Credit Card Culture
Eric at Daily Eudemon had a few comments about the latest report concerning Americans no longer saving while spending everything they earn. He cited the baby-boomers - but I’m here to tell you this spending thing spans every generation.
I work in retail, 85% of all transactions are credit purchases. Sales are slow this time of year because people are trying to pay off their exorbitant Christmas purchases, or many probably have charged a vacation to someplace warm.
Working in a Catholic religious goods store, one wouldn’t think people would come in charging up a storm, but they do.
Strangely enough, many consumers do not realize that their credit card purchases are actually loans from a bank. If they do understand this, not a few delude themselves they will pay off their bill, and avoid paying the interest on their ‘loan’. Sadly, few consumers do this however. Many have multiple credit cards, and use them liberally. A significant majority tend to max them out. These are bank loans people! And the interest rates are at usury levels.
People have car loans, home loans, student loans - unending loans - and if they save anything at all, well it’s not theirs to keep if they go into default. Being in a mass state of denial, everyone buys what ever they want with their credit cards. I work with people who go on a trip, paying for it by cashing in retirement savings, or borrowing from their 401K. Are they nuts?
If a major collapse in the Middle East oil reserves occurs, for whatever reason - if we couldn’t get the oil that lubricates our economy - the entire infrastructure would collapse. Oil prices would escalate to such an extent it would effect everything we buy - because you can’t transport product from one point to another. It would be a global catastrophe, with no one able to care about that ”global warming” thing. (Maybe our Archbishop, and the Bishop’s conference should be concerned with this dilemma, instead of the “global warming” thing. Although, I think you can charge ‘donations’ on your credit card - no one wants to stop that cash flow.)
The impact upon the economy would be devastating; retail would collapse - because the consumer couldn’t afford to consume. And the debtors, with all of their loans would default, unable to make their minimum credit card payments - as they were accustomed to do in the past. Naturally, the banks, who perpetrated this debtor society, would likewise inevitably fail.
Perhaps this scenario is not what will happen, nevertheless, our country is on the precipice of disaster - homelessness is just one paycheck away, or more likely, one disaster away.
The truth is, the majority of American people are over-extended with credit. Yet they continue to consume; to buy, buy, buy.
Customers who shop for religious goods often reason, “I might be over extended on credit, but the Lord will take care of me if I buy this statue or that book.” Nah! - I don’t think so.
A large segment of the population are all Paris Hilton wannabes economically speaking. We are a spendthrift society.
At Fatima, Our Lady told Jacinta that people ought to avoid luxury. Blessed Jacinta could not possibly have imagined the luxury Americans live in today - even some of the poor, or lower middle class. And it’s all on loan from a bank.
We are such a deluded culture.
“The economy stupid” - yeah, it’s synthetic.
February 3rd, 2007 at 1:26 pm
I have a friend that I use to work with who was an excellent salesman, and traveled and entertained a lot, generally always charging expenses to his credit card. But because all his expenses were reimbursed by his company, he was able to pay all his credit card bills within 30 days, thus paying no interest.
Then for a wedding anniversary he decided to take his wife to Europe to coincide with a huge international trade show in the industry in which we worked. As he had only a $1,000 limit on his card, he called them up and asked them to increase it to $4,000, to cover all possibilities of the trip. My friend was not a “high liver.”
The credit card company refused and my friend was furious and asked to speak to a manager. The manager patiently explained to my friend that since he had always paid his bill within 30 days, it was highly likely that he would do it again after his European trip. He added, “Frankly, Mr. Smith, we don’t make any money off of you. There is no advantage to us to give you a $3,000 interest free loan. If you want to take your business elsewhere, feel free to do so.
[Actually, the company does make a few percent of of every sale, but most of that probably is applied to "overhead."]
My friend was and probably still is outraged. He went into one of his other savings accounts and brought cash with him to Europe. (This was in the days before debit cards where he could have deposited $4000 in a debit card account and used his own money).
Bringing cash probably cost him a lot in currency exchange fees, too.
February 3rd, 2007 at 3:15 pm
Ray - You are correct sir! The credit card companies call people who pay up their credit card in 30 days “dead beats”.
February 3rd, 2007 at 5:33 pm
I used to be a GREAT “customer”. I always made my payments on time, and always carried a balance. I STILL carry a balance, but it’s much lower and will be gone as of tax time. Thanks to a modest inheritance, I paid off all my debt but one card, which had only a few hundred dollars on it. Now I use the cards only if I have to, ie to pay for my broken-down car (the checking account is tight), and to make internet purchases such as the books for my class that I can’t just walk into a store and purchase directly.
I used to get calls from these companies citing my “great credit” and how they were goign to extend my purchasing power to $25,000! I told them, “If you keep doing this I’m not going to have good credit anymore!” LOL
I actually was always very responsible, but back when I lost my job and couldn’t afford my rent, everything else hit the card…food, entertainment - which was meager, but I had no other way to even go to a movie, I used it to fix my car that winter, must have spent nearly $1,000 just to keep that thing going. After all, I was unemployed: I couldn’t afford to get a different car. It was just awful.
It took me 10 years to dig out of that debt, having to add more as I went out of actual necessity in other things. Such is life.
We do all live paycheck to paycheck, and when that paycheck goes away, the usurers are always willing to “extend a helping hand”…right into bankruptcy for us.
NOW! Let’s talk about dealers such as “Car Hop” that sell broken-down cars with lots of mechanical problems on very limited warranties to people with no money, raise the cost of the car at least $2,000-$3,000 above market, and charge 24% interest rates.
I kid you not…so much of this kind of thing crosses my desk that every time I hear the name “Car Hop” my blood pressure rises.
February 3rd, 2007 at 7:16 pm
Yeah, I love it when people complain that their credit card purchase is declined. They’re like indignant because they feel it’s their money. Hello? It’s a loan and Visa can decline their purchase FOR ANY REASON THEY FEEL LIKE!
Credit cards are evil because they’re based on usury. However I don’t think having one is evil since in this society you pretty much have to have one esp if you’re married and need things like a car and home loan. It sucks. I’m very blessed to be able to get through life without one. ‘Course I’m single. (:
People are human and don’t we all just assume that the powers that be will take care of us. What goes around comes around I say. Least that’s been my experience.