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The Next Bubble Is on the Way: Credit Card Debt
Why Are We All Complicit in Our Own Economic Servitude?
Let me try a few words out on you: "Charge It," "Swipe It" and "Priceless."
You know exactly what I am talking about. We all have credit and debit cards. We all use them, and many of us keep our lives going because of them.
That is, until the bill becomes due.
The sad truth is that we are all complicit in our own economic servitude even if, at bottom, it's not our fault because we live in a consumption society, and don't feel we could live without them.
While many eyes are focusing on the housing meltdown and its hugely negative effect on an economy clearly moving into recession, few are paying attention to the next bubble expected to burst: credit cards. You would never know it by watching those slick VISA card ads on the Olympic TV broadcasts.
Combined with the subprime losses, such a credit card nightmare has the potential, experts say, of bringing down the entire financial system and global economy.
You and your credit card have become key players in the highly unstable financial crunch. Mortgage lender cupidity and bank credit card greed wedded to financial institution deregulation supported by both political parties, have been made manifestly worse by Bush administration support-the-rich policies. It has brought us to a brink not seen since just before the Great Depression.
While campaigning in Edinburg, Texas, in February, Barack Obama met with students at the University of Texas-Pan American. "Just be careful about those credit cards, all right? Don't eat out as much," he said. After the foreclosure crisis, he warned, "the credit cards are next in line."
The coupling of home equity debt and credit card debt has gone hand in glove for years. The homeowners at risk can no longer use their homes as ATM machines, thanks to their prior re-financings and equity loans, often used in the past to pay off their credit cards. Indeed, homeowners cashed out $1.2 trillion from their home equity from 2002 to 2007 to pay down credit card debts and to cover other costs of living, according to the public policy research organization Demos.
To compound the problem, fewer people are paying their credit card bills on time. And, to flip the old paradigm, more are using high-interest credit card cash to pay at least part of their mortgages instead of the other way around.
Younger people are being crushed by this debt burden as college students and new consumers. Emma Johnson of MSN Money reports that "Generation Y" is broke.
"The democratization of credit has really generated a competitive spending culture, and plastic has allowed for material goods not had in the previous generation," says Bob Manning, author of Credit Card Nation. "Most of us grew up in a home with just one or two bathrooms for the whole family, he points out; today, new homes usually have at least one bathroom per bedroom."That change has happened so fast," Manning says.
"This generation feels that somehow or another they're going to figure out some technological advancement that's going to get them out of their financial troubles and outsmart the market," says Manning, who served as adviser to the documentary In Debt We Trust. The documentary paints a picture of national financial crisis stemming from the personal-debt burden. (See InDebtWeTrust.com)
Happily, this issue is finally being addressed by Congress and the Federal Reserve Bank. When asked for comments, the public overloaded the Fed's website as the New York Times commented:
When the Federal Reserve asked for comments on its proposed rules on abusive credit card practices, an astonishing 56,000 poured in. Most were from outraged consumers. They told of interest rates skyrocketing when they paid an unrelated bill late. They complained of unwarranted late fees and pushed-up due dates. One Pennsylvania customer fumed: "I'm fed up with credit card company tricks that drive us deeper in debt."
This anguished deluge should send a clear message to leaders in Washington. The Federal Reserve should swiftly adopt its proposed rules against unfair or deceptive credit card practices. But the real burden to curb these abuses falls on Congress.
This discontent is being organized to press Congress to act by groups like the Consumer Federation of America and the Center for Responsible Lending. And Congress is listening:
WASHINGTON (Reuters) - Legislation aimed at curbing credit card billing practices that surprise borrowers with unexpected interest rate increases and fees was approved on Thursday by a U.S. House of Representatives committee.
The bill approved by Financial Services Committee mirrors Federal Reserve proposals that would effectively end double-cycle billing -- in which card companies reach back to prior billing cycles to help calculate the interest charged in the current cycle.
These reforms are a start but much more needs to be done because it's not just billing practices that is at issue -- it's high interest changes, deceptive marketing, and arbitrary rules. On top of that, there are other loans that need scrutiny including payday lenders and student loans. And of course our own addiction to shop until we drop.
