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It's hard to find accurate stats on credit card usage and abuse -- and very easy to find plenty of spin....
But it's my understanding that over half the households in the US carry no credit card debt (as in pay them off monthly), and some of those have no credit cards at all.
So if the credit card industry banks want to shoot themselves in the foot by charging interest from day one -- they will lose lots of business in a heartbeat. And since it appears that more of us are paying down debt and saving more cash -- more and more credit card issuers will be in more and more trouble.
I do believe this, because of all the people I know -- most of them are ardent non debt carriers. Most of us use credit wisely, and pay off our bills monthly, OR -- in an emergency, use the card and pay it off quickly.
And my friends and family are a nice microcosm of people: old, young and different educational levels.... so I think we're a pretty level cross section of the population at large....
Do I think credit card business is changing? Yes. But I don't think it's going to be the doom, gloom and hysteria version as propagandized by the OP....
Well the first key to knowing that things are changing as things are functioning now. The default on cc's are a vehicle that has yet to crash and burn, just as the mortgages did. Just as with the mortgage mess, the cc world will see changes as well.
I do not have the time to go back through every news feed on every entity and point out information that we all have heard before. What you want to take from it you will. It appears as though many of you have your head in the sand. sobeit....
The OP's point was not one of doom and gloom but of fact. A credit based society is not working.
Oh and to answer the question as to who own's this country. This country is owned by china, russia and the parts of middle east. They are the one's footing the bill for our debt. China foots the bill for most our debt and they are growing weary and concerned. Should they pull in the reigns, then this country is in for big, big trouble. And that you can find by being schooled by any wise economist.
I grew up overseas, for many years in the UK. Back in the 1960's and '70's there, "hire purchase" meant buying something on a payment plan through a store.
Anyhow I recall this being regarded as a rather shameful and foolish thing to do. If you bought something like a bedroom set, say, "on HP" it was not something you bragged about....this was regarded as low class and trying to live beyond your means. Not a good thing.
Now it's accepted practice. Are we better off...?
Quote:
Originally Posted by Chromekitty
I didn't insinuate that it was recent. The fact still remains that people are living beyond their means and can't afford what they have. That is a recipe for disaster.
There was a time, when people saved money and paid for what they wanted/needed. That is when credit/debit worked the way it should. And in that time, society didn't have so many of the problems it does today.
And while you may agree with pitt chick, there is no such thing as free money.
I grew up overseas, for many years in the UK. Back in the 1960's and '70's there, "hire purchase" meant buying something on a payment plan through a store.
Anyhow I recall this being regarded as a rather shameful and foolish thing to do. If you bought something like a bedroom set, say, "on HP" it was not something you bragged about....this was regarded as low class and trying to live beyond your means. Not a good thing.
Now it's accepted practice. Are we better off...?
No, we are not better off. Our economy is proof of that.
Well the first key to knowing that things are changing as things are functioning now. The default on cc's are a vehicle that has yet to crash and burn, just as the mortgages did. Just as with the mortgage mess, the cc world will see changes as well.
This goes to show that berdee was correct in saying that many people do not understand the fundamentals of the financial world!
First of all, credit has been extended by banks ever since there was such things as banks. You make it sound like credit/loaning are relatively new economic practice that have not stood the test of time. Patently FALSE.
Second, you understand that banks could not offer accounts that pay you interest (e.g. savings accounts) if not for them extending credit/loans to others, right? Here is how it works: You deposit your money with a bank, the bank then takes that capital and loans it out. These loans are eventually paid back with interest of which you get a cut of that interest paid to the bank for keeping your money with that bank. This is what banks do! How could a bank offer you interest on your money if all they did was store it in their safe?
Third, the mortgage system failed not because the credit/loaning mechanism was faulty but because there was little oversight into who were getting loans and because those bad loans were being sold to others as investments. Its an important distinction. It is also important to point out that unsecured credit (i.e. credit cards) DO NOT operate in this fashion. For example: You owe Capital One $1000 of credit card debt, you owe Capital One bank, not some investor who bought that debt from Capital One as an investment. Capitial One would LOVE to sell that potentially bad debt to someone else to get it off their books but can't because its unsecured debt. Nobody would touch it! At least with a mortgage there is a house that could be sold off if the mortgage was defaulted on.
Quote:
Originally Posted by Chromekitty
The OP's point was not one of doom and gloom but of fact. A credit based society is not working.
See my point above....its been a credit based banking system all along...the problems started when people started getting credit they shouldn't have had. For hundreds (Thousands?) of years banks have made millions of loans that have been paid back in interest. If anything does/should change about the lending system its how to determine WHO is qualified for loan....
Quote:
Originally Posted by Chromekitty
Oh and to answer the question as to who own's this country. This country is owned by china, russia and the parts of middle east. They are the one's footing the bill for our debt. China foots the bill for most our debt and they are growing weary and concerned. Should they pull in the reigns, then this country is in for big, big trouble. And that you can find by being schooled by any wise economist.
Again, countries have been investing into other countries since there were such things as separate countries. 200 years ago we called it "Trade"...still called that today I guess. For example, it makes sense for us to loan money to Iraq to develop their oil export program. Eventually, we'll have a trade partner plus our money back (with interest). Funny thing is that the media NEVER talks about the money we loan to other countries, only the debt we owe.
