Stretched consumers use credit as crutch

Stretched consumers use credit as crutch

There are 16 comments on the The Indianapolis Star story from Mar 2, 2008, titled Stretched consumers use credit as crutch. In it, The Indianapolis Star reports that:

With more necessities going on plastic, some choose to pay card bills before their mortgage Coast to Coast Imports Quality Luxury Imports only at Coast to Coast Imports Dreyer & Reinbold Infiniti Great Lease ...

Join the discussion below, or Read more at The Indianapolis Star.

Jake

Marysville, OH

#1 Mar 2, 2008
Everyone seems to think that the economy and government is responsible for this mess. The real culprit is individual desire for material stuff. We've been using credit cards to fulfill desires that simply cannot be fulfilled with material possessions. America is starting to resemble Rome. If you studied history, you'll recall that Rome ultimately collapsed. I recognize that there are certainly folks who are struggling to make ends meet and that's not whom I referring. It's to people who make money but overspend. That's a problem.
John

Scottsdale, AZ

#2 Mar 2, 2008
Let's see. They can't pay their mortgage, but they continue to pay their credit card bills so they can continue to charge food and gas (and pay some exorbitant interest rate in the process). Sounds to me like they're just delaying the inevitable. What happens when they have no more available credit? Bankruptcy? On thing's for sure, the economy is going to get worse before it gets better.

Maybe some of these people should be working on Plan B.
MBA

Dillon, CO

#3 Mar 2, 2008
The one aspect that Indiana government can control is the tax burden on the people. Indiana taxes have skyrocketed in te past few years and they are getting ready to take another big jump up. Indiana state and local governments (including out of control taxing authorities like schools) need to drastically curtail their spending and make some big time cuts in government spending. State spending caps on entities like schools would help.

Hoosiers need that money for food and gas, not taxes. Spending money on education doesn't help you any either if you can't get a job with it.
Matt Sullivan

United States

#4 Mar 2, 2008
Great article and very timely! I am a Financial Coach and we speak with clients everyday who have just simply lost hope. They want to make different decisions, but they do not have the tools to do it.

My wife and I went through financial ruin a few years ago. We almost lost our house and our credit was destroyed. I was, ironically, in the mortgage industry at the time and we had no place to turn. I became a Financial Coach because of our experience.
Matt Sullivan, CEO of Credit Dusters, Inc.
[email protected] m

http://creditdusters.wordpress.com
Serfs_Up

AOL

#5 Mar 2, 2008
Gee, Mike Robman (Marion County Treasurer) told us to take out home equity loans to pay our property taxes...

I guess folks can pay off their mortgages with their credit cards, then file bankruptcy?
Mike in Indy

Marysville, OH

#6 Mar 2, 2008
This current crisis was caused by the overuse of credit. Since 9/11 this economy has been fueled by the use of credit. People weren't making more
money they were borrowing it. When the housing slump hit banks had to tighten thing up or go under and so now people can't keep extending themselves so easily and beginning to feel the pain.

This economy has been artificially inflated due to overuse of credit and not from actual economic expansion the expansion was happening in Asia while we just continued to dig deeper and deeper holes for ourselves and feed the Asian economy.

The only thing that was helping was the construction boom which was over done by speculation and people wanting to make a quick buck just like the internet bubble of the late nineties. No one looked at fundamentals they just bought on momentum. That works just like a pyramid scheme and in the end that last guy is left holding an overvalued investment which in todays case is a piece of real estate.

This stimulus package is nothing more than window dressing to make us all feel like we got something for nothing. All they are doing is giving back to you what was already yours to begin with. Now take your checks and go be good Americans and buy Chinese products with it at Wal-mart. I myself will be paying bills with it.

Since: Mar 08

United States

#7 Mar 2, 2008
Mike,

WOW! I could not agree with you more and I could not have said it better myself. Great post, my friend.

Matt Sullivan, CEO of Credit Dusters
http://creditdusters.wordpress.com
Politics is Local

United States

#8 Mar 2, 2008
Mike in Indy wrote:
This current crisis was caused by the overuse of credit. Since 9/11 this economy has been fueled by the use of credit. People weren't making more
money they were borrowing it. When the housing slump hit banks had to tighten thing up or go under and so now people can't keep extending themselves so easily and beginning to feel the pain.
This economy has been artificially inflated due to overuse of credit and not from actual economic expansion the expansion was happening in Asia while we just continued to dig deeper and deeper holes for ourselves and feed the Asian economy.
The only thing that was helping was the construction boom which was over done by speculation and people wanting to make a quick buck just like the internet bubble of the late nineties. No one looked at fundamentals they just bought on momentum. That works just like a pyramid scheme and in the end that last guy is left holding an overvalued investment which in todays case is a piece of real estate.
This stimulus package is nothing more than window dressing to make us all feel like we got something for nothing. All they are doing is giving back to you what was already yours to begin with. Now take your checks and go be good Americans and buy Chinese products with it at Wal-mart. I myself will be paying bills with it.
Personally I don't think the Asian economy has much
to do with our pain. In many cases the sales of
product to Asia has saved US jobs. Think automotive.
Think tuition dollars of Asian students coming to
US colleges. You don't see the whole picture sir.
Brad in Indy

Indianapolis, IN

#9 Mar 2, 2008
There are at least two other, major factors which help explain this behavior by debtors.

