Stupid Debt

[Purple]

I think its easy to judge others, a lot of people in incredible debt actually have good jobs and have prospects and a lot of people with lower paying jobs actually have an abundance of common sense and no debt. There is no generalization debt (stupid or otherwise) effects all types of people. While the debt is stupid more often than not the person isnt.

While I dont think credit card companies are to be blamed that doesnt make them blameless.

I can see 2 types of people (anyone can fall into debt but in Ireland today these 2 categories that seem to be very prevalent) that are prone to falling into debt and therefore more prone to the stupid debt. There is the young professional, everyone around him and her are buying houses, cars, xboxs, latest fashions, 2 holidays a year most of the peers have high CC debt. Unless they hang out on AAM or have a parent or friend who explicitly points out the danger they are in they find themselves owing a lot of money.

The second type are young families, creche fees, cars, kids, pressure to keep up with jones, not wanting to let your kids down at christmas time, Mortgage etc. slowly and surely bills consume all the salary and living is off the CC. This group are more savvy than the first but are caught in a debt trap of types.

Getting out of debt is like dieting - every new year you swear you'll lose it this year. You read testimonials, you follow books perhaps but there has to be a click inside you to make you want to lose the debt to make that ultimate step.

I don’t disagree with your groupings but the responsibility is still theirs. There is no excuse and no situation where living off a credit card for day-to-day expenses is ever a good idea. The first time the grocery shopping is done on a credit card is the time to sit down and cut back or increase your earnings.
I suppose what bothers me is when people start to blame banks or credit card companies for their woes. We have too choices; we can live within our means and stay safe or we can borrow and gamble. When we borrow we should ask a few what if questions. If we don’t ask these questions or we ignore the answers that’s nobodies fault but ours.

I just don’t buy the “It’s not all their fault” line. It is, 100%. If things don’t work out based on actions that adults took then they have no-one else to blame.

 

[Purple]

This thread is a bit sanctimonious isn't it?

In what way?

 

[ClubMan]

This thread is a bit sanctimonious isn't it?

Hypocritically pious? I don't see how...

 

[Sunny]

Hypocritically pious? I don't see how...

Good use of on-line dictionary. You should of just asked for a definition!

Purple, I agree with your original post about people living beyond their means but some of the subsequent posts (ok one post) have a sense of self righteousness about them. For example:

"One of the reasons these people have low income i.e. poor jobs could be because they dont have much common sense."

"I would agree that a lot of these people are very unhappy - wouldnt you be if you were stuck in a low paid dead end job with no prospects. These people have very little to look forward to in their day to day lives."

 

[casiopea]

I don’t disagree with your groupings but the responsibility is still theirs. There is no excuse and no situation where living off a credit card for day-to-day expenses is ever a good idea.

Yes I agree, its their responsibility, their fault - no argument.

However I feel CC are happily exploiting this problem rather than trying to help. The CC companies are a business at the end of the day (not a charity) however rather than upping limits without question - maybe they should ask customers (who repeatedly dont make repayments) how they are managing their debt? Point out facilities like MABs or AAM to them perhaps. In the first group of people I pointed (the young spender) they actually more often than not dont realize that this is not atypical spending. They dont believe they are at fault, as they dont realize anything is wrong. Often times the only people that know their CC balance is them and the CC company, the CC company could (if they wished) plant the seed of debt management. Not only do CC companies up limits unquestioningly for this group when asked, but the CC company frequently write unprompted with "congratulations, your limit is now 2K higher" type letters.

I am possibly being marvelously naive here, I just feel while the CC isnt to blame, they shouldnt exploit and profit on the problem.

 

[MrMan]

One of the reasons these people have low income i.e. poor jobs could be because they dont have much common sense.

Quote:
I think I read recently that cc companies cannot now give automatic increases in limits without asking you first.
These people are generally very quick in asking for increases in limits. They regard the limit as a target and once they reach it, they need a higher target. I dont think it ever occurs to them that they have to pay it all back some day.

