IT'S ABOUT THE CREDIT CARDS.

[cliffordu]

Every company and car manufacturer needing to be bailed out so far are ass deep in the credit card racket.

Although the malfeasance was due to debt bundling and specualtion in derivatives....the real threat is the collapse of consumer credit at the liquor store level.


If the credit cards for all the nice people in 'Murka get frozen solid cause these companies go titsup.com, katy bar the door...blood in the streets, mayhem when the Visa won't buy the 48 roll valu-pak of charmin at the Wall-mart.....

It's the only reason I can come up with that makes sense - although it is a relatively small part of the overall debt, (800+ billion) it is the one that is closest to riots in the streets if THAT credit line is cut off.....

That's the only reason I can see the Prez bailing out these people -

It can BE a worldwide depression and no one here will care as long as the Mastercard works at Mall.

All this might be bullshit, but ask yourself, what happens to YOUR standard of living if your credit cards disappeared tomorrow???

[FreakinDJ]

1. I'm not buying into that 1

Our trade deficit is so huge it boggles the mind to even think about it – we have got to get that money back some how or the dollar is worthless. No one wants to buy our stock any more considering how manipulated and over valued the markets are – so what do we have left to sell

We sold our debt

Marketed on the backs of the American worker who ordinarily are hard working home owners

[cliffordu]

3. Thanks!

[AllentownJake]

2. My standard of living would go up

I got myself into trouble when I was sick and used Credit Cards to supplement things because I was paying so much in co-pay for doctor visits. I finally did the right thing moved back home and now 60% of my income is paying off my credit card debt and student loan debt. I'll be out of debt completely as long as I keep my job in June of 2010.

I also cut up all my credit cards.

[cliffordu]

4. Dumped mine in 2001...

I don't use credit of any kind now.....

It's worth it!

[AllentownJake]

6. I'll one day have a mortgage

But I'll be putting down at least 30% on any house I buy.

[Possumpoint]

5. Cutting Off The Credit Cards

Would be the best thing that ever happened to me. I'll be out of debt by January 2010.

[cliffordu]

7. I gotta tell you, I live on next to nothing and live like a king....

I don't have to come up with three grand a month to make the nut.....

More like 800 a month for all non-food expenses.

(I own an old airstream and have it parked five miles out of town for 375 a month...)

[LooseWilly]

8. Haha.. it wasn't until last year that I was finally able to get a credit card.

Driving a taxi is a cash business... and even in the day the credit card companies looked like their heads were going to explode when I told them I made $0-$800 a week..., or $0-41K... their eyes promptly crossed, and they ushered me the fuck out the door.

If credit cards disappeared tomorrow... I'd just have shorter lines to wait in when I felt like buying stuff (though, whether any of the stores would survive I have my doubts).

[InvisibleTouch]

9. I've gone cold turkey on the credit cards.

It's tough, but not as tough as the mess I got into from using them. And once I adjust to a "cash only" personal economy, I know I'll be better off.

[Fire1]

10. I've been living a 'cash only' existence for about two years

now and I LIKE it!;-)

[cliffordu]

11. True freedom in this country, for sure.

:hi:

[CoffeeCat]

12. Credit-card spending fueled...

...our economy for a very long time.

Think about it. If 70 percent of the U.S. economy is consumer spending--that means that a lot of
credit-card spending propped up the boom of spending that happened during the past 15-20 years.

People purchased things with money that they did not have. People were able to "extend" their
income with credit cards. The economy boomed. Many stores that issued their own retail cards
made a killing as well. Pier One, Pottery Barn, Home Depot, Lowe's, Target, Sears, etc. They
made so much more money when people used those cards.

The demand for all goods and services increased due to credit cards.

Why did this happen? The credit-card companies and other big corporations lobbied for deregulation
on the industry. Our Congress members allowed them to charge us horrendous interest rates, unfair
late fees--and also gave these companies the right to cut off our credit without notice or lower
our credit limits. Plus, they lobbied with the banking industry to screw over the consumer with
the new bankruptcy laws. Now, when you declare bankruptcy--you still have to pay off those credit
cards. The debt is never erased.

People are not spending wildly like they used to. The party is over...O--VER!

If anyone wants to understand what's really happening with the economy--look at the behavior of the
credit-card companies. These bloodthirsty, greedy companies drained every last drop from us. Now,
they're paying people to send back their cards. They're cutting lines of credit and they're canceling
cards. None of these companies want YOU holding their card in your hand--when the whole thing crashes
and burns---and people go into panic-stockpile mode.

