May 20, 2009
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Credit Card Debt: The Options, Pt.1
The New Raw Deal.This series takes off from the primer found at Withering Debt. Please refer back for more background. Compounded with age-old habits and debt problems’ some new ones have arisen as of late. With the down-turn economy, our current credit card systems are being stressed to the max. As the fabric begins to unravel, we are encountering problems that only arise when both the credit card industry and the credit card consumers find themselves reeling in pain and resorting to more extreme measures. On the industry side, we’re seeing tactics designed to protect the issuing banks in the ‘bear arena’ of unprecedented default rates and unprecedented charge-off levels. These are coupled with loss of the securitization markets and being left ‘holding the anchovies’ of toxic assets.
The result of all this is an extreme devaluation on Wall Street and our credit card industry going under. So some of the brave new tactics that the credit card industry are employing are:
o Luring hapless credit card consumers (especially the young) with deceptions;
o Exercising hidden (or obscure) clauses to nail these hapless ones down the road ;
o Nailing upright credit card consumers in good standing just because they fit into a general profile of ‘bad apples’.The government is finally coming to the aid of the ‘hapless ones’ imposing stringent restrictions on how far the credit card issuing banks are allowed to go with these tactics.
In the other corner, weighing in by the millions, are credit card consumers in trouble. Nearly all of these extreme woes are the result of eight years of mishandling of government regulation where Mr. Bush purported the lie that “if we give all the money to the ‘super rich’, these CEO’s will give it back to the consumers in the form of good paying jobs for everyone who is diligent and works hard”. Perhaps it takes a rocket scientist to know that the ‘super rich’ got there by cutting good jobs (or shipping them to other countries) to save money and then hoard it all for themselves. Perhaps it takes a rocket scientist to understand that hoarding money does the same to an economy as draining blood does to the human body. Things start to suffer and die until there is a complete collapse. But, it certainly doesn’t take a rocket scientist to see the result. Way to go, ‘trickle-down’.