Quote:
I agree with you but as an attempt to explain (not excuse) this behaviour, I honestly think that a lot of these people are very unhappy, if not depressed. I think spending whether it's for the home, on a car, a holiday etc is probably a more common way of providing a quick fix for depression than we realise.
I would agree that a lot of these people are very unhappy - wouldnt you be if you were stuck in a low paid dead end job with no prospects. These people have very little to look forward to in their day to day lives.

One behaviour that I've noticed is that low income people live in 2 x 6 month cycles. They spend 6 months of the year preparing for and talking about their summer holiday - usually some cheap resort in Spain etc. and the other 6 months of the year preparing for and talking about Christmas. Their lives are so bad that all they have to look forward to is these two annual events. They are the types who book their holidays in January and start chrismas shopping in September. They spend 6 months of the year in "holiday clubs" and the other 6 months in "christmas clubs".

Nothing quite like a nice bit of snobbery, how do those poor people get out of bed in the morning.

 

[Purple]

Yes I agree, its their responsibility, their fault - no argument.

However I feel CC are happily exploiting this problem rather than trying to help. The CC companies are a business at the end of the day (not a charity) however rather than upping limits without question - maybe they should ask customers (who repeatedly dont make repayments) how they are managing their debt? Point out facilities like MABs or AAM to them perhaps. In the first group of people I pointed (the young spender) they actually more often than not dont realize that this is not atypical spending. They dont believe they are at fault, as they dont realize anything is wrong. Often times the only people that know their CC balance is them and the CC company, the CC company could (if they wished) plant the seed of debt management. Not only do CC companies up limits unquestioningly for this group when asked, but the CC company frequently write unprompted with "congratulations, your limit is now 2K higher" type letters.

I am possibly being marvelously naive here, I just feel while the CC isnt to blame, they shouldnt exploit and profit on the problem.

The CC companies are businesses. If what they are doing is causing or contributing to a social problem then it is up to the people, through their government, to change the way they are regulated.
I just don’t accept the “It’s just young people and they know no better” argument. Either they are adults or they are not.

 

[Sue Ellen]

Imo internet gambling is going to cause serious debt and I don't know how it can be monitored.

My thoughts too. I hate gambling and unless something is done about this it is going to cause many a family a lot of hardship. We've already seen some very sad posts on AAM where people are badly affected because of gambling, be it internet or otherwise.

 

[casiopea]

I just don’t accept the “It’s just young people and they know no better” argument. Either they are adults or they are not.

I didnt say that - in fact I dont think anyone on this thread is arguing that. The person who gets into debt is responsible for their debt - regardless of age - no argument.

That doesnt mean businesses should get to exploit and profit from the problem.

 

[ClubMan]

Good use of on-line dictionary. You should of just asked for a definition!

Huh!?

Purple, I agree with your original post about people living beyond their means but some of the subsequent posts (ok one post) have a sense of self righteousness about them.

If the self righteousness is genuine and not hypocritical then surely it's not sanctimonious?

 

[Klesser]

Purple i totally agree with you. Its a shame how some posters are ruining your very valid points. Let them eat cake and all that.
I got myself into a little debt before. Kid got sick I didnt have health insurance, had to go on 2 months unpaid leave so ended up living off credit card and taking out loans to pay for private appointments. I couldnt stand seeing my baby in pain and was getting no joy from the public system. Anyway thats the choice I make by working part time. Its not always black and white greed.

 

[MrMan]

The CC companies are businesses. If what they are doing is causing or contributing to a social problem then it is up to the people, through their government, to change the way they are regulated.
I just don’t accept the “It’s just young people and they know no better” argument. Either they are adults or they are not.

