DISQUS

Matt Ranlett · 1 year ago

Heck no! Credit card debt is not a fact of life or a result of the housing market crash. It's generally the result of less than responsible money management. There are always exceptions and emergency cases, but almost everyone with credit card debt has that debt because they are living above their means. Ask someone who lived through the Great Depression about money management and belt tightening when things get tough.

Given that this crisis started with bad home loans, wouldn't a better use of that money be to fix those home loans so that the people who have them aren't forced to default? Notice I didn't say forgive. I'm completely opposed to the government taking MY money and giving it to someone who is less responsible than I am. I am COMPLETELY in favor of the government taking my tax money and using it to correct predatory lending situations.

Also isn't it time for heads to role? I thought that the principle of a free market capitalist society was that if you take a risk you have a chance of a great return and a chance of a total failure. How is it that when a person takes a risk and loses, their job, retirement and home might be forefit? However, when a big organization like AIG takes a risk and loses the government steps in, backfills the lost revenue, and no one loses their jobs, retirement, or home? I'm not saying we should target the CEO and take the money they earned away. I'm saying we should demand that if the government needs to hand you millions or billions of dollars then perhaps entire rooms full of people should be frogmarched out the door and invited to never come back.

If a doctor or lawyer does something terrible they get disbarred and can never do their job again. If a high level manager does something horrible, they work through it or move to a new company to try again. I understand that there is risk in business, and I'm not asking for things to be fair. I am thinking that if we're going to be a free market economy we should allow for failure.

rob · 7 months ago

When you lose your job or the company you started goes down the poop shoot you will being singing a different tune.

Writer's Coin · 1 year ago

I've been thinking about this a lot lately, what with the elections coming up and all. Where do you draw the line between helping people that have turned to credit cards for everyday needs and those that irresponsible paid for frivolous things they couldn't afford?

Sorry, a little off topic. I think the money may eventually have to go to credit-card debt, but for now don't we need every possible penny of this to address the mortgage mess?

Eric · 1 year ago

Where do we draw the line? How can I teach my son about personal and fiscal responsibility when the govt is just bailing everyone out. I am losing my motivation to be fiscally responsible. Why should I be when I can just charge up a lot of debt and ask for a bailout? Furthermore, how do you qualify for this? Will this just be people who have lost jobs due to the economy and now are struggling? Who is say those people were not irresponsible with their money before they lost their job. Almost all the people I know who are struggling financially are products of their own fiscal irresponsibility. My neighbor who is having issues has a hummer and a BMW in his driveway, a brand new flat screen T.V and a bunch of other stuff. He has made no effort to decrease his living despite a pre foreclosure and a few accounts going into collections.

There has to be a line drawn, and I think the govt needs to step aside and let things happen. I'm tired of my tax dollars being spent on people who can't be responsible with their own finances or life.

Brian · 1 year ago

It's easy to see the upside. If you pay close attention to those who appear to have seen the mortgage crisis very early, those same people are also seeing a looming unsecured consumer debt crisis. And, though in some cases the homes have become worth very little, the debt is still an asset-backed security. Don't pay, the bank owns the home and property. At present, the banks may not know how to accurately value these assets, which is what is causing the massive write-downs, but in the end everyone knows they are worth SOMETHING.

In a credit card meltdown of similar magnitude, it appears any write-down would be a complete loss. For those who simply splurged, no bank is going to come in and raid your home theater to hock on eBay trying to recoup their losses. Even worse for those who began daily living on unsecured credit - food, gas, utilities, even mortgage payments - consumables already gone.

Forgiving such a debt would have to be built with huge protections, otherwise - like in the mortgage crisis - you are rewarding bad behavior, which is asking to be bitten again.

Cap · 1 year ago

Wow. for some reason consumer credit card debt bailout seems more annoying than financial institution bailouts. heh. I seriously hope this is just some topic AP is reporting and that it wont get much steam. Above comments made all the point already so I won't add to it with my ranting.

Lou · 1 year ago

If racking up credit card debt beyond one's ability to repay does not negative implications, how can consumers limits themselves? Why should they? This whole bail-out plan concerns me.

SteveDH · 1 year ago

Absolutely NOT. That goes for any bailout of the cities and states that didn't adhere to sound fiscal policies as well. This bailout is a mistake from the start and will only add to the problem. Fixing a "credit crunch" by facilitating addition borrowing will only encourage more risk taking ans less responsibility. We need to fix the banking system by limiting their scope and increasing, rather than decreasing, their required reserves. Fractional reserve bankin
g and allowing banks into the investment and speculation business was a huge mistake - turning banks into casinos that made BAD BETS.

Matt Ranlett · 1 year ago

Consumer debt has been an impending disaster which financial pundits have been warning the country about forever. Check these sites: 1 2

Check out a 103 year old scan of an article criticizing debt: 3

Credit has just become another type of fiat money. Money markets expand and contract. If the credit market contracts it becomes harder to get money and the economy will suffer. Are we talking about the end of the world? I seriously doubt it.