Believe me, if these companies thought they could get a nickle out of us--they'd still be playing
the game. They're so done with us. The credit-card companies are doing everything they can to
cut people off--or anger them into cutting up their cards.

The behavior of these companies is very, very telling.

[cliffordu]

13. Yep - your post could be it's own OP....

[invictus]

20. Excellent post!

nt

[tammywammy]

14. The only debt I have right now are my mortgage, car and student loans

I debated long and hard before taking out the student loans too.

No credit cards, haven't used them in years. :)

[cliffordu]

15. Good for ya...We should start a union of citizens who want to end the credit

card ripoff....

Maybe get good rates on car insurance like non-smokers do...heh....

[phleshdef]

21. Same here, those 3 things are the only debts anyone should have.

[SoCalDem]

16. How the Credit Card Monster Killed Us.

How the Credit Card Monster Killed Us.

Posted by SoCalDem in General Discussion
Sun Sep 28th 2008, 01:23

Human nature, being what it is, had no real chance against the "monster".

There was a time, when there were two "types" of consumers.

1) credit-worthy
2) not credit-worthy

Waaaaay back in the olden days (circa 1960's & 1970's), individual stores handled their own charge/credit departments. These were usually quite stern-looking, bun-wearing ladies, seated at desks, up on the mezzanine level.. They literally looked-down-on the sales floor. Credit was not "given" freely, and sometimes, one did not even know what the "limit" was.. The few who had "charging privileges", knew that they had better pay off that entire bill when it came, or their charging privileges would be yanked..in a heartbeat. The most stomach-flipping experience was when one of them picked up the phone and called down to the clerk ringing you up, after she received the pneumatic tube with the sale information.

Charging privileges gained the stores a loyal customer base of customers they could trust, and they treated that "charge customer" very well. Items were often delivered to their homes "on approval", special orders were never a problem, and even "off-hours" shopping was not unheard of. Most people shopped where they had "charging privileges".

These folks were the doctors, lawyers, local politicians... the professional, moneyed-class..Many times, even employees of the stores did not warrant "charging privileges".. I did have them, from age 16, at most stores, because of who my Aunt was. She was a big shot in our town, and I was on her account, but they always called her before they let me charge anything

Everyone else paid cash... If you wrote a bad check to one of these stores, it would not be surprising to see all future check-writing at their stores, forbidden. Most registers had lists of "no checks from" customers.

It's not hard to see why when credit cards like BankAmericard and MasterCharge came along in the 1970's, they were immediately embraced by all who could get one. It was the great "equalizer", and it said to all who watched you whip one out.."I am a credit-worthy person..I don't HAVE to pay cash like the rest of you peons"..

Remember when the "color" of the card sent a coded message too.. A Gold card said.."I am REALLY a big shot"...but then came Platinum and Titanium (isn't titanium just another shade of "silver".. ..)

When we got our BankAmericard in April of 1970 (I remember when, because we had been married a month, and I thought it was very odd that a bank we did not even have an account with, just sent it to us..out of the blue..like a wedding present), I was afraid to even use it, for fear that we would "reach the limit" and be "in trouble"... The limit? $500

When "things people wanted" started to cost more than what the normal credit limits would allow, the only option was to apply for and get MORE cards, or for the card companies to extend the limits upward...and to encourage revolving credit, with higher interest rates as time went along...

Once you OWE a revolving credit balance, you either have to stop using the card for current purchases, and concentrate on paying it off, or you have gotten on a merry-go-round that only goes faster , and never lets you off.

It's no accident, that just as the Boomers were entering adulthood, that the credit industry took off in a big way. Parents-of-Boomers were taught from childhood that debt was "sinful", and to be avoided at all costs, but Boomers were the children-of-plenty, so why would they suddenly start being frugal as they grew up?

When Boomers started buying houses and putting down roots, they had to alter their buying habits somewhat, as they became responsible parents, but if they had those plastic cards, they could at least "feel rich" when they went shopping, and worry about paying for it ...later.

LATER ALWAYS COMES....

and that's where equity loans come in.


Ronald Reagan did away with the deductibility of interest when he took over. Until that time, you could deduct ALL interest paid, on your income taxes..car loans, charge accounts, ALL interest payments. Before that happened, it almost made sense to charge things and to pay them off slowly, since you could deduct the costs of doing that.

Equity loans must have seemed like a Godsend when they arrived on the market in a big way. Here was finally a way to "get rid of those damned cards", and turn that credit card debt into a "deductible expense". Everyone I know, who did this, said "We're cutting those things up and NEVER using them again"...and then they didn't, and they did ..There's that human nature thing again..

