Lord
07-14-2013, 00:20
I actually never have had debt, I worked my way through college. The car loan I took last year is the first time I ever went into debt. I think what I am trying to get at here is that I can't save all the money up front but I know I can pay it off within about 8-9 months assuming I spend 5000 while on trail. That being said because I never use credit cards I know very little about how they work as far as Interest. My car loan is a fixed interest rate so I know that the 24000 I spent on it will really be closer to 28000 over the duration. It was an expense I was willing to take to get a reliable car. I have decided the trail now is something I am willing to go into a small amount of debt for.

i hadn't really thought about the whole interest factor and I can see it becoming a problem though. The question I was really looking for is really, how usable are cards along the trail vs how much cash should I keep on hand. I'm guessing I will need cash for laundry and maybe deli style places, but hotels and groceries can go on a card.

Anyway, thank you all for the input and insights, the community on this site really seems to be great. I appreciate all your time and thoughts

Dogwood
07-14-2013, 01:00
When I first saw your thread title this is what I first thought you were asking, "The question I was really looking for is really, how usable are cards along the trail vs how much cash should I keep on hand. I'm guessing I will need cash for laundry and maybe deli style places, but hotels and groceries can go on a card."

That's going to vary from hiker to hiker but IMHO if you aren't wasteful with your dead presidents I would guesstimate $500-1000 cash should do it and the rest on a credit card not that I'm saying everyone should necessarily break their spending down that way! Since you just added this, "I never use credit cards I know very little about how they work as far as Interest" ABSOLUTELY DO UNDERSTAND the financial responsibility, your credit card agreements you made, and sometimes constraint needed when using credit cards. You have been given some very good advice about that already beginning with the first poster. It can be quite easy to spend by borrowing(LOL) when it can be much harder to pay it back especially with a big APR. If don't know what that means you need to slow things down and get informed knowing the hand you've been dealt BEFORE going all in!

Drybones
07-14-2013, 09:19
I thought it was interesting to go back through the posts and look at what advice was given by age grouping. "Wisdom"...the amount of mistakes one has made and learned from them.

Dogwood
07-14-2013, 15:20
You can find info on line and get plenty of solid advice from a financial counselor but one thing I NEVER do consistently is pay the minimum monthly payment on a credit card. I aim to pay more than the min payment and aim to pay the card off quickly in a few bigger payments that far exceed the min monthly payment. Why? Credit cards are set up to make even money from you by keeping you in debt for the longest duration possible by tacking on interest that accrues on interest that accrues on interests....You don't want compound interest working against you!!! I built up my personal and biz credit that way. Your credit card payment history is reported to credit reporting agencies like(EquiFax, TransUnion, Experian, etc) and are used to determine your credit worthiness. If you do tap into a line of credit to do a thru-hike UNDERSTAND THESE THINGS. Credit is a good thing to have. Don't screw yours up. And, if you asked Suzie Orman about what to do in your situation and if she would allow you to do what your considering, based on what you've told us so far, she would prolly say, DENIED! But, then again Suzie has no idea of the potential life altering benefits of completing a thru-hike might mean to you!