I would agree, I saw it on a regular basis in a past life selling electrical goods, tv etc and all outr high end stuff was flying out the door because of finance 'deals'. People were paying 29% interest and basically paying for the appliance twice over two 5 years. The funny thing about it is that most of these people didn't have cc's cause they couldn't trust themselves which is just aswell. Very few people are willing to work towards something and want it straight away. I've felt it myself when I see the houses and cars out there at the moment and you think 'do they own it or are they up to their necks'. I don't understand the mindset of people who use cards and then ignore the bills and the consequences, but I don't think it comes simply down to poor intelligence. There will be a lot of people falling on hard times in the next few years because of things like this and I don't see how things will change unless the cc companies are made to operate in a more harnessed fashion.

 

[Purple]

That doesnt mean businesses should get to exploit and profit from the problem.

How does the business pay its costs and continue to trade if it is not allowed to profit from offering credit to people?
How is the credit card company exploiting people by requiring them to honour the terms of the contract they signed?

 

[ubiquitous]

One behaviour that I've noticed is that low income people live in 2 x 6 month cycles. They spend 6 months of the year preparing for and talking about their summer holiday - usually some cheap resort in Spain etc. and the other 6 months of the year preparing for and talking about Christmas. Their lives are so bad that all they have to look forward to is these two annual events. They are the types who book their holidays in January and start chrismas shopping in September.

I'm afraid I'm guilty as charged on all these counts (except that I don't like Spain as a holiday destination). Thankfully I earn enough not to be classed as "low income"

 

[Purple]

I'm afraid I'm guilty as charged on all these counts (except that I don't like Spain as a holiday destination). Thankfully I earn enough not to be classed as "low income"

Right, we can all look down on you now, thanks for the info

 

[Luckycharm]

The second type are young families, creche fees, cars, kids, pressure to keep up with jones, not wanting to let your kids down at christmas time, Mortgage etc. slowly and surely bills consume all the salary and living is off the CC. This group are more savvy than the first but are caught in a debt trap of types.

Getting out of debt is like dieting - every new year you swear you'll lose it this year. You read testimonials, you follow books perhaps but there has to be a click inside you to make you want to lose the debt to make that ultimate step.

Agree with this - having a young family in this country/esp Dublin is expensive, I keep a tight budget but just living day to day is expensive especially if you have creche fees etc

 

[casiopea]

How does the business pay its costs and continue to trade if it is not allowed to profit from offering credit to people?
How is the credit card company exploiting people by requiring them to honour the terms of the contract they signed?

No where have I implied or said that credit card debt shouldnt be paid, and I believe CC companies are entitled to run a successful business. Anyone who builds up credit card debt should pay the debt. The credit cards companies lent the money and are owed the money - the debt should be honored. My concern lies with how the CC companies look to encourage debt with some customers who are clearly struggling. A simple example being pushing up credit limits continuously. They arent a charity, I am not saying they should wave the debt, or the late payment fee but nor should they encourage gross over spending where the customer cant afford it. Just because they aren't to blame doesn't mean they shouldn't act responsibly.

I agree with your earlier point, the responsibility does come back to the people (those both in debt and out of debt) to ensure these companies are correctly regulated.

 

[Purple]

Just because they aren't to blame doesn't mean they shouldn't act responsibly.

Their responsability is to return maximun value to their shareholders in the medium term while acting within the law. They are doing so. If their actions cause a social problem then the law should be changed. Without some sort of self regulation this is the only option and in my view self regulation results in groups restricting access to their markets and a corresponding lack of competition with the inevitable high prices this brings.

 

[casiopea]

Their responsability is to return maximun value to their shareholders in the medium term while acting within the law.

Again, showing responsibility to their customers (incl. people in debt), doesnt preclude them from making a profit, being a successful business and returning maximum value to their shareholders.

 

[Purple]

Again, showing responsibility to their customers (incl. people in debt), doesnt preclude them from making a profit, being a successful business and returning maximum value to their shareholders.

What are you suggesting they do (which does not give their competition a competitive advantage)?