Also, let us not forget that our credit card companies have been colonizing markets throughout the world. As the New York Times explained in a series on debt, "As the American blessing of credit cards became widespread, so did the American curse of debt."
Bear in mind the experience of another addicting industry -- tobacco. As they came under restraints in the US, they escalated their poison pushing worldwide.
Debt is a global issue and has to be treated as such.
Just as groups like NACA provide help to homeowners in distress, we need a major effort to help the victims of credit cards -- with practical assistance and political demands for regulation and relief.
News Dissector Danny Schechter made the film In Debt We Trust (InDebtWeTrust.com). His new book PLUNDER: Investigating Our Economic Calamity is out later this month from Cosimo. (Newsdissector.com/Plunder) Comments to dissector @mediachannel.org.
115 Comments so far
Show AllI read the headline and the article, and I have to reiterate what the Samson said in the 2nd comment: The author doesn't know what a "bubble" is. He seems to be using the term to mean a bad situation that grows worse until there's a catastrophic ending, but that's not what a bubble is.
An essential element of bubbles is an unsustainable rise in asset prices that is largely driven by speculation (e.g. dot-com stocks, real estate). That doesn't apply to credit cards at all. Credit cards are certainly a problem in the US, I agree with the author on that, but his argument would be more credible if he used financial terms correctly.
it seems jakenewton has nothing to contribute except refuting the facts in everyone's posting while offering no facts of his own.
very useful. thanks for joining in.
"Most of us grew up in a home with just one or two bathrooms for the whole family, he points out; today, new homes usually have at least one bathroom per bedroom."
Then the McMansions of today are already set up to be multi-family slum dwellings of the future.
The headline is very misleading. Either that or the author doesn't know what a 'bubble' is.
Yes, there are and have been many deceptive practices in credit card lending. Nothing new there.
But a bubble is a market that appears to be going up and is a money making opportunity for some in it at the right time. What we've seen in oil prices is a better example than this. As speculators moved money into the market, the prices rises. Which makes it look like a good opportunity for more people, so more money comes in and prices rise more.
The mistake with a 'bubble' is assuming that the rising prices will always continue. Thus people do stupid things like borrow money to buy assuming the prices will go up and cover the loan. This is what we saw in the stock market in the 90's, and the housing market in this decade.
I can't see where there's a 'credit card' bubble in any sense like this. This is just a combination of deceptive marketing practices combined with desperate people who are using their credit cards to put food on the table.
Yep, that's the future of the McMansion. Someday there will be a fair number of construction jobs both reconfiguring them to less than 4000 sq ft per family, and also to make them something kinda sorta like energy efficient.
Escuse me...these CC animals are the same ones who spent $40-$60 million on Congressional Bribes to get Chapter 7 eliminated so those lazy people who had health insurance who decide to get sick won't be able to discharge that $300000 medical debt or the CCs that went with it. The CC guys will kill for their swag, will you? Guess who wins?
How does one determine who was a "victim of credit cards" as opposed to who was just greedy and/or stupid? Should banks and lenders be held to account for any laws they may have broken? Absolutely. But should said lawbreaking excuse the majority of debtors who simply wanted more than they could afford? It's not like they It's not we haven't been warned about the costs of credit since, like, the day after it was invented...
We're "victims" of credit cards, "victims" of real estate financiers, "victims" of tobacco companies, "victims" of fast food and soda corporations... or we're a bunch of pathetic children unable to choose responsibly and accept all consequences...
When the credit-card bubble bursts, the mortgage crisis will be chump change by comparison. By then the people will have lost their houses and their cars. Since they don't have jobs that pay a living wage, their credit cards will soon max out because of penalties and usurious interest rates and they will stop paying on the mountain of debt that has accrued. Soon they will have nothing to lose; and when they have nothing to lose, the revolution will start. It's sooner than most people think.
