March 4, 2009
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News: Lose the Risk; Even if it's Customers.
Call it the ‘Graceful Parachute', if you will. It's a fact: Credit card lending institutions simply can't continue writing off debt (‘charge-offs') and stay in business. Lenders like AMEX are being ‘gracious' enough to reward us with $300 in cash if we're dangerously over-extended. If we owe as much as $15,000 to $20,000 in credit card debt, AMEX will pay us to pay off the debt and close the account. Statistically, we're hanging ‘way out there'. Take it, it's a good deal. If the average consumer credit card debt in this country is $8,000, that means that many of us owe nothing and many others owe $16,000 (and, "yes" I do understand the difference between ‘median'', ‘mean', ‘std. dev' and all that).
There are many among us who have racked up credit card debt unwisely. Oblivious to millions of Americans, the impending job loss crises has been written on the wall ever since Bush was elected (Read the news papers from November of 1999 if you don't believe me. It's all there). Still, a problem as massive as this legendary crisis took time in building as the tsunami welled up from way offshore. Most people believed their jobs would always be secure (blind faith without evidence is so stupid and damaging). At our President's request, we went out shopping while we didn't have the cash, using credit cards. Of course, this is the basic premise of credit cards in the first place but it can only be qualified with sound judgment. How can an entire nation be so bamboozled?
Well now we must deal with the aftermath and it can get pretty ugly. Many who still have good-paying jobs be warned: "And this too, shall pass." Pay off that huge debt, even if it takes credit card counseling to do it. Read my article series on the family saddled in $40,000 of debt who have overcome and how they did it, in the article "The Miracle of Credit Card Counseling".