Credit card crunch (Full Version)

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Level -> Credit card crunch (12/23/2007 3:38:58 PM)

quote:

Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come.

An Associated Press analysis of financial data from the country's largest card issuers also found that the greatest rise was among accounts more than 90 days in arrears.

Experts say these signs of the deterioration of finances of many households are partly a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy.

"Debt eventually leaks into other areas, whether it starts with the mortgage and goes to the credit card or vice versa," said Cliff Tan, a visiting scholar at Stanford University and an expert on credit risk. "We're starting to see leaks now."


http://news.yahoo.com/s/ap/20071223/ap_on_bi_ge/credit_card_crunch




slaveluci -> RE: Credit card crunch (12/23/2007 3:58:05 PM)

quote:

ORIGINAL: Level
Experts say these signs of the deterioration of finances of many households are partly a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy

Yeah.  Partly that and partly the fact that an alarming number of folks go into debt up to their eyeballs trying to live above their means.  Buying things they have absolutely no way of paying for and that aren't necessities is probably a huge cause of such debt.  I have no statistics but I personally know of many people who just don't make that kind of cash but anytime they want something (not need) they either just put it on an existing credit card or get another (unneeded) one and put it on there.  I think alot of them think, "Oh well.  If we can't pay it off, we'll just file for bankruptcy." 

There's this commercial I hear on TV alot that says "Buy now and pay later?  Why not buy now and pay much, much later?"  I always want to say, "No.  Why not buy now and pay now or not buy at all?[8D]"  I understand the mortgage crisis and my heart goes out to anyone losing their home.  I just don't know what has happened to common sense, though, when it comes to people buying so many things they cannot even afford.  You play with fire, you're gonna get burned.  Unfortunately, so many times they just file for bankruptcy and it's their creditors who probably get burned.  If you can't pay for it (even over the long term), don't freakin' buy it....................luci




Level -> RE: Credit card crunch (12/23/2007 4:15:16 PM)

Good post, luci.
 
Merry Christmas [;)]




ownedgirlie -> RE: Credit card crunch (12/23/2007 4:22:39 PM)

I think it's become a societal norm to spend above one's means.  People have counted on the economy rising (in the past), people count on keeping their jobs and being able to pay their debts.  Some people fall on hard times and going into debt is the only way to stay afloat, so to speak.  And yet others just lack discipline in their spending. 

I don't see a lot of people shrugging about filing for bankruptcy, though.  My brother had to file, years ago, and it was the most humiliating, difficult thing he ever did, and a last resort.  A friend filed after a horrible divorce left her financially devastated.  I haven't seen people talk about bankruptcy casually and actually mean it.  These days, it's become harder to file, since so many people were doing so in recent past.

I guess I'm a little more sensitive to the issue now, due to my circumstances.  I don't think overspending is a good practice, but I'm not apt to say "Too bad for you!" when people are in trouble (not that you are saying that, luci). 

The system also entices spending - like you said, with the buy now, pay later approach, low interest loans (or in some cases, NO interest), cards with rewards programs, etc. 

Now, in my case, with my ex not paying the mortgage so I had to, and then attaching my wages so I had nearly nothing to live on, and then my need to go on disability and subsequently getting laid off, and with my enormous legal bills from this divorce, you can bet I'm in debt!!!  Thank goodness for Visa so I can buy groceries!  But it will all get paid off, and I have no intention of filing for bankruptcy.    Then again, my situation is unique to the problem mentioned in the OP.  I guess I'm just more sympathetic to those in debt, as a result.




MRandme -> RE: Credit card crunch (12/23/2007 6:09:23 PM)

Another issue here is that some are forced to use the cards because their income is not rising with the cost of living. It used to be that one person working a full-time job could make enough to support a family. Now it requires at least two jobs to make it with the bare minimum. When the only way you can fix the car or get your kid shoes is to use the credit cards, it is easy for the debt to stack up.

i have not had a credit card for years, to avoid creating more debt. But i just found out this weekend that even with cash in hand to cover  the deposit that you cannot rent a car without a credit card. So now i find myself contemplating applying for one and wondering if i really should. It certainly would have made my recent spate of car repairs easier to handle.