Credit card companies are nasty swindlers, enticing with generous credit lines and phony monthly billing cycles. Once ensnared you find their billing cycle is far less than you thought. One late payment? zap, $35 late fee and increased interest charge, gotcha! and for many the debt just gets bigger, a vicious cycle. I have one card I only use when necessary and I pay it off immediately if I have to use it. I haven't paid a late fee nor interest in 15 years. They probably don't like me very much, they've yet to make a dime off me.
I fully agree that credit card companies have used predatory practices that have helped to drive people into debt. I also know that there are a lot of people who are using their credit cards out of necessity when there isn't enough income to make ends meet. However, there seems to be a lack of discussion on personal responsibility on this issue. We need to stop telling ourselves that it was the credit card companies and sub-prime lenders alone who got us into this mess, and encourage each other to make more responsible choices in the future.
Credit cards the next bubble? I had no idea that americans balance sheets are so over-extended.
another approach is to call your CC company, and just tell them you want a lower interest rate, or you will transfer your balance to their competitor, and cencel their card. Works like a charm....watch your rate drop from 19% to 9% overnight
"Swipe It" How apropos.
I have started to use those pictures of George Washington for all my purchases. Prying them from my clenched fist, one by one, has really restricted my impulse squandering. It can make quite a 'thud' on the counter when I need to refill the car.
One should always remember that credit card companies are legalized loan sharks who can charge "vig" once the borrower falls behind. Considering Dubya, Cheney, & Co. gave them a great gift when they revised the federal bankruptcy laws (persons are screwed while corporations can still stiff their lenders), it is not surprising that the actions of the Bush crime family will hang around like a food poisoning for a long time.
canuckchuck -
Yep. That works like a charm, until you realize that many big credit rating firms like Experian, Equifax, etc. treat your decision to close that high interest account (and take your business elsewhere to a lower interest competitor) as a red flag - a factor that will reflect adversely on your future credit score. Surprize!
Bill from Saginaw
CEH, Frank, thank you. You are so right. Surely there are some people who are totally mislead - but then again, how those people let themselves get duped is something they would have to tell you. Rebel, eh, I don't know - as long as you are using your card, you and millions of other fiscally responsible credit card holders provide both large volume and consistent payment, which makes the company valuable. They are very happy to service your credit needs, I am sure. Though I get the tongue in cheekness anyway.
Canuck - yep.
Anyway, other readers are right to question if this is a bubble. I could see it become something like a bubble. The idea of universally available credit is an incredibly positive development - yes, you can say, oh, but you're drawn into slavery or whatever corporate capitalism bad. But universal credit is like a profitable form of socialism.
Don't forget the changes to the bankruptcy laws in 2005, voted on by many Dems such as Joe Biden of Delaware, (where many CC corps have HQ's). Now an individual can't wipe out debt and start clean, but a federal bankruptcy judge will make you pay back that debt on "reduced payments" - ie: whatever the court thinks you can afford after bankruptcy. Funny how that 2005 bill didn't apply to corporations, who can still declare bankruptcy and clear their debt.
Which means the CC corps know that no matter what, they'll get back every penny of that debt, albeit over longer time spans. Nice security for them, eh? So they keep pushing credit lines, knowing that many are almost forced into using it, since pay scales are crap.
They saw this shitstorm coming, hence the 2005 laws were made.
As the story goes... Jesus threw the money LENDERS out of the temple, not the borrowers. "Usery" used to be a considered a subhuman enterprise now its called finance.
re CEH August 11th, 2008 2:27 pm:
"However, there seems to be a lack of discussion on personal responsibility on this issue. We need to stop telling ourselves that it was the credit card companies and sub-prime lenders alone who got us into this mess, and encourage each other to make more responsible choices in the future."
not to worry, the media will be chock-a-block full of stern lectures on personal responsibility. and when the inevitable public bailout follows, like a hangover follows a night of drunken debauchery, we'll get an earful about how we're paying to clean up our own mess.
bombarded as we are, 24/7, with hyper-consumption propaganda and visions of sugar-plums, how do you expect your gentle message of making responsible choices to be heard above the cacophony?
"Jesus threw the money LENDERS out of the temple"
I thought it was money CHANGERS. I could be wrong though.