First, lots of politicians are talking about special "mortgage relief" of some kind; but few are talking about special credit card, or car loan, "relief". So, just wait for the government bailout on the house.

Second, keeping a credit card going means continued buying right up to bankruptcy filing, after which the card debt "disappears" without losing the stuff bought. By contrast, the car and house usually are lost in the bankruptcy. So, fill the house and pantry by loading up those cards before filing bankruptcy.

In both cases, the debtor is just being a good, rational thief and/or cannibal - getting all they can for themselves and expecting to use government "process" to force others to pay for it all.
Urban Dictionary

United States

#10 Mar 2, 2008
Brad in Indy wrote:
There are at least two other, major factors which help explain this behavior by debtors.
First, lots of politicians are talking about special "mortgage relief" of some kind; but few are talking about special credit card, or car loan, "relief". So, just wait for the government bailout on the house.
Second, keeping a credit card going means continued buying right up to bankruptcy filing, after which the card debt "disappears" without losing the stuff bought. By contrast, the car and house usually are lost in the bankruptcy. So, fill the house and pantry by loading up those cards before filing bankruptcy.
In both cases, the debtor is just being a good, rational thief and/or cannibal - getting all they can for themselves and expecting to use government "process" to force others to pay for it all.
Many don't lose the house. Most who file bankruptcy
do it more than once. You are correct, it serves
them well.
Good Money after Bad

United States

#11 Mar 2, 2008
MBA wrote:
The one aspect that Indiana government can control is the tax burden on the people. Indiana taxes have skyrocketed in te past few years and they are getting ready to take another big jump up. Indiana state and local governments (including out of control taxing authorities like schools) need to drastically curtail their spending and make some big time cuts in government spending. State spending caps on entities like schools would help.
Hoosiers need that money for food and gas, not taxes. Spending money on education doesn't help you any either if you can't get a job with it.
Well said. Woosiers are operating under the delusion
that pouring money into education is the solution. Eventually
they will come to a reckoning and learn that w/o
high paying jobs, that loan for junior to attend
IvyTech or IUPUI was not a good investment. The
capable students will leave the state as they
have been. The vast expanse between educated
high income earners and all others is growing.
Going to Harvard/Yale/P'ton or such is a better
investment for it is now essentially free. Very
few Woosier children will get a ticket to the land of
good n plenty.
Basic Math

United States

#12 Mar 2, 2008
Jake wrote:
Everyone seems to think that the economy and government is responsible for this mess. The real culprit is individual desire for material stuff. We've been using credit cards to fulfill desires that simply cannot be fulfilled with material possessions. America is starting to resemble Rome. If you studied history, you'll recall that Rome ultimately collapsed. I recognize that there are certainly folks who are struggling to make ends meet and that's not whom I referring. It's to people who make money but overspend. That's a problem.
So you are equating moral bankruptcy to overspending? Is that your argument?
Free Will and credit cards are a match made in heaven.
I see most folks with credit problems as lacking
in basic math skill. Very similar to those who
buy lottery tickets. They begin the abuse in college
and carry it forward. They bought into the myth
that because they are educated they "deserve" to make
a large salary. Dream never materialized. Think
rolling car debt into next 7 year car loan. How much
sense does that make? This is not all of a credit
card making. US Auto loans are a big problem.
drew

Kenosha, WI

#13 Mar 2, 2008
people just neeed to take responsibility for their own actions.
Bill

Royal Oak, MI

#14 Mar 2, 2008
Credit is too easy to get. Americans are too lazy and have no self control. Our Federal Government has lost touch with reality. Seems like a good time to buy a farm, raise your own food, buy weapons to protect your family from Americans that have no clue of how to survive.

Since: Mar 08

United States

#15 Mar 2, 2008
Bill,

It is so weird that you said, "Buy a farm." - My wife said that last night. We get so frustrated with the way things are going right now in our country. Great post!

Matt Sullivan, CEO of Credit Dusters,
http://creditdusters.wordpress.com - The conversation is alive!
Grey

Honolulu, HI

#16 Mar 3, 2008
We have, over a half a century, created a culture of debt with our federal government as the prime example.It's strident and imperialistic vector is one that spends to mould the world without, before loking inward. The resolution will not occur until some cathartic event takes place, and it is still generations away. Our ever-growing indebtedness to other countries coupled with a population unwilling to perceive and give u the entitled comforts in their own lives is a formula for an eventual disaster.

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