Maxed Out: Credit Card Debt In The USA

[r5TPsooner]

Just watched a documentary on Showtime about credit card debt and how politicians have sold American's down the river for a $.

If you have Showtime, give it a looksie. There were some Oklahomans on the show with some extremely tragic stories.

[Jerk]

credit cards are from Satan.

Well, we have one around here, from Hibdon's, in case one of the cars takes a major dump and we don't have the money to fix it.

I knew in the back of my mind when the republican congress passed that bankruptcy reform bill that they had doomed themselves.

[badger]

PBS had a really good show on it a few years back. If you don't feel like watching it, here's the transcript from it:
http://www.pbs.org/wgbh/pages/frontline/shows/credit/etc/script.html

[olevetonahill]

You should use Credit for 2 things
Buyin a Home
Buying a Car
Nuff said

[Chuck Bao]

And, buying medicine, if you are one of the many without health insurance.

[StoopTroup]

I don't have any of them.

PAID IN FULL!

SCREW YOU CHASE, CITIBANK, DISCOVER, AMEX AND ANY OF THE REST OF YOU THAT THINK YOU"LL EVER GET MONEY OUT OF ME AGAIN!

Anytime I hear a story about one of them having trouble or specualting on their future...I start ROTFLMAO!.

[LilSooner]

We have them and pay the off every month. I get a ton of rewards from them because of my job. We have one credit card left that has a 0% interest on it from when we got our windows. I can't wait till it's gone then we are never going to do it again. Cash only beyonces.

[badger]

I don't have any of them.

PAID IN FULL!

SCREW YOU CHASE, CITIBANK, DISCOVER, AMEX AND ANY OF THE REST OF YOU THAT THINK YOU"LL EVER GET MONEY OUT OF ME AGAIN!

Anytime I hear a story about one of them having trouble or specualting on their future...I start ROTFLMAO!.

Imagine that... after years of prospering off all the moneyz off the huge interestz... now, the credit card users are fighting back, by prospering off all the moneyz the credit cards let them spendz... ignore the interestz and default on your credit cards... WHAT ARE THE POOR CARD COMPANIES GONNA DO?! :(

:D

[r5TPsooner]

credit cards are from Satan.

Well, we have one around here, from Hibdon's, in case one of the cars takes a major dump and we don't have the money to fix it.

I knew in the back of my mind when the republican congress passed that bankruptcy reform bill that they had doomed themselves.

MNBA drew up the bill and just happened to be George W.'s biggest contributor in his campaign.

That bill really screwed middle class America.

[SanJoaquinSooner]

Good thing you poor souls with no self-discipline don't use credit cards.

[r5TPsooner]

Good thing you poor souls with no self-discipline don't use credit cards.

I have one and so does my wife but it's OUR card. We put about 2k on it every month and I pay it off every damn month. I like it for booking travel stuff and using it to monitor spending on groceries, gas, pron, etc.

I'm not comfortable with using a check card for all of that yet.

[LilSooner]

I like using them for the rewards every couple of months I get a nice 100 dollar GC to Banana Republic to go shopping.


Love it.

[Rhino]

Great documentary.

[SoonerInKCMO]

At one point a few years ago after building up huge CC debt while in grad school and adding to it with eating out, buying booze, paying strippers' medical bills and so forth, I was about $35k in the hole. Then I got laid off. That sucked monkey balls. Now, I'm CC debt free and will have my car paid off by the end of the year. I'ma be like Bruce then. :texan:

[soonerbrat]

I use my airine mastercard to pay my mortgage and other bills and pay it off every month..i love airline miles

[shaun4411]

most debt for most americans can be solely blamed on their bad decisions; not the banks extending the lines of credit (for cards, or cars etc). the only predatory practices i see are extending loans to people under 20 who have no business having it. (this excludes proven responsible people). sure, gouging on the interest rate seems predatory, but nobody forced you to charge that home theater system "just because"

[SCOUT]

Imagine that... after years of prospering off all the moneyz off the huge interestz... now, the credit card users are fighting back, by prospering off all the moneyz the credit cards let them spendz... ignore the interestz and default on your credit cards... WHAT ARE THE POOR CARD COMPANIES GONNA DO?! :(

:D

Fighting back shouldn't consist of defaulting on a loan where the terms were agreed to by both parties. That isn't getting back, it borders on theft. If you charged up a big debt, you should pay back your debt. Buying the big screen TV isn't the CC companies fault.