""Usery" used to be a considered a subhuman enterprise now its called finance."
We should all just be able to borrow money for free, right?
Jake, Excuse the wrong spelling, its "usury", and I was referring to exorbitant rates and trickery as it has been practiced by many credit card companies.
Remember, the 'public bailout' will go to the banks issuing the cards.
We get the 'stern lectures on personal responsibility'.
Jake, excuse my wrong spelling, its "usury". In any case, I was referring to exorbitant interest rates, and trickery practiced by some credit card companies.
"We get the 'stern lectures on personal responsibility'."
Are you suggesting that many of those with huge CC balances were not irresponsible in racking it up?
re 4:02pm
are you suggesting that the billions of dollars spent on advertising are wasted?
"are you suggesting that the billions of dollars spent on advertising are wasted?"
Spent by credit card companies? No. The advertisements are designed to get you to obtain and use the card issued by a particular company. My original question remains.
The irresponsible behavior of the CC companies in encouraging (through advertising and credit card offers) consumer over extension is pretty obvious. Consumers I know thought the value of their houses was going to stay high and bail them out. Did you expect this contraction? Wall Street seemed surprised.
One example of consumer entrapment: a friend of mine had a line of credit from his CC at 9% which had $10,000 on it with no late payments. One fine month the CC company upped the rate to 25% with no warning. So this "responsible" consumer was suddenly in big trouble.
Credit Card Cos. are "The Boot On The Neck" of the "Reagonomics" philosophy.
"We should all just be able to borrow money for free, right?"
Well that depends on what you mean by free. We live in an inflation-based economy which necessarily creates a time-value to money. Money effectively doubles about every 10 years, so if I pay back the money in 10 years with no interest, I'm actually only paying back about half of what I borrowed.
Then there's the cost of labor, production, record-keeping etc. with granting, tracking and managing a loan and all related payments.
Then there's opportunity cost - if I loan you $10,000, then that's $10,000 I don't have in case another, maybe better, opportunity would come along.
Usury, in the sense of exorbitant interest may be immoral to some, but some entrepreneurs manage ROI in the hundreds of percent, and they aren't complaining about paying too much for the opportunity.
What needs to be focused on in this discussion is not the unwitting borrowers of credit but the private interests that reap the spoils. Some have tried to assert that a publicly owned bank wouldn't have to charge interest but that's not realistic. A healthy financial system should make profit and foster growth, and if the benefits from that were equitably cycled back for common good than the system could be balanced and few would complain.
The problem is not interest, it is that the system is being largely leveraged for the sake of a few private gains at the expense of the greater good - it's bass ackwards. All accountability to and responsibility for the common good has been successfully diminished to near oblivion. Until the majority of common folks figure the system out, expect more of the same.
We are seeing a credit crunch the likes of which hasn't been seen since just before the Big Crash of '29, and if we aren't careful about reining in the rampant greed and overspending on credit, then we're going to see yet another crash the likes of which is bound to be far worse than the one that plunged us into the Great Depression.
The warning signs are all there. If people don't heed them and do so soon, then we're in for a rude awakening when the Big Crash happens this time and it affects the entire global economy. You think that we've got a lot of warfare going on now? Just you wait - the fight for scarcer and scarcer resources is going to be far worse than we could imagine. Water will be the next resource we fight over, and it's already begun with the Great Lakes Pact to prevent the thirsty south and southwest United States from taking our Great Lakes water to slake their collective thirsts.
And that's just Round One of the fight for water. Of course, if the polar ice caps melt due to global warming and the ocean levels rise, then de-salination plants could be built up and down every coastline to provide water to the thirstier parts of the world, which could certainly help reduce the levels of the oceans, but I don't know by how much or whether it would even make a significant enough dent to prevent extreme flooding of low lying coastal areas.
But getting back to my original point, The Big Crash is coming. It's not a matter of "if", it's "when", and we'd all better be prepared when it happens. Maybe we can reconstitute the old FDR programs like the Civilian Conservation Corps, the Works Progress Administration and the Public Works Administration to help rebuilt our country's crumbling infrastructure and to rebuild and refit it to suit 21st century needs.