This is straight media spin....they talking about China "pulling in the reigns" and all that, but the fact remains that China is deep in bed with us financially already, as we are with them. They would have more to lose by pulling out than by "staying the course" Such goes a global economy...
Location: 23.7 million to 162 million miles North of Venus
23,468 posts, read 12,487,658 times
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excellent post BB
There isn't anything I can really add to what BB had posted in his rebut to the other poster (BB did too good of a job ). But, since it appears that there are a few who think that this mess started because of wrongful use of credit cards, and/or the evilness of the CCC's, I felt that part of what he'd posted should be singled out and re-posted.
See my point above....its been a credit based banking system all along...theproblemsstartedwhenpeoplestartedgettingcredittheyshouldn'thavehad. For hundreds (Thousands?) of years banks have made millions of loans that have been paid back in interest. If anything does/should change about the lending system its how to determine WHO is qualified for loan....
There is absolutely no way a person making only $60k (+/-) could have or should have qualified for a $250k (+/-) mortgage. While those borrowers should have realized that they were purchasing more home then they could afford, they could not have made those purchases if it weren't for mortgage lenders who approved them for those loans, who then turned around and sold the loans. That is why we are in this mess !!
For those mortgage lenders .. it was greed pure and simple.
For the borrowers .. it was greed and/or ignorance.
Location: 23.7 million to 162 million miles North of Venus
23,468 posts, read 12,487,658 times
Reputation: 10438
Quote:
Originally Posted by chiroptera
I grew up overseas, for many years in the UK. Back in the 1960's and '70's there, "hire purchase" meant buying something on a payment plan through a store.
Anyhow I recall this being regarded as a rather shameful and foolish thing to do. If you bought something like a bedroom set, say, "on HP" it was not something you bragged about....this was regarded as low class and trying to live beyond your means. Not a good thing.
Now it's accepted practice. Are we better off...?
Well then, you can slap me on the a$$ and call me shameful, foolish and low class.
Let me tell you a bit about my last few, as you put it, HP's. All of the past few HP's were for between $1-2k
I had the cash to PIF instead of using credit, but I decided to use the banks money and place mine into an interest bearing account. I made the purchases, all came with discounts because of using their credit cards. All charges I'd made had 0% interest promos that ran from between 12-24 months. All purchases were paid off within the promo periods, with me not only saving by paying $0 in interest but also gaining $$ on my own money during those promo periods.
And, did I mention discounts? All of them came with discounts because I was a card holder. One of them came with a deep discount, ($700 discount) that I would not have seen if I was paying with cash.
Soooo .... someone who buys on (HP) credit who pays no interest, who is paid interest on the funds earmarked for the purchased items and who also receives discounts because of having that credit vs. someone who pays cash and receives no interest on their money and receives no discounts .... just who, in those two examples, should feel shameful, foolish and low class?
Not gonna call you any such thing.
I was talking about general perception as I remember it, from a good 40 years ago in another country. Not my own opinion of such (it's why I used passive voice in my post.)
Back then I think the HP places were like the Rent-To-Own stores you see now...where people who don't have the cash in hand, or suitable credit, to do like you did and get a zero percent deal can get electronics and furnishings but for utterly ridiculous interest rates.
Taking advantage of the system like you describe is smart.
Quote:
Originally Posted by berdee
Well then, you can slap me on the a$$ and call me shameful, foolish and low class.
Let me tell you a bit about my last few, as you put it, HP's. All of the past few HP's were for between $1-2k
I had the cash to PIF instead of using credit, but I decided to use the banks money and place mine into an interest bearing account. I made the purchases, all came with discounts because of using their credit cards. All charges I'd made had 0% interest promos that ran from between 12-24 months. All purchases were paid off within the promo periods, with me not only saving by paying $0 in interest but also gaining $$ on my own money during those promo periods.
And, did I mention discounts? All of them came with discounts because I was a card holder. One of them came with a deep discount, ($700 discount) that I would not have seen if I was paying with cash.
Soooo .... someone who buys on (HP) credit who pays no interest, who is paid interest on the funds earmarked for the purchased items and who also receives discounts because of having that credit vs. someone who pays cash and receives no interest on their money and receives no discounts .... just who, in those two examples, should feel shameful, foolish and low class?
There isn't anything I can really add to what BB had posted in his rebut to the other poster (BB did too good of a job ). But, since it appears that there are a few who think that this mess started because of wrongful use of credit cards, and/or the evilness of the CCC's, I felt that part of what he'd posted should be singled out and re-posted.
There is absolutely no way a person making only $60k (+/-) could have or should have qualified for a $250k (+/-) mortgage. While those borrowers should have realized that they were purchasing more home then they could afford, they could not have made those purchases if it weren't for mortgage lenders who approved them for those loans, who then turned around and sold the loans. That is why we are in this mess !!
For those mortgage lenders .. it was greed pure and simple.
For the borrowers .. it was greed and/or ignorance.
If you are referring to me as one of the few...you are incorrect. In no post have I said who is to blame for what. What I DID say is....it isn't working the way it is and the bottom line is greed.
Now what we may or may not agree on is who's greed is another story.
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). But, since it appears that there are a few who think that this mess started because of wrongful use of credit cards, and/or the evilness of the CCC's, I felt that part of what he'd posted should be singled out and re-posted.