Interests rates are high but they are often calculated based on the risk of that person defaulting on their unsecured loan. It can be a chicken and egg thing.

With that said, CC companies aren't doing most Americans any favors by extending credit at high rates knowing that those people most likely won't be able to pay it back.

To answer your actual question. They will lay off tens of thousands of employees, restrict available cash and credit and generally play havoc with the economy.

[jkjsooner]

I haven't seen the show but I do want to share my own opinion of the evils of credit cards. There is the obvious issue of people who really have no financial sense who get themselves so deep in trouble they can't possibly ever recover from it.

It's easy to point the finger at these people for being so ignorant. However, there's another side to this issue. I honestly believe credit card usage has stoked inflation over the last 30 or so years. The net effect of extending credit is an increase in the money supply (temporarily) to people with limited means. When these people go to buy something they are now competing with others who have no problems running up huge debt. For those who are barely making it they all of a sudden may be forced to use credit just to compete for essential goods and services.

Look what happened when we dramatically increased the availability of loans for college education. In the short term it had a great impact but in the long term it caused exponential increases in the cost of education.

I think the same thing has occured everywhere. The majority of us have a choice whether to abuse credit. I'm afraid a few do not and some may have been better without the explosion of credit usage.

One could argue that this improved our economy so that fewer people are in the lower end of our economic spectrum. But now we're simply giving that money to China.

[Vaevictis]

Interests rates are high but they are often calculated based on the risk of that person defaulting on their unsecured loan. It can be a chicken and egg thing.

The problem, IMO, with these rates is that they're so high that they imply equity returns, not debt returns.

IMO, if the risk is high enough that you can justify equity returns, it's because you should be accepting equity risks -- which means you get absolutely no recourse if there's a default.

IMO, you don't deserve a claim in bankruptcy court if you're charging rates that yield equity returns.

[SCOUT]

The problem, IMO, with these rates is that they're so high that they imply equity returns, not debt returns.

IMO, if the risk is high enough that you can justify equity returns, it's because you should be accepting equity risks -- which means you get absolutely no recourse if there's a default.

IMO, you don't deserve a claim in bankruptcy court if you're charging rates that yield equity returns.

I couldn't agree more. Risk based pricing is fully intended to cover the increased risk of charge off.

However, if someone decides to just charge off their debt because they have decided they no longer like CC companies, that is a whole different scenario.

[StoopTroup]

most debt for most americans can be solely blamed on their bad decisions; not the banks extending the lines of credit (for cards, or cars etc). the only predatory practices i see are extending loans to people under 20 who have no business having it. (this excludes proven responsible people). sure, gouging on the interest rate seems predatory, but nobody forced you to charge that home theater system "just because"

OK...

Shawn...

I used to approve and collect credit and I handled many bad Signature on File debits which were created by Travel Agents all over the World.

The Credit Card companies know exactly how many of those transactions were bad and did absolutely nothing to stop it until they racked the debt so high that somebody finally felt it should come to an end.

I know of a guy in Tennessee State Prison (Richard Farris) who had a ring of folks getting him credit card numbers and he would call the airlines and travel agents across America and have Tickets, Ticket Packages as well as goods and other services, Gift Certificates...the list goes on and on. They would deliver via FED-X, DHL whatever to an address where someone would wait until they pulled up to deliver. They would sign for it...the delivery guy got his confirmation it was delivered and the guy on the end who processed the transaction was caught holding the bag. The Credit Card Company simply said "Process your Signature on file" which they couldn't as the guy never came into the office...he was in prison. Signature on File was standard practice in the U.S. and until the Card Companies began to try and help...most of the Travel Agents in the U.S. were either out of business or bought up by the Card Companies.

Just one scenario of the power and brass of these guys.

They at one time knew millions of transactions were bad...they just simply passed this on to the consumer via fees and by increasing your percentage rates and late fees when you got into trouble. In some instances folks have gotten hit so hard they could never pay off the debt unless they could reduce the debt by at least 50% and then throwing every last dollar they got on it every month.

