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Maxed Out: Couple Finances Down Payment With Credit Cards

"I do something I want even if I know I don't have the money. I don't see why I shouldn't buy a sweater or go out with friends." That's 23-year old Crystal talking, and she and her 25-year old husband Jeremy are $25,000 in debt. This episode of Maxed Out is about this young married couple who is living on one income: Jeremy makes about $40,000 a year and Crystal stays at home with their one-year old son. They are carrying way too much debt for how much income is brought in, and their cash flow could never support their future plans for Crystal to continue staying at home. Find out more about their finances when you

.

Besides having a new family, Crystal and Jeremy have a new house with a new mortgage. They financed their $10,000 down payment with credit cards and bought the house because Crystal got pregnant and they figured it would be easier to buy before the baby came into the picture. They have three maxed-out credit cards and are basically paying interest only every month, so their debts just keep rising. Financial guru Allison Griffiths says that if they don't get things under control immediately, they are in danger of defaulting on their credit cards and mortgage.

Even after Allison breaks the news that they are spending a monthly average of $1,140 in department stores, Crystal accuses her of exaggerating their financial situation. They succumb to Allison's advice to cut down spending by at least $400 a month and track every penny. Allison says one of them needs to make more money and bring in an additional $1,500 to $2,000 every month in order for them to get ahead. Crystal doesn't think a 9-5 job would be worth it because of daycare costs and decides to pursue a new career as a personal trainer. At the end of the episode, the couple is spending less than they used to and Crystal is taking classes to hopefully become a personal trainer.

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Smacks83 Smacks83 7 years
I'm going to disagree with the poster who said that the baby needs to be watch my grandma now so the wife can get a job. I HATE when people use their parents as default babysitters (like they couldn't possible have lives of their own or finally be glad that she don't have to take care of screaming babies anymore). I've joked around with my mom about this. I joke that she would be cheaper than going to a daycare and she looks at me and says "Wanna bet?" I know sometimes grandparents don't mind, but you know what, maybe they have their own thing going on and maybe they only want to watch your kid a couple of times (and not from 8am to 6pm five days a week). You made your mess, YOU figure out how to fix it. What's wrong with todays generation that they think they can always depend on mommy and daddy to fix and make better. And yeah, I'm 25 year old female who has a very close knit family.
sundrops sundrops 7 years
Oh my word. I had to talk my husband out of putting $5000 on a credit card for closing costs and a down payment. We're still in an apartment and still have $18k in debt on a $50k income. You should've seen last year's debt at $43k, but we'd still be a good candidate for this show. At least we don't have a house on credit cards.
saramay saramay 7 years
Wow, this is wrong on SOOOO many levels. It should not be legal to put a down-payment on credit cards, that should be the first red flag to a bank!
True-Song True-Song 7 years
$25,000 in debt on a $40,000 income? It makes me uncomfortable just to think about it. I can't even imagine supporting a family of three on that income, much less paying off debt and a mortgage with it.
swp02138 swp02138 7 years
Reading stories like that make it hard not to resent the planned federal bailout of homeowners. This couple may very well end up better off than the responsible couple who saved and put down the full 20% in cash. Yes, the bailout may be necessary and no one wants to see people lose their homes, but it's frustrating!
Spectra Spectra 7 years
Wait a minute, they used their credit card for their down payment?? I didn't know that was actually legal. It shouldn't be legal; it sounds like it would set you up for foreclosure right there. Crystal sounds like an immature, spoiled brat to me too...why the hell does she feel so damn entitled to do whatever she wants to? If I had a kid and didn't work, I'm sure I'd be even MORE frugal than I am now. Sure, everyone has stuff they want, but you can't just buy crap if you can't afford it. Unless you want to end up in debt up to your eyeballs, I suppose.
booglass booglass 7 years
So these are the people I am supposed to worry about losing their house during these tough economic times. People who bought a house they couldn't really afford and continued spend/live on credit. Yes, they are real victims.
runningesq runningesq 7 years
And on Style. (the channel) also! This is ridiculous. THIS is why you don't have children when you are already super in debt and have no idea how to handle money. And living on ONE $40K income?! Good. luck.
refinedharmony refinedharmony 7 years
minkyah: the show is on W Network : http://www.wnetwork.com/tv_shows/shows/maxed_out/
refinedharmony refinedharmony 7 years
$1,140 in department store spending? That's about 2/3 of my entire montly budget! How do you live? Do you really need more clothes??? I was just telling a friend that I maybe go to the mall once every 3 months to buy about $300 in clothes, but it's typically clothes for work. Wear the stuff you already have; and if you don't think you'll wear it more than a few times then don't buy it!!!
GlowingMoon GlowingMoon 7 years
This couple has defective thinking.
teperry3 teperry3 7 years
SOunds like someone needs to be watched by grandma while someone else helps the issue instead of increasing it but being productive (yes being a mother is, but not when a 40,000 income is paying for a family of 3 and paying of 25,000 in debt) and GET A JOB!
bellaressa bellaressa 7 years
ohh wow, thanks carak. I never knew that and I am always surprised and utterly in disbelief what people will do to be a homeowner. Scary. I wonder why they don't think about what will happen if the house is gone and they can't make payments.
amers230 amers230 7 years
wow, the wife sounds really immature. how do you argue with basic math?
carak carak 7 years
bellaressa- i've heard that legally you're not allowed to. but creditors will kinda give the idea to people. like with those checks they send with your statement. some people use them to pay off other credit cards with a higher interest rate, other people deposit them into their bank account and then they can do whatever they want with that money, including writing a check for a house down payment. really a horrible idea unless you get 0% interest for the life of the balance, which is impossible, or even 1.9%, but usually you have to be pretty lucky to get that.
ilanac13 ilanac13 7 years
well there are soo many things that are wrong about this situation. i think that it's lovely that this couple fell in love and got married and have their child, but making just one income and having it as low as it is, well that's got to be a red flag that they shouldn't be spending as much as they do. i hope that they are finally able to listen to the advice that's being given to them and change their ways so that they can hopefully dig themselves out of their financial hole.
bellaressa bellaressa 7 years
Wow, I didn't know you could use credit cards to finance your down payment - the scary thing is that people would do it.
minkyah minkyah 7 years
WHAAATT this is crazy. is this a show? where can i watch it?
laughing808 laughing808 7 years
Unfortunately, the couple need to first realize the amount of debt they are in and how it can be their down fall. Hopefully the personal training will work out for the wife and she can start to earn an income soon, before matters get worse.
Shadowdamage Shadowdamage 7 years
There is so much wrong with their whole financial course of action I don't even know where to begin. You know, I do believe in helping people when things go wrong for them but I also believe people have to assume some personal responsibility for their actions and make good decisions about their finances. As their child grows up and needs more from them, I shudder to think how they will manage then, when they already have a massive debt. I just think they sound extremely immature.
bluebellknoll bluebellknoll 7 years
She sounds like a spoiled brat.
psterling psterling 7 years
Yeah, i don't have much hope for these two.
aprilmayjune4 aprilmayjune4 7 years
I'm almost 24, and I'm ashamed of how other people my age handle money. Sometimes you have to sacrifice to have a decent future. ESPECIALLY if you have kids!
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