December 10,2008

• How Did We Get So Plastic?, Pt. 2  –
   – Spinning out of control into a wall.

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  By the time the ‘90s rolled around, credit cards had already become a way of life to millions. So the time was sweet for expansion to multiple credit cards per person with lower interest and easy qualifications. Americans increasingly found contentment to supplement credit for cash when cash was low, especially the unemployed. Spending habits remained the same even though the cash wasn't there anymore. While the husband was busily working three low-paying jobs, the wife was busily shopping for the childrens' clothes at mall prices on credit cards.

  With the exploding proliferation of the Internet after 2000, credit card usage practicality exploded with it. Credit card lenders were on top of the game. Mass mailings were received at a rate of two to three offers a day for millions of Americans. Bad credit ratings were no longer a barrier because innovative financing had tied home equity to security. Refinancing became so common that people were embarrassed if they had to admit they weren't doing it also. Zero interest credit cards were in abundant supply from so many new lenders, it became difficult to name them all.

  Jumping up to where we're at now, we face some new challenges. The culmination, of course, had to end at the other extreme end. Now, many Americans find themselves maxed-out in debt. So many years of low pay during the Bush reign have left us victims of debt ignorance. The all-so- aggressive credit card industry is not so aggressive any more. We've learned so many bad habits that we have to start over and re-learn good habits.

  While the credit card industry wrestles with it's own $45 billion bad debt load, our economy's life-blood, working Americans, wrestle with having to reduce spending to their lowered means. This is the first time our nation has faced unprecedented debt load coupled with extremely bad unemployment which promises to get much worse over the next year. This ‘perfect storm' does not suggest a positive ‘spin'.

  Continued...
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