Credit is no accident
You know, sometimes not being from here can be confusing. When I was growing up, my parents frequently hammered home the idea that we are all responsible for our actions. They argued that you don’t spend money you don’t have. They repeated, countless times, how important it was to pay your bills on time. I took all this to heart and used it in my daily life. Then I came to America.
I am still amazed at advertising on television that proudly touts the advantage of using this or that service, that enables you to get out of debt by negotiations with credit card companies for “pennies on the dollar” These ads usually include relieved, smiling people who spout platitudes about how wonderful their life is now, and how awful it was when they were being hounded by creditors. Wait a minute! Was this debt forced upon them? Did they one day go to the bank and were forced to take a loan, or taken at gunpoint by an employee of the credit card company to the mall for a shopping spree they could not pay for? No. The truth is, many people make poor financial decisions and expect “someone” to bail them out. And advertising reinforces the fact that if you are stupid and irresponsible enough to spend more than you have, then all you have to do is get someone to negotiate a financial “get out of jail free” card for you and your family.
Now, there are many, many people who get into financial problems through illness, divorce or countless other personal tragedies. In no way do I mean to include or confuse these people with those that make poor financial decisions, often out of greed and/or irresponsibility.
Why does the credit abuse rampant today matter to each of us? Because our interest rates get higher and money gets tighter when these financial Neanderthals begin to rack up more unpaid debt than the system is designed to handle. Look at the current housing market. People who took on loans with teaser rates, or with short term adjustable rates are looking around surprised when the interest rates go up and they, who are living in houses they cannot afford, are facing foreclosure. The media then weighs in as if the financial institutions somehow cornered these people in dark alleys and forced them to sign contracts they did not want. What nonsense! Anyway, we now all pay the price because there are fewer institutions willing to lend us money, and then at higher rates.
More frightening and outrageous yet are those ads from companies that boast about the fact that because they have ex-IRS men on the payroll, they can get you out of paying your full taxes due. These statements are followed by smug suburbanites proudly proclaiming that they paid just pennies on the dollar to the federal government. Don’t you have to make money to get taxed on it? What happened to that money? Did you spend it to pay your credit card which was bloated by unpayable consumption? I can foresee the day when ads will proclaim “Turn your debt into income! Never pay taxes! Keep everything you buy!”
This is not people trying - and failing - to live the American Dream. These are people whose own stupidity and greed have put them in a spot that now enables them to pay back less than what they owe! It is, in fact, the antithesis of the American Dream: get into debt, don’t work hard, keep what you can’t afford and get rewarded for your efforts in the shape of a big, fat discount. We need to urge our legislators to bring laws into effect that make it far more difficult for financial Neanderthals to get credit in the first place and almost impossible for them to repeat their sins. Maybe a test or course of some sort? I mean we have to pass a test to drive a car, boat or graduate from high school, so why not take a test to be eligible to borrow $50,000? At the same time, we need to ensure that those that are in financial hot water because of personal tragedies have access to every relief possible.
It is time to take names and credit card numbers.