Mr. ToughMoneyLove · 1 year ago

The answer is no and it makes no difference that the credit card was used for "essential" expenses. If it is the latter case, there are most assuredly other non-essential expenses that were sucking cash away. Heck, if we are going to forgive credit card debt, let's just make filing bankruptcy as easy as getting a no-fault divorce. Sign a paper that says through no fault of your own you're broke and file it. Debt is gone.

KMB · 1 year ago

I can see from the messages already left that most are not in favor off bailing out the people that have credit card debit. These people probably have a job, want for nothing like food, health care or a mercedes. But there are alot of us out here that do work hard, drive a old chevy and hope that someday we can afford healthcare. Not everybody has used their credit cards for frivolous items. Medicine yes, food yes, doctor bills,childrens needs that are nesscities and just basic survival.

PLEASE STOP BASHING THE PEOPLE WITH HIGH CREDIT CARD DEBT BECAUSE YOU DONT KNOW WHAT THAT PERSON HAS BEEN THROUGH OR GOING THROUGH. OH AND BY THE WAY AT THE AGE OF 14 I HAVE HAD TO SUPPORT MY FAMILY WITH LITTLE EDUCATION SO IF I HAVE MISS SPELLED SOME WORDS WELL PLEASE FORGIVE. NOW YOU HAVE THE OTHER SIDE OF THE PICTURE!

jason · 7 months ago

Amen!

jason · 7 months ago

you are totally correct

Carlosbusinessconsultant Denve · 1 year ago

Where is my good credit cut? This is absurd. You give the money to those who can manage it best. Not to those who will leverage it out to a bigger loss. I have managed my debt but I don't get relief. I will get a bigger tax. I have to pay all my debt whereas my incompetent friends family and others who blew their money on cars, electronics and fancy clothes and houses too big for them, get their excesses free.

You guys seem to know about debt. You will manage it better than the idiots that overspent. Imagine giving this money to those who can manage it and make it grow.

Ken Lay Enron was convicted for far less losses. The stuffed shirts on wall street and capital hill are watching each others backs. Pisses me off. Don't let the congress get off easy, abolition of Glass Steagal act and the mandate of loans to previously bad areas to invest (redlining) was congress's fault also. And the republican Presidents that didn't at least tell everybody this was a lousy deal. Democratic presidents love these socialist ideas. All this, is to put more money into congress's pockets when they run for re-election. They get to keep the unspent contributions, that is why they are always running for office. They create more havoc so that we have to have Congress manage a mess, they create.

Lou · 1 year ago

To debate if the politicians are right or wrong on the issue assumes that they have good intentions to start with. I do not think they do. It is all about power and making as many dependent on them as possible. IMHO, they do not give a rat's rear end regarding who they help and who they destroy.

Jason H · 1 year ago

KMB: I'm sorry but I can't sympathize. In the end debt is a product of bad planning or calculated risk. My wife and I lived on a grand total of $13,000 a year after taxes while I was finishing my masters and guess what... no credit card debt! In fact, we only used our credit cards for food and gas because we got airline miles for it so we could take a free flight to see family. All we have left from those 2 long years is my student loan debt and that would fall under the category of calculated risk debt. It was a calculated risk that the $25,000 investment in education would be repaid with a better job than I had before I went back to school and in the end my salary increased 200% over what I was making before I went back to school.

In the end, credit card debt shouldn't be forgiven by our government. In fact I think that people in homes they can't afford should be foreclosed upon. If you can't afford it go rent an apartment and let the home prices fall so more people can afford to buy a home.

jason · 7 months ago

Why are you so quick to stick it to the taxpayer? The credit card companies have screwed people for years, it's about time they got screwed.

Jim · 1 year ago

KMB: I agree that there are probably a minority of people with credit card debt that didn't do anything irresponsible but ended up in debt due to hardships beyond their control.

But the overwhelming majority of credit card debt in the country is due to people living beyond their means and unnecessary / frivolous spending.

Surely theres no good reason for higher income people to have credit card debts. But thats who owes most of the credit card debt. As of 2004:

<ul><li>over half the credit card debt is owed by families making over $50k a year.</li>
<li>40% of households making over $85k a year have credit card debt averaging $7600.</li>
<li>The top 20% income tier owes over 4 times as much as the bottom 20% tier.</li></ul>

Jim

The Arrow · 1 year ago

Credit card companies need to share in some of this blame. I'm not saying that people who rack up debt buying items they dont need are innocent. Just look at who gave them this credit in the first place. Credit offers arrive in my mail box almost daily. Most offering some great interest rate which later skyrockets to upwards of 27 percent or more. Not because of a late payment or over the limit charge. Credit Card companies will jack your rates up because you have too much of your balance charged up. Whats the point of having a pre-set credit limit if you can't use it? Never mind the fact that you have never defaulted and always paid at least the minimum payment on time every month.

Julie · 1 year ago

What about just forcing the credit card companies to ease up on the interest rates and late fees and be willing to work with people paying off the debt. A lower interest rate would help alot of people I am sure.

