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There is no way that a case can be made that credit card companies force people to live beyond their means.Maybe a case with mortgage companies ;maybe but it's stretching it to say credit cards. At soMepoint there has to be resposiblity where it belongs;on the individual.Especailly when you see nothing but warnings for decades now. In the end ;it is the same greed people talk about;wanting more and more without financial responibity. There are tons of people with the same credit card deals that didn't get into trouble.Even suggesting that a person who went to college isn't responsible enough to know basic finance is really stretching it.They raise the interest when people don't act responsibly and are a higher risk;and the terms are right there to read;evrybody knows that or should.The excuses are getting abit much;IMO.But then I also think that the vast per cenatge of mortgage holders knew just what they were signing and want to take the risk because they thought the worse tehy could do was make some money on their hpome after a year or two.Its all greed and risk.
Just like the failed housing loans credit card companies do give out credit to people that do not qualify!
Maybe you should say "people who SHOULD not qualify." They obviously DID qualify if they were offered the line of credit in the first place. It's just semantics though.
From your next paragraph this is the part that really matters:
Quote:
Originally Posted by Jaxson
...many people are gluttons when they have a credit card...
It's this behavior that is the root of the problem. How do we get this to stop?
Quote:
Originally Posted by Jaxson
Then you have elderly that had good credit most of their lives that find retirement hard to live within their means.
This one is truly unfortunate. It's a problem society will have to confront more often going forward. But it still doesn't make credit companies bad or lines of credit inherently bad.
Quote:
Originally Posted by Jaxson
There are the youth that go off to college or their first jobs/apt. that have never experienced budgets or credit. It is like living in a candy factory to them all the things they can now have that their parents said no they couldn't afford maybe.
This comes down to parenting and classes. I'm all for budgeting, finance, credit, etc. classes and skills being taught in high school. Would that solve the problem? Probably not, but it might reduce it for those who have the potential to be responsible but are otherwise simply ignorant about budgeting and how credit really works.
My parents taught me how to use credit from a very young age. I got an allowance, say, $5/week for doing my chores. If I wanted something that was $12 but only had $5 in my pocket, I could borrow the money from my future income, but I had to realize that all of my future income would be going to pay off my debt until it was paid off. So I had to weigh the benefit of what I wanted now against the cost of using all my net worth and also not having any net worth for another couple of weeks. This also taught me in a very basic way the benefit of having money saved up for things. It was much better to go to the store and want something that cost $12 when I had $20 in my pocket saved up from prior weeks than to go there with less money than I needed.
From your final paragraph this is the part that really matters:
Quote:
Originally Posted by Jaxson
...I won't put myself or family into a situation I couldn't repay...
Again, credit is not the problem, credit card companies aren't the problem, neither are incredibly high credit limits (which have never bothered me and which, I'm told, can actually HELP your credit score). It's the behavior. How do we teach or coerce people into understanding what you and I understand about credit?
texdav and Nepenthe good points I agree the individuals are responsible and should be held accountable. I am not putting all class, types or ages in the above categories I did mention I do know there are responsible people in all of them as well.
I do however blame the cc companies when they take it upon themselves to raise credit limits at their discretion.
We all can have different opinions without each of us being totally wrong can't we?
Sorry, I'm not a new ager. Two differing points of view can't be right about factual matters.
Quote:
Originally Posted by Jaxson
Just like the failed housing loans credit card companies do give out credit to people that do not qualify!
Again, this doesn't make any sense. Obviously if they got the loan they qualified under whatever model was being used at the time.
Quote:
Originally Posted by Jaxson
I am not blaming the cc companies and leaving the person off the hook but it seems you are wanting to say the cc company has no fault in why people default on them or why they carry such high interest monthly.
The credit card companies don't want people to default. Sure they like a late payment here and there, but defaulting is bad for the credit card company. The interest rates are related to the risk levels. They charge the rates they do because that is the only way they'll make money. Credit card companies need to make a profit just like any other company.
But yes, I want to say the credit card company has no fault when someone charges up their credit card when they can't afford to pay it back.
"I do however blame the cc companies when they take it upon themselves to raise credit limits at their discretion."
You'd find almost every post of mine strongly advocating personal responsibilty however......when thinking about it, I was raised in a different era.
I wonder how well I would resist the temptation if I was constantly bombarded with commercials that offered me furniture for "no down payment, 2 years no interest"......"Buy nowPay Later". "Call this number !Mortgages with no down payment! No income verification!" ......"Cash the first 3 checks and pay no interest until May of 2010"
How often do you see "Pay cash, get 20% off" ?
Over extending has been heavily promoted as a way of life and I do wonder, had I been born ,say in the 70's, if I would have been totally resistant to it.
I raised my kids, they have great math skills. Neither seem to be able to apply those skills when dollar and cent signs preceed the numbers.
Thank goodness, neither has a credit card.
I have two credit cards and combined have $53,000 in available credit. I have a balance of $38.00 this week. How does raising credit limit create bad behavior?
There is no way that a case can be made that credit card companies force people to live beyond their means.
YES you can make a case for this. Banksters are giving thousands in credit cards to folks who have gone bankrupt 3 times! I have seen this happen.
The issue not being discussed here is securitization. Just as the mortgages were securitized and sold to investors, leaving the banksters with all their original funds PLUS fees to lend out again, the cc companies have done the same.
It is the investor who is being worked over here. Both debtors and cc companies will do fine.
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