February 4,2009
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Brave New CC World, Pt.3
– Blueprint for a more happy future.Lessoned learned...minimum building codes. How much to lend and how much risk is prudent? Now we know. Not just the credit card lending industry but, the credit card consumer market, as well. In business, when liability exceeds assets (including investment capital), conditions can become dire. When that minimum finance charge (which was designed to last forever) exceeds available resources for a credit card consumer, conditions can become dire just as easily.
The ‘perception' that all was ‘OK' over the last eight years came back to bite us. With what we know now (and should have always known), ‘perception' can be tenuous. We should know not to ‘bet the farm' in a poker game. New and aggressive risk should be limited to what the ‘risk reservoir' can cover. Be, at least, as intelligent as the squirrels and store acorns during the good season. Consumers have backed way off from whimsical credit card debt. Lenders are evaluating risk prudently. These are both very good. Watch the new world grow and be a builder. Happier times are coming.
Bottom line for America (and the world, for that matter), take a lesson from the Pink Floyde: When you see that ‘wall', whether it be the Berlin Wall, Wall Street or the ‘walls' that develop in our personal relationships, and a ‘mad bugger' says to us "Trust me but, don't examine my agenda", be concerned, very concerned. When a world leader tells us "Just go shopping, that will fix our economy," and we're facing impending job loss, be very prudent with credit cards. It's very important for our lending industry to shore up their health and the bailouts are critical to that end.
Our credit is not being cut off like the power company might do with our lights. The credit card industry will become more healthy and fair (due to regulations) in the future.