If FDR could do it, then why can't we, only on a 21st century scale and to address 21st century needs?
I lost my job due to a store closure. I received unemployment for a time while looking for work. When I did find a job it paid considerably less than what I made before and it wasn't long before I was using credit to pay bills and eat. That worked for a while until I was injured and couldn't work. Out of work again paying for medical and living bills the debt grew. Unfortunately when I was working again it was in construction and there were long periods of no work and no money coming in. The interest rates went through the roof and all the related charges started adding up. When money was coming in there was barely enough to live and pay bills and no chance of paying them down, just enough to keep them away. I own an 8 year old car that I paid off. I don't have a ton of clothes or electronics. I don't eat out and I don't go to the movies or out drinking. I don't have a drug habit and I live in a tiny apartment. about 2% of my total debt is frivolous spending and most of that was years ago. I don't want to walk away from this debt. I don't want my credit destroyed, but I won't play a rigged game. rates of 18-28% were unjustified and only made it impossible to pay.
So what choice do I have?
Actually, it IS possible to live without credit cards (unless you are unemployed and have NO other way to cover your expenses until you have an income again). You decide (and abide) that if you don't have the cash, you don't "need" the item. If you're traveling out of town, you can send the hotel a check that will clear your bank before you arrive instead of using a credit card to guarantee payment. You can use public transit in most cities rather than rent a car.
It is absolutely freeing and absolutely great NOT to receive those bills every month and, considering today's lack of financial services oversight, never know if the interest rate may have doubled.
The most profitable credit card customers are those who are the least able to pay back their debts.
Sound familiar? See "Maxed Out" , a documentary on business as usual.
The best thing we ever did is to live without frills and pay down our credit cards after we were finished raising and educating the kids. We were not into consumption, but basic things cost too much at certain times. If education and health care were paid for or reasonable, there would be fewer people in trouble. If we had a policy to provide housing at affordable prices, that would help too. (The post WWII GI bill was a model for that.)
There is a certain level of entrapment, but some people collude in their own downfall because they value excess. You cannot completely protect people from being idiots. You can have truth in advertising laws, but you cannot force people to pay attention. You can advise people to cut up the credit cards they get in the mail, to live wisely and buy what they need.
By the way, I wonder what rich people do in all those bathrooms.
revengegirl wrote: McMansions of today are set up to be multi-family slum dwellings of the future.
Reminds me of the scene from Doctor Zhivago. He comes home from WWI to find his family living in a small room of their McMansion now occupied by two dozen families.
The building commissar asks him what he thinks of the arrangement. "More just," Zhivago says.
sunset 827, sorry about your string of bad fortune. I hope your injury is healing. You seem to be a very strong person. Take care of yourself.
SallyUUKent August 11th, 2008 5:28 pm
Right now our unemployment rate is around 5%. In the crash it was around 18% to start and 25% at its peak.
We aren't that close are we? Financial problems yes. unfettered business causing problems, yes. A bunch of their ies were swallowed, yes. But we aren't close to a crash I'd say.
sun827 August 11th, 2008 5:34 pm
This advise I gave two friends trying to help them out of a similar problem. It worked for them, took a few years though. Doesn't mean it will work for you, but here goes.
1. cut the cost of your debt as much as possible. As Canuckchuck suggested, call them up and tell them you have a better offer on interest rates, but don't want to move, will they lower yours so you don't have to.
2. Look around for card offers that will give you better rates if you transfer your account.
3. Pick out the lowest balance you have or the one with the highest rate and concentate paying it off.
4. Try and consolidate your debt if you can in two or three accoubts to allow concentration of payment.
5.(this one only if its getting critical or for hospitals) Occasionally call one of them up and talk to them about a settlement of the debt. Or get a trusted friend to do it for you. you can use "I'm about to be forced into bankruptcy and I don't want to, is there any way I can settle this debt with a lump sum payment?"