These people had probably put down 20% on their house when they bought it, had a payment they could afford, but that equity they were building, was just too enticing to pass up tapping, if they could "get out of debt". By tapping it, they were only borrowing from themselves..right?? right??..and that extra monthly payment was deductible, so why not just do it?

Multiply that by millions of home-buyers, and you know what happens next..

Credit card companies saw a whole bunch of people who suddenly did not owe them anything, and that just wouldn't do, so knowing human nature, they started offering all kinds of "goodies"...

Some people paid off the cards and never used them again, after the first time, but many more saw their house as the gift that keeps on giving, and turned it into an ATM with 4BR,2BA,2car GAR & a pool.

Eventually, when houses quit appreciating, the banks started saying "no", but the credit card companies still wanted their money.

The only solution then was to get even MORE credit cards to fill the gap..(wages sure weren't keeping pace) and to start the "transfer game". That worked for a while, but as banks started gobbling each other up, transfers stopped "working" too.. Can't transfer that MBNA balance to BofA when BofA buys MBNA..

The Credit Card Industry has been squeezing and squeezing for years now, and now that they have constricted the life out of their customers victims, they are ready to swallow them..

[cliffordu]

18. Great post! And it should be it's own OP again!!!

I insist.

[SoCalDem]

17. and,,,

Here's a very succinct overview of how we got where we are.. (from 2005)

Posted by SoCalDem in General Discussion
Tue Sep 16th 2008, 07:02

The odd thing, is that 3/4 of the way through the report is some commentary from two Lehman Bro's "experts"..who were , at the time, no doubt, cooking the books

But the overview gives a very easy-to-understand primer on how we have dug the hole we can no longer see out of



http://www.imdiversity.com/villages/global...

The United States: Heavy Debt Load Causes Vulnerability to Rising Rates, Foreign Currency Imbalances

Growing debt has long been a concern in the United States, from individuals buying on credit to Washington budgets. But many economists are now warning that runaway spending and borrowing have the nation on track toward a major economic crash. The second in a three-part series, this story looks at scenarios in which debt could cause a major economic setback.

Special Report- Part Two

August 26, 2005

By EILEEN ALT POWELL


NEW YORK (AP) _ Buy now, pay later: It's been the mantra of American consumers for decades. The results are obvious in the ballooning balances on credit cards and mortgage loans, and in the mushrooming U.S. trade deficit, which reflects the nation's nearly insatiable appetite for cheap, imported goods. Low interest rates, especially since the end of the 2001 recession, have fed the debt beast at home, allowing American consumers to accumulate nearly $11 trillion in debt as they buy more homes, more cars, more clothes, more dinners out. At the same time, foreign investment in the United States is helping to keep the dollar strong, which holds down prices on those imports that Americans covet.

But what would happen if interest rates suddenly weren't so benign, or if foreign governments, corporations and individuals stopped investing so heavily in America? Some analysts fear such actions could trigger doomsday scenarios in which the bills come due and Americans can't pay, with devastating consequences for the entire economy. The Associated Press asked some experts to discuss what could burst the debt bubble in three areas that appear most vulnerable, and to offer a rebuttal from the perspective of people who believe that while the country may be in debt, it's not in danger.


CREDIT CARD CRUNCH

The tool that has made it ever so easy for Americans to buy and buy and buy is the credit card. And buy they have. Outstanding balances on credit cards have risen to more than $800 billion, or some $7,200 per U.S. household. That's the equivalent of three plasma TVs, or 24 iPod digital music players, or more than 1,200 Big Mac meals. It's more than double the indebtedness of a decade ago -- and it doesn't include an additional $1.3 trillion in debt for cars, appliances and personal loans.

With the savings rate hovering near all-time lows, most consumers don't have reserves, and so they're vulnerable to an economic shock. What if interest rates suddenly shot up, say 3 percentage points or 4 percentage points, requiring burdened borrowers to greatly increase the amounts they have to pay each month on their debt?


snip ...................for the "rest of the story"

[earth mom]

19. No-it's about bailing out the banks so that people will HAVE to continue to pay off

their credit cards.

If the banks go belly up, how many "consumers" -not citizens mind you-would just blow off their debts to banks who were DOA?

The banks would NOT get a dime from "consumers" that's for sure and the banks don't like that, not one little bit.

This whole thing is very much about keeping the people in slavery to the powers that be.

Because if it wasn't, we would all be getting OUR bailout.

Which we haven't.

NO- instead we got the chump change bullshit of $25 bucks a payday.

Hardly enough to buy diddly squat or pay off diddly squat.