Eberd3 · 1 year ago

The banks/credit card issuers actually brought on a lot of this themselves (as well as those that overextended themselves) ...hear me out on this. The Banks/Credit Card Issuers pushed Congress to make it tougher for folks to file bankruptcy on credti card/unsecured debt. People chose to pay their credit cards before paying on the mortgage. Now that credit card debt has grown - you see more foreclosures! Once forclosed on -people have been turning to credit cards to live and just keep getting deeper in debt. The credit card companies CAN stop additional debt by cutting off the credit, however they continue to drive the debtor DEEPER into the hole with continued late fees and interest even when the use of the credit card has stopped!!

I would much rather see the bailout money used for debt counseling and consolidation loans - to help teach people how to budget and give them the opportunity to pay off a less overwhelming debt. Just my random thoughts....

jason · 7 months ago

I agree with you totally, there should be no mercy to these CC companies, the credit card bill that was signed today was a joke, the maximum that CC companies should be able to charge for interest is 10 percent or even less would be even better. There should never be late charges, or extra fees. You are also correct about the bankruptcy thing, they made it harder for us to go bankrupt, yet they continue their high interest rates, rate increases and fees. I think the bankruptcy laws should revert to what they were before 2005 as well.

Jeff · 1 year ago

Like above I also agree...The banks/credit card issuers actually brought on a lot of this themselves! They have also dug deep into the consumers pockets by giving more credit on their credit card accounts when they shouldn't have, knowing the consumer will end up in a loss. Today anyone that carries a balance from month to month are or will be hit with huge APR rates that will push the consumer to give up on paying the monies back. 10k balance @ 21% is about $200.00 per month in interest, and the minimum Pmt. is around $230.00 I guess since most bank/credit card companies have received anywhere from 10mil. to 25bil. they and the government should push credit card rates down to a more normal rate, like below 5%

Did anyone know that credit card companies have 40 to 60 employee's that are part of a THINK TANK, yep I know first hand and all these people do for a job is to figure out ways to create NEW hidden fee's that they can use on accounts and YES this is 40% of the business that puts money in their pockets!

Also -- not that long ago if your credit card account had a rate hike due to whatever reasons, you could call your credit card company and actually talk to someone and get results that would lower your rate and ease the pain of paying the money back... TODAY that will not happen, if you carry a balance that is 40% of your credit line and your rate is high nobody will talk to you about lowering your current rate. Example...Discover, if you call to speak to someone about your card rate, they will first look at your account, run their numbers and say your account doesn't qualify for a lower rate change.

The kicker here is you can't even speak to anyone in the APR department, just customer service and if you insist you talk to someone in the APR dept they will not transfer you and tell you that they will send a FORM by MAIL to fill out and then to send back explaining why you feel your credit card account should have a lower rate... ARE YOU KIDDING ME

Who ever thought that a person for 20+ years paid their bills on time every month with a credit rating of 740 and still get shammed in to huge crazy rates.

jason · 7 months ago

they are scum and I hope they all collapse, it's about time we all started paying with cash anyway, we don't need credit card companies

Rob · 1 year ago

Why should banks and large wall street firms get bailed out but not the consumer? The people that operate these places did just as bad a job as the people with credit card debt or worse because they were to set an example. They all walked off with millions of dollars and left everyone holding the bag. As far as im concerned if one gets a bailout then all should get one.

jason · 7 months ago

amen brother!

Lauren · 10 months ago

I think lowering the interest rate from 18% 25% 29% down to 5& or * % woudl help the everyday person and teh credit cards companies woud still get their money.

jason · 7 months ago

I second that, it should be law that credit card companies can never raise interest rates past 5 percent,that should be the maximum, even if someone is late or defaults. No late fees, default rates. Just one set interest rate for everyone 5 percent. Then when someone does default, no fees or interest rate hikes should take effect, just send it to collections as usual.

ReallyGetReal · 7 months ago

Let's not forget that businesses pay a percentage to the credit card companies also. This is usually 2-3% + a per transaction fee.
Must be be nice to be able to collect that and then stand on the steps of the white house with your tin cup.

jason · 7 months ago

exactly, they are the scum of the earth

jason · 7 months ago

The damage is already done people, we already spent trillions in bailouts and stimulus, yet not one dime has come to me or anyone I know, I don't see why you people are so quick to vote down a credit card bailout, it's something that helps the average taxpayer instead of greedy corporations, banks, and credit card companies. It's as if you have all been brainwashed into thinking that we the people don't deserve anything at the same time giving away our money freely to these scumbag corporations, banks, and credit card companies who will use the money we gave them to continue to screw us into financial slavery. Instead of a credit card bailout, I would rather just see every taxpaying American receive a tax free check of at least 50,000 dollars to spend however they damn well please. I don't think that's asking for too much after bailing out these failed institutions. Bailouts were not a good idea to begin with, but since the damage is done, let's get our share of the pie now. This ship is going down, might as well get as much as we can before it sinks.

jason · 7 months ago

Financial Slavery is slavery none the less. Give me Liberty or Give me Death!

rob · 7 months ago

Banks who are the creditcard companies are nothing but thieves wearing suits and ties.