Heinlein, in one of his books, wrote a scene where a character had to insist that a shop take her cash... they weren't set up for it and why didn't she use a credit card? Seems to me that we are headed in that direction.

g




Arpig -> RE: Credit card crunch (12/23/2007 6:13:44 PM)

I am an oddity...I pay cash up front for everything...if I ain't got the cash,
I don't buy




awmslave -> RE: Credit card crunch (12/23/2007 6:59:02 PM)

quote:

Another issue here is that some are forced to use the cards because their income is not rising with the cost of living. It used to be that one person working a full-time job could make enough to support a family. Now it requires at least two jobs to make it with the bare minimum. When the only way you can fix the car or get your kid shoes is to use the credit cards, it is easy for the debt to stack up.

Above talk may attract sympathy but still we are talking living above their means. The fact is they are not forced to borrow. They need to get a better job, rent instead of buying house, give children for adoption, use public transportation etc..




ownedgirlie -> RE: Credit card crunch (12/23/2007 7:02:40 PM)

quote:

ORIGINAL: MRandme

i have not had a credit card for years, to avoid creating more debt. But i just found out this weekend that even with cash in hand to cover  the deposit that you cannot rent a car without a credit card. So now i find myself contemplating applying for one and wondering if i really should. It certainly would have made my recent spate of car repairs easier to handle.




Yep.  You need a card to rent a car, to guarantee a hotel room, and to buy an airline ticket.




YesMistressIrish -> RE: Credit card crunch (12/23/2007 7:18:33 PM)

quote:

ORIGINAL: awmslave

quote:

Another issue here is that some are forced to use the cards because their income is not rising with the cost of living. It used to be that one person working a full-time job could make enough to support a family. Now it requires at least two jobs to make it with the bare minimum. When the only way you can fix the car or get your kid shoes is to use the credit cards, it is easy for the debt to stack up.

Above talk may attract sympathy but still we are talking living above their means. The fact is they are not forced to borrow. They need to get a better job, rent instead of buying house, give children for adoption, use public transportation etc..


You were joking, right? People are forced, divorce, injury, etc.
And, 'give children for adoption', as you said above?

Right, get rid of the UMs. They're 13, just shove 'em out of the nest. [:'(]
Just like they'd sell their grandmother to avoid credit card debt?
(shakes head)




cyberdude611 -> RE: Credit card crunch (12/23/2007 8:15:24 PM)

The banks have only themselves to blame....

First off, why give people huge credit lines ($20,000+) if they dont have the income to pay it back? Why raise the interest rate at the first oppertunity purposely putting people in further debt? Why tack on more and more fees?

There isn't much difference betweeen these banks and loan sharks in Vegas.




ownedgirlie -> RE: Credit card crunch (12/23/2007 8:26:22 PM)

quote:

ORIGINAL: YesMistressIrish
You were joking, right? People are forced, divorce, injury, etc.
And, 'give children for adoption', as you said above?


I kinda choked on my tea from that one. 

Sorry kids, we're in debt, off you go to your new mommy and daddy!  [8D]




MissMagnolia -> RE: Credit card crunch (12/23/2007 8:36:49 PM)

I tried to give my kid up for adoption because I was in debt this year.

They refused to take him. 22 is apparently too old and they rarely are able to place them.




awmslave -> RE: Credit card crunch (12/23/2007 8:38:11 PM)

Giving children for adoption was just to reinforce the point. My guess is that most people who accumulate credit card debt can actually substantially cut spending and are eligible for better paying jobs.




ownedgirlie -> RE: Credit card crunch (12/23/2007 8:54:14 PM)

quote:

ORIGINAL: MissMagnolia

I tried to give my kid up for adoption because I was in debt this year.

They refused to take him. 22 is apparently too old and they rarely are able to place them.


LMAO!!

I'm 42...are you adopting??




LuckyAlbatross -> RE: Credit card crunch (12/23/2007 11:20:52 PM)

quote:

ORIGINAL: ownedgirlie
Yep.  You need a card to rent a car, to guarantee a hotel room, and to buy an airline ticket.