6. Remember, all my advise is worth less than you paid for it. I'm sure some of the brighter people will have some better suggestions.
seditious said,
"Now an individual can't wipe out debt and start clean, but a federal bankruptcy judge will make you pay back that debt on "reduced payments" - ie: whatever the court thinks you can afford after bankruptcy. "
Actually, you can wipe out debt and start clean if you file Chapter 7. Certain items are listed as exempt (home and property, car, etc.). But it's true that the laws have been tipped in favor away from the debtor. And if you file bankruptcy and receive a discharge, your bills are gone (with the exception of student loans) but your credit is damaged for ten years. You start from scratch, but if you have to borrow any money (say, to purchase another car) it won't be easy.
RE: "They saw this shitstorm coming, hence the 2005 laws were made."
Can the 2005 laws be repealed, or modified with new laws, just like the 2005 law reformed the existing law?
If not I gotta tell you just to make ends meet with 2 kids and 1 paycheck I am but 1 paycheck away from the streets with thousands in credit card debt on top of 2 mortgages and a car loan. It'd be sweet to walk away from this shit... push comes to shove thats what I'd do. Womder how many others are like me? If enough of us walk at the same general time, heh I'd even take off in the car and just catch me if you can...
Cavedweller ("When they have nothing to lose, the revolution will start. It's sooner than most people think") Such a logical and refreshing sentiment. HOWEVER. Some of us have been predicting "when the revolution comes" for some time now. Plenty of serious reasons and plenty of Americans standing around staring into space at the proverbial cash register, with credit card in hand. GW Bush told us to go shopping after 9/11 and that's precisely what we did. Something will implode "sooner than most people think" but I doubt that it'll make any sense.
I had to laugh when I came across the phrase in the 4th paragraph: "it's not our fault".
Not our fault? Gee, I can't remember the last time someone MADE me use my credit card.
Let's face it: Americans have become dumb and dumber. Anyone using a credit card to pay for something that they can't afford deserves no sympathy. No one "deserves" a nice home, or a nice car or anything else. Get off your butts and work for it.
"Combined with the subprime losses, such a credit card nightmare has the potential, experts say, of bringing down the entire financial system and global economy."
Individual credit card defaults combined with corporate credit defaults, along with "credit default swaps", will undoubtedly bring down the entire global economy. We are looking at losses in the $$TRILLIONS and still don't know who is holding all this debt.
The $hit hasn't even begun to hit the fan!
We can thank Ronald Reagan and a corporate, kiss-ass Congress for Deregulation. We The People are now covering the losses of those corrupt, money-grubbing, risk-taking institutions that according to Congressional wisdom, "cannot fail".
Meister Eckehart, fantastic name. Can't wait to see what you will say.
Families are using credit cards for food, medicine, medical care, clothing, gas etc., because they have been screwed out of the money they deserve from productivity increases. Somewhere along the line companies stopped paying workers for productivity increases like they once did. Thanks to economists no one raised the issue. Now it's probably too late. Increasingly people are too broke to live today and credit cards are the first line of defense against hunger and the streets. Cards will be maxed out and there will be no money to pay the banks. Next people will be blamed for being poor. I know we're not in Kansas, but it doesn't seem we are in America anymore either.
RE: "Let's face it: Americans have become dumb and dumber. Anyone using a credit card to pay for something that they can't afford deserves no sympathy. No one "deserves" a nice home, or a nice car or anything else. Get off your butts and work for it."
You shouldn't be so judegmental, it makes you look closed minded.
I've worked my entire life since I was 15 years old.
To make ends meet I am forced to use credit cards for health care. Health care sucks in this country. I've paid for insurance my entire life and a lot of good that does when a loved one gets a chronic and lifelong sickness the insurance won't cover!
It is desperate out here and about to become something this country hasn't seen since the 1930's, and you blame the victims. How sweet.
Thomas More.
Your comparions of the Unemployment rate today to that of 60 years ago are invalid.
They changed the methodology.
Not only are "discouraged workers" not counted but they do a guesstimate on jobs created. They assume that if a person is long term unemployed, that he somehow created a job for himself and thus can be taken off the count and be marked as employed.