Now these same Companies have the laws passed via GWB and you can go to Credit Counselling and they will reduce your percentage to around 10-21% and you will pay every red cent back. No Deals. Before the law...many of them were happy to knock it down to zero interest and help you get back on your feet and learn to be more responsible your next time out.

Most people really do learn from such a lesson.

They are the most money grubbing bunch of dolts I've witnessed this decade.

Now that folks are strapped into bad loans on their houses and bad credit card debt...the relief of counselling is just not like it was. It will take many folks a very long time to recover. Once they do...

They will never use a credit card again is my guess.

Thus...look at our economy and the mortgage scare.

If you open your eyes and listen with your ears you might just soon realize how naive your statement is.

I'm sure there are many other folks who are Finance and Econs who might find fault in some of what I have stated here...but I for one have lived this and I for one saw some of this Corporately.

Seriously...Our Country is suffering.

The Middle Class has been crushed.

[shaun4411]

OK...

Shawn...

I used to approve and collect credit and I handled many bad Signature on File debits which were created by Travel Agents all over the World.

The Credit Card companies know exactly how many of those transactions were bad and did absolutely nothing to stop it until they racked the debt so high that somebody finally felt it should come to an end.

I know of a guy in Tennessee State Prison (Richard Farris) who had a ring of folks getting him credit card numbers and he would call the airlines and travel agents across America and have Tickets, Ticket Packages as well a good and other services, Gift Certificates...the list goes on and on. They would deliver via FED-X, DHL whatever to an address where someone would wait until they pulled up to deliver. They would sign for it...the delivery guy got his confirmation it was delivered and the guy on the end who processed the transaction was caught holding the bag. The Credit Card Company simply said "Process your Signature on file" which they couldn't as the guy never came into the office...he was in prison. Signature on File was standard practice in the U.S. and until the Card Companies began to try and help...most of the Travel Agents in the U.S. were either out of business or bought up by the Card Companies.

Just one scenario of the power and brass of these guys.

They at one time knew millions of transactions were bad...they just simply passed this on to the consumer via fees and by increasing your percentage rates and late fees when you got into trouble. In some instances folks have gotten hit so hard they could never pay off the debt unless they could reduce the debt by at least 50% and then throwing every last dollar they got on it every month.

Now these same Companies have the laws passed via GWB and you can go to Credit Counselling and they will reduce your percentage to around 10-21% and you will pay every red cent back. No Deals. Before the law...many of them were happy to knock it down to zero interest and help you get back on your feet and learn to be more responsible your next time out.

Most people really do learn from such a lesson.

They are the most money grubbing bunch of dolts I've witnessed this decade.

Now that folks are strapped into bad loans on their houses and bad credit card debt...the relief of counselling is just not like it was. It will take many folks a very long time to recover. Once they do...

They will never use a credit card again is my guess.

Thus...look at our economy and the mortgage scare.

If you open your eyes and listen with your ears you might just soon realize how naive your statement is.

I'm sure there are many other folks who are Finance and Econs who might find fault in some of what I have stated here...but I for one have lived this and I for one saw some of this Corporately.

Seriously...Our Country is suffering.

The Middle Class has been crushed.


i dont disagree with what youre saying. but no cc forced anybody into debt. sure, they didnt help. but it is 100% the choice of the consumer on whether or not he is going to get himself a nice shiny new credit card, and it is also his choice to charge it, and once again it is his choice whether or not he will carry a balance on the card. the problem is people carrying debt they cant handle. its this entitlement mentality that many have that makes people think they deserve the nice things that they see 8th grade educated rappers on mtv have.

i know people in bad financial shape. and all of them know that it is their fault. the industry isnt helping things with their practices. but we all know what happens when you make a deal with the devil. the best way to keep yourself out of that trouble is to avoid going into unnecessary debt in the first place. but if youre willing, there is always someone with a bright white smile willing to 'help you out'. i also know people who are in great financial shape, and its because they made intelligent financial decisions with reference to personal debt. in the end, you have nobody to blame but yourself. yes, if youre late, youll play a late fee. thats your bad. raising the fees is the bank's bad. they arent helping. dont like it? pay your bills on time. cant afford it? stop buying crap you cant afford. if you dont have enough cash in the bank to buy something that isnt absolutely necessary, you'd be better off not charging it. there. safe.

you may view this as me not knowing what im talking about. but i do know economics and finance. i am more an advocate of personal responsibility.