Well I've done all of those things with my debit card, but it can be trickier sometimes and I do agree that in today's world, having a credit card is a good and sometimes necessary thing.

I also have to throw out there that this is the first generation in which most people start living more in debt than most previous generations ever got.  Rather than starting fresh and simple out of college to make good money, they start burdened with huge loans and debt already in mediocre jobs. 

It's a lot easier to go into more debt when you're used to being there. 




NorthernGent -> RE: Credit card crunch (12/24/2007 1:11:13 AM)

quote:

ORIGINAL: slaveluci

partly the fact that an alarming number of folks go into debt up to their eyeballs trying to live above their means. 



Exactly the same, here.

Advert no 1: you need a loan at our extortionate rates. Followed by advert no 2: you need this car/television/gadget etc. Followed by advert no 3: celebrity x has said car/television/gadget and you know you want to be like her/him, so do yourself a favour - get a loan that you couldn't possibly repay, and spend money you don't have trying to be like someone you don't know.

The above is basically our advertising pattern on television.

From where I'm standing, the media - television, magazines, tabloids - explicitly and tacitly approve rampant consumerism, and actually beam this lifestyle into homes every hour of every day through the television. No alternative argument exists, and therein lies the problem.

It's cancerous, with people wanting more and more and more; Saturday afternoon shopping in Manchester City Centre is something to be behold - thousands of people wild-eyed and ready to go to war over a rare pair of undercracks or the latest gadget - they look like they've been hypnotised, and I suppose to all intents and purposes, they have.

Where will it all end? At some point there won't be any "more".....what then for the addicts?




ownedgirlie -> RE: Credit card crunch (12/24/2007 1:16:38 AM)

quote:

ORIGINAL: LuckyAlbatross
Well I've done all of those things with my debit card, but it can be trickier sometimes and I do agree that in today's world, having a credit card is a good and sometimes necessary thing.


The risky thing about using a debit card for that, is if the number gets swiped or there is a mischarged - you're out that money right then & there, whereas if you use a credit card, you don't pay the charge while the company investigates.  Having had my credit card swiped to the tune of $2,000 earlier this year, I'd much rather that money stay IN my bank account and have good ol' Visa just delete the charge, then fight for however long it takes to try to get my money back.  Be careful with those things...




Lordandmaster -> RE: Credit card crunch (12/24/2007 2:12:41 AM)

Answer?  To make more money, and they don't have much to lose.  Now that they've gotten Congress to pass very favorable laws, there's not much holding back lenders anymore.  They've eliminated risk.

All this in the name of the "free market."  One thing the next administration is going to have to do is scrap all the sweetheart legislation and re-introduce risk and responsibility to industries across the board--you might say, to RESTORE some semblance of a free market.

And that includes carbon markets, for you global-warming naysayers.

quote:

ORIGINAL: cyberdude611

The banks have only themselves to blame....

First off, why give people huge credit lines ($20,000+) if they dont have the income to pay it back? Why raise the interest rate at the first oppertunity purposely putting people in further debt? Why tack on more and more fees?




Level -> RE: Credit card crunch (12/24/2007 3:08:50 AM)

quote:

ORIGINAL: ownedgirlie

quote:

ORIGINAL: YesMistressIrish
You were joking, right? People are forced, divorce, injury, etc.
And, 'give children for adoption', as you said above?


I kinda choked on my tea from that one. 

Sorry kids, we're in debt, off you go to your new mommy and daddy!  [8D]


LOL

Having said that, I do agree that much debt is piled up unnecessarilly.




Termyn8or -> RE: Credit card crunch (12/24/2007 5:02:31 AM)

NG, I almost mailed you,but I will leave it out here.

You seem to have an understanding of how big money,  media and government work together. Always remember it is not a conspiracy, it is a partnerdhip.

Nothing wrong with a partnership mate what ? Totally up and up, well not quite.

You know and I know, we just can't say it on an open forum like this, and you ALL know what I mean.