The US does not count discouraged workers, the long term unemployed, self employed Contracters, or transients (People whi lose a job and move out of state looking for a job are dropped from the rolls).
http://www.timesizing.com/2uedefns.htm
While an older article you should reveiw this as the labor department does have several grades as how they measure unemployed. It also points out differences in Canadas and Americas systems wherein if the US used our system the rates of unemployed would be higher.
The U3 is what is released to the public for consumption. U6 which is much broader shows that the U3 understates unemplyed by about 100 percent.
They pull the same type of thing with the deficit wherein they include the SS securitysurplus in with revenues and then borrow against it.
They do the same thing with the inflation rate which is likley twice the posted rate. This at the behst of Greenspan who suggested that the basket of goods methodology flawed because if the price of steak went up too much people would substitute with hamburger.
Be very wary of "official Government Stats"
pk
The blame the victims is old school.
During Th eirish Potato Famine, the landowners in Ireland were sending thousands of tons of food outside of Ireland to Britain and the Continent. This was mutton, butter and the like by the boatload simply because they could get a better price for it in Britain or on the Continent.
The irish were left to farm marginal lands as the more productive lands were closed off for raising sheep and the like.
The blight hits..the people starve. The Newspapers and peoples sitting around their dining room tables eating off their sterling silver, blame the Irish and claim they are lazy and stupid.
PK
Unemployment is about 4 or 5% higher than advertised. Inflation is also 4% or more higher than advertised. http://www.shadowstats.com/ has some free stats. They make a living telling subscribers the accurate financial statistics for investment purposes.
These numbers are more in line with my experience. Even being charitable the government numbers are calculated to make the 'correct' result, some of the not counted that are counted in other countries are the enormous number in the legal system, long term un or under employed and all those who are medically unemployed because nobody will hire someone with past health claims for a position with benefits. Hard for people over 50 to get good jobs too.
When interest rates were quite a bit higher, I remember my credit card interest rates being 18-20%. Whenever I got a little extra $, I'd pay one off, and have always kept debt to about $3500-4000. I take the highest card and get one of those NO INTEREST deals, and pay it off; but since I still find myself using credit cards (3), one inevitably goes up again. What bothers me is that now that banks pay less than 3% interest, it makes NO sense that the interest on most credit cards still remains in the 18-20% range.
I had a recent situation where I was heading out of town so sent the check early. It was posted on June 2. When I got back I saw they had counted that payment as one for May, even though that meant TWO were clearly posted for May. I rushed a 2nd June payment knowing these imbeciles play their little bureaucratic games, as if the rules must be followed to THEIR letter of the law. (Except for the very rich, these are hardly times where the customer is catered to, or "always right.") The 2nd check came in one day after the due date. I get the July bill with a $39 late fee, and the interest free offer rescinded. I called to speak to a rep figuring logic alone would dictate that since I'd made TWO payments in June, the penalties did NOT apply. But I managed to get some authoritarian type on the line who claimed she was a manager and she adamantly refused to give me credit! Or take off the late fee, etc.
I ended driving one hour to the bank the card was issued from and speaking to a reprentative. So apart from justifiable anger, I lost 2 hours of time and gas. I did get satisfaction, but as soon as my CD is mature at this bank, I am expunging ALL accounts with them. This is not the first time I have had problems with them. They bounced a check because they didn't clear it in time when they had 5 days to do so. I almost had a legal problem from this alone. You know that if YOU write a check, those necromaniacs will have made it theirs as soon as it was in their possession. This BS about waiting 5-10 business days to clear a US check is just another ridiculous protocol.
Bottom line--how DARE these banking institutions lose money when they pay us 2% or less, while bilking credit card users to the tune of 20% and more (fees/penalties)? What kind of odds are these. I believe in profit, fair profit, for a service; but this constitutes USURY. And the fact that BANKS were bailed out in this credit pyramid scam, rather than those positioned to lose their homes, is one of the most sickening outrages of our times. (In the category of finance. The other outrages like war without just cause, and the way those at the helm are surging full steam ahead towards the end of oil, rather than playing deliverer and showing the way towards alternative fuel sources, well, there are all kinds of scores for the HELL they've been working so assiduously to design for others).