[NYC Poke]

credit cards are from Satan.

Well, we have one around here, from Hibdon's, in case one of the cars takes a major dump and we don't have the money to fix it.

I knew in the back of my mind when the republican congress passed that bankruptcy reform bill that they had doomed themselves.


Republican or Democrat, that was probably the best payoff on lobbying dollars anywhere outside of the Farm Lobby or the military contractors. Pretty shameless, and extraordinarily bad policy. Why should CC companies get a break? They're the ones sending pre-approved cards in the mail to idiots.

[tommieharris91]

Republican or Democrat, that was probably the best payoff on lobbying dollars anywhere outside of the Farm Lobby or the military contractors. Pretty shameless, and extraordinarily bad policy. Why should CC companies get a break? They're the ones sending pre-approved cards in the mail to idiots.

Yea, it's pretty bad when they keep sending my college student, no job havin *** credit cards with like $10K limits on them. Thankfully, my parents taught me the value of fairly thrifty spending, and my edumicatin took care of the rest. Because of this, I'm in very little credit card debt, I can pay off my finance charges and then some with a little part-time job money I make during the year, and I can pay off the rest fairly easily when I find a job after I'm done with college.

[Soonerus]

you should play...j

[tommieharris91]

you should play...j

I got too busy readin this thread and realized I need a line of vCredit to play Let it Ride.

[crawfish]

If you don't have massive credit card debt, then you hate America.

Commies.

[StoopTroup]

If you don't have massive credit card debt, then you hate America.

Commies.

OK...I do have an account at Best Buy I didn't want to talk about....

But everything is at ZERO INTEREST....AND....THEY AREN'T GONNA GET AN EXTRA DIME OUTTA ME....

Whew...I feel better now.

I was hiding that from all of you and darn near turned into a commie over over it. :D

Thanks Craw.

Your service in the Oval has no bOUndries. :D

[StoopTroup]

BTW Mr. Farris was finally confronted by Tennessee State Prison Officials after I believe a Dateline Story on what he was doing appeared.

They finally took away his ability to communicate freely, No Phone, No Internet etc...

I'm sure he wasn't the only guy doing what he did and that there are still many scams running even today.

I'm glad I don't do that stuff anymore.

I remember talking with the Private Owners of some of the Travel Agents back then and how desparate they were when many of them were going to have to pay off 10s of thousands of these transactions out of their own pockets. A small place would simply file for Bankruptcy and give their Credit Card Plates up back then.

Sad.

[OklahomaTuba]

Thus...look at our economy and the mortgage scare.

If you open your eyes and listen with your ears you might just soon realize how naive your statement is.

I'm sure there are many other folks who are Finance and Econs who might find fault in some of what I have stated here...but I for one have lived this and I for one saw some of this Corporately.

Seriously...Our Country is suffering.

The Middle Class has been crushed.

Oklahoma's unemployment rate is under 3%. Nationally its still good as well, except in places where there were "bubbles".

If anyone is going to suffer, its the dumbass creditors who let this happen.

Just say'n.

[Viking Kitten]

I'm not weighing in on credit, I just want to point out that StoopTroup's writing style seems to be channeling Jenni Carlson today.

Jenni.

Carlson.

[Sooner_Havok]

most debt for most americans can be solely blamed on their bad decisions; not the banks extending the lines of credit (for cards, or cars etc). the only predatory practices i see are extending loans to people under 20 who have no business having it. (this excludes proven responsible people). sure, gouging on the interest rate seems predatory, but nobody forced you to charge that home theater system "just because"

Yup, going to college was the worse decision I ever made

[tommieharris91]

Oklahoma's unemployment rate is under 3%. Nationally its still good as well, except in places where there were "bubbles".

If anyone is going to suffer, its the dumbass creditors who let this happen.

Just say'n.

Not really. Nationally, the unemployment rates keep rising while Oklahoma's unemployment rate has fallen. Also, the blame should go to the lenders as much as the borrowers.