In fact I shall mail you NG, you may block it, refuse to respond to it or simply ignore it. I will not mail someone twice. By that I mean lacking response. I email, if there is no response I do not do it again, I just figure the person is not interested. At that point it is your call.

But everybody, know this I KNOW WHAT IS GOING ON, WHO IS DOING IT, HOW THEY ARE DOING IT AND WHY WE NEED TO STOP IT.

Any of you who would even claim to know 50% of what I know will know that the big one is coming. Call me full of shit, it has happened before. I have been proven right more than almost everyone. I don't want to blow my horn like this, but I want you to know and understand me, I am not full of shit, I have stood corrected in this very forum and from that you can assume that I am fallible, and indeed I am.

But I do have alot of faith in my intelligence. Even when bombarded by all kinds of erroneous information. I put feelers out there and see what others have to say. You think it is so bad baecause you can't believe anything people say ? Fuck, Earth to you, Earth to you.

The fact of the matter is you can't believe anything. You can not just not believe people, you can't believe the dictionary, the Bible, the TV, the textbook, anything.

Let me give you all,
A wakeup call,

I do not do Christmas,

Get your Christmas shopping done quick, I need to roll over a CD and this would be perfect. Buy buy buy, crank that interest rate high.

Actually it is too late to re-up the CD unless it was done possibly tomorrow morning. And at that, because there are so many secondary lenders and who knows what else out there, the old spike just isn't what it used to be. Does anyone remember the old spike ? Back when interest was very high, dammit, now I gotta go into this.

Right around Christmas time, like a week or even a bit less before, interest would skyrocket. You want to know what kind of people we are ? Dad and Grampa hadf a discussion. Gramps had CDs maturing in late September or something. Dad told him to not reup it right away, wait. Everything was explained but Gramps did WTF he wanted, and it was wrong. Dad was right, and st there and figured out to the penny what this decision had cost Gramps. But we all realize that it is his money and all we can do is give advice. He can take it or leave it. He left it, and the measley few thousand it cost him was like, who cares. This is no worse than my Mother going gambling.

So we have (this just came to me) come from an economy where my Grampa is sort of investing. He has too much money. He gets CDs and I don't mean audio or data CDs.

And then we have now, people losing houses left and right.

YES, part of the problem is the system, but people themselves are ultimately to blame. Just don't buy what you can't afford.

Here is something I did. Qualified up for a house, up to $X. Bought a house for a third of that.

Well back in the late eighties you could do that, maybe you can't anymore.

Life sucks, get used to it, and the best piece of advice I can give you just slipped my mind.

Oh wait, I got it back, don't buy.

Do not buy.

Do not buy,
I know you can't comply,
But I think that you should try,
To not buy.

Damn you people, now you got me started. See how you are.

I know a good Woman, belongs to my buddy Jack. She works alot, but has a nice house and an almost new car.

Thay used to want to get me something for Christmas, and as with everyonre I said no. I actually refuse gifts and have done so enough that people who know me know that if they want to give me something, it had better not be for Christmas.

They count on the Christmas rush, it is a big part of their yearly sales, moreso than many would suspect. If the Christmas rush were to be eliminated, there would be a big difference in the economy, and real fast.

I am going to get strong here right now, but when you read what I have to say,

They could get you to buy boats for all your friends even if you can't affor it. Some will arrainge financing.

You just don't understand how smart these people are. They hit you at 18:54:34 and make you want a hamburger. You hear a McD's commercial but there is a Rally's right there.

Now try to fucking understand this. Next time, you hear a Rally's commercial and go do MsD's. Now comes the rest of it. Buy a TV. How many brand names of TVs are there ? Lots right ? How many companies in the whole wide world actually build TVs ? Digital works, by that I mean you can count them on your fingers I mean really you don't even need your toes.

When I was in business I was in societies or whatever, all this crap. In my case it didn't amount to much, but you start talking people with some real money, well, it might mean something. We just use that in our general reasoning of things. Works for me.

Try to be well. Any of you in the crunch, I feel your pain, I mean really, my debt load is about a thousand dollars a month.

All those trips to Florida, and a few other things. If I knew then what I know now,

I might still have done it.

But then I do pay the bill.

T





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