Letters to the Editor

Your views in 200 words or less

DEBT: Easy credit spending out of control

Letter by Lyle Laws, Puyallup on Dec. 12, 2011 at 11:46 am with 15 Comments »
December 12, 2011 3:06 pm

It’s easy to blame those big, bad banks for the financial mess many people find themselves in today. But, all too often, the people who are hurting the worst and complaining the loudest have no one to blame but themselves.

A few months ago I made a purchase at a well known department store. When I checked out, I was told that if I would answer a few questions, I could get a 10 percent discount on my future purchases if I signed up for a credit card and agreed to pay 21 percent interest. No thanks.

On average, credit card purchasers pay 12 to 20 percent interest depending on their credit ratings, and, of course, those who have the poorest credit ratings are the ones who are most likely to charge . I suspect that includes many of the Wall Street protesters.

Long-term loans for purchasing homes, automobiles, home appliances, or for starting businesses make sense, but when people don’t have enough cash to pay for “Surf and Turf” dinners, an evening of entertainment, or a Caribbean cruise, they shouldn’t be mortgaging their financial futures.

Unfortunately, the federal government operates in the same manner, which accounts for why the interest on our national debt is now more than a billion dollars a day.

Leave a comment Comments → 15
  1. redneckbuck says:

    Credit cards and the lottery are taxes on the stupid!

  2. alindasue says:

    Credit cards only have one good use: to pay for things like rental cars and other travel expenses where cash or debit is not accepted – and then only if you can pay them off immediately rather than treat them like an “easy payment” loan.

  3. cclngthr says:

    Banks are the ones that want people to charge. They lend money and often find people cannot pay it back. What banks can do is refuse charge cards to those under a certain income and supervise those card usage very closely.

    We need to go back to the days of layaway and paying cash for everything.

  4. cclngthr says:

    alindasue,
    Car rental can be paid with a debit card. Most debit cards are mastercard/visa anyway so they act as credit cards.

  5. alindasue says:

    cclngthr,

    I worked for a major rental car company for nearly 10 years. My sister still works for them. I have seen many customers turned away who only had a MasterCard/Visa debit card and not a regular credit card. There are many things you can do with a debit/check card, but rarely is renting a car one of them.

    A few years back when some kid new to driving on ice totaled my husband’s car, the insurance said they would pay for a few days rental. The problem was that even though the insurance would pay for the rental, we still had to provide a credit card which we didn’t have. We were told that we could use our Visa debit card BUT they would place a $100 hold on our connected checking account for the duration of the rental, even with the insurance company paying the bill. Since we didn’t have $100 that could be tied up for those days, we ended up going without the rental.

  6. alindasue says:

    By the way, cclngthr, I agree with you about going back to the days of layaway and paying cash instead of credit cards…

  7. “We need to go back to the days of layaway and paying cash for everything.”

    Why do ‘we’ need to go back? Why do you need me to go back there with you? You are free to manage your finances as you wish.

    What banks can do is refuse charge cards to those under a certain income and supervise those card usage very closely.”

    They do refuse charge cards for people under a certain income. They also have charge cards to help people by providing low credit limits like $250.00 to $500.00. And also they do supervise by providing a credit limit that the card is declined if you, the user of the card, attempt to go over the credit limit.

    What more do you want them to do?

  8. This whole analogy of families having to balance their budgets is rather simplistic and only works if one actually thinks that the majority of American families are prudent about finances.

    First: A family isn’t a country, a Country isn’t a family.
    Second: Most families – even the most frugal – are hugely in debt if they “own” a home.
    Third: The American economy, since the 80s, is based in consumer spending. And, since the 80s and the erosion of good middle class wages, consumer spending has been based mostly in credit.

    You can’t blame the mortgage crisis on the consumers and then turn around and point to homeowners’ financial planning as a good model for the country. (Of course that completely overlooks the Derivative crisis which makes the Mortgage crisis look like a speck of dust in comparison)

  9. Not sure where you are coming from, but I’ll play…

    I don’t care whether you are prudent with your finances or not. You spend more than you take in then over time you will accumulate debt and over time that debt will become too cumbersome to manage and then you (euphemistic you) will fail unless you alter your behavior at some point prior to the coming fiscal train wreck.

    Nope a family is not a country, a family is a very small component of what makes this country great.

    If you own a home, you bought on credit, yes, you are in debt. There are ratios that act as guidelines for managing that debt. Exceed the ratio and life sucks. Stay below the ratio and life can be OK.

    You (the euphemistic you) are an full blown idiot if you spend money on credit beyond your means to pay it back. Idiot is the only word I can think of right now to describe a person who spends more than what he makes especially on goodies (TV, cable, lattes, movies, smart phones, iPads, etc…)

    Derivatives – the companies that bought derivatives are full blown idiots for buying a product they did not understand. They deserve to pay a fiscal price for their actions. And if a criminal act occurred they deserve to go to jail.

    ‘They’ ‘those people’ ‘them’ etc… are us bb

    In alignment with the letter, the Federal government would do well to spend less than it takes in.

  10. “I could get a 10 percent discount on my future purchases if I signed up for a credit card and agreed to pay 21 percent interest.”

    You pay no interest if you pay the bill within 30 days. Money management is the issue.

  11. LarryFine says:

    “What banks can do is refuse charge cards to those under a certain income and supervise those card usage very closely.”

    Kooky, that’s what the banks were doing with home loans when the government got involved… and ultimately helped usher us into the mess we are in now.

  12. It is like they want to reject one master – corporations, only to grovel at the feet of another – government…

    One you can choose to accept or reject their colorful offers, no one will force you one way or another.

    The other will promise to serve and protect but what happens when you do not wish to engage in a relationship with them?

    Gallup has an ongoing poll that is worth a look. In the end the responsibility lies with you.

    http://www.gallup.com/poll/151490/Fear-Big-Government-Near-Record-Level.aspx

    free will my brothers, free will, serve no one…

  13. lylelaws says:

    RW

    I misspoke when I said I was told that I would get a 10% discount on my future purchases if I agreed to pay 21% interest.

    What I meant to say is that I was told that if I would answer a few questions, I would get a 10% discount on the purchase I was making and would be issued a credit card that would give me a 10% discount on certain advertized special offers in the future, if I would agree to pay 21% interest on the unpaid balance.

  14. alindasue says:

    RW98512 said, “You pay no interest if you pay the bill within 30 days. Money management is the issue.”

    Read the contract carefully when you apply for a card. Some cards allow a grace period where no interest is charged, others don’t. The bank we got our card from had four different cards they offered, each with different terms, benefits, and fees.

  15. surething says:

    We have a credit card for hotels and things requiring a card, but everything else is cash. If we don’t have cash, we don’t buy it.

*
We welcome comments. Please keep them civil, short and to the point. ALL CAPS, spam, obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. Thanks for taking part and abiding by these simple rules.

JavaScript is required to post comments.

Follow the comments on this post with RSS 2.0