Credit Cards

 At first read I thought to elf that this is the most surprising story about credit cards and the use of that credit, that I have ever read. I’m not 100% sure, I’d have to think on that for a while. I am not surprised that this is happening however, there are many factors that make this make sense. The rising cost of gas and such, the need for that plastic to get a lot of people thought the day. I mean, how else are you going to get your gas and coffee, and it appears that at least for many Americans, the addiction to gas and coffee is coming before their mortgage payments.

The addiction to credit cards and the ease of putting off payment has taken presidence over equity in your home, people are giving up on their castles to keep food on the table and gas in the car. This completely blows me away. It’s happening, a lot. This is real.

I had imagined years ago how a rich elite could get many Americans spending in debt and then come through and on a massive almosgt wholesale level buy out the homes of many people when they start to have massive defaults on payments. It would be pretty easy for some rich players to conspire to do just this. Howhard would it be to get everyone used to making somney and spending a certain amount, aqnd then come in and squeeze everyone with higher prices for neccesities, while taking out jobs on a large scale. Cities like Detroit certainly have been a victim of this kind of corporate manipulation.

Anyways, enough of mindless rant here, at least we are given the power to choose to get ourselves into this debt situation, and in a way I am kind of happy that many people are rejected the standard “pay your house before anything else”. If there are enough mortgage loan defaults, all that property that those rich people get will really be worthless.

The story that started this early morning rant:

From the Tennessean Newspaper:

Americans load up credit cards to keep heads above water

By KATHY CHU • USA Today • February 29, 2008

Seven years in the credit-counseling business didn’t prepare Ann Estes for the alarming trend she began noticing last fall. As her clients’ mortgage bills became unaffordable, many began paying their credit card bills before - and sometimes instead of - their mortgages.

“We’ve never seen anything like this,” said Estes, who counsels clients by phone from her office in Richmond, Va. “Their homes are at risk, and they know it. But people say, ‘I don’t want to let my credit cards go because that’s my cash flow.’ ”
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Across the nation, credit counselors are reporting the same thing. Credit bureau analyses of consumer payment data show that financially squeezed borrowers increasingly are paying their credit card and car bills before their mortgages.
Trend shows desperation

That’s a striking reversal from the norm that reflects rising desperation among consumers. It suggests that some essentially have given up trying to stay current with mortgages, and instead are focused on using credit cards to squeak by.

If the trend persists, many economists say, it could accelerate mortgage losses and further drag down the economy.

Rising living costs, along with cheap and plentiful credit, have led consumers to rely more on plastic to pay for necessities they can’t live without - and luxuries they don’t want to do without. But as the economy weakens, consumers are starting to spend less on discretionary items, such as furniture and electronics, and more on things such as groceries and gas, according to government data. Such items increasingly are showing up on credit card bills.

“Everything’s going up - dairy, gas, home taxes,” says Christie Carlson, 34, a single mother of five children, ages 5 to 14, in Tomah, Wis., who has $20,000 in credit card debt. “I’m trying to pay more for everything in cash, but it’s just impossible. It’s not feasible right now to stop spending on the credit card.”

During the past year, credit card debt has ballooned most rapidly in parts of the nation where the economy is particularly weak, including California, Florida, Arizona and Nevada, says Mark Zandi, chief economist for Moody’s Economy.com.

“That suggests that people are turning to their cards in times of financial need,” Zandi says.

Magnifying the problem has been the shrinking availability of a major alternative to credit cards: home equity loans. As home values have sunk, homeowners have found it tougher to qualify for such loans. So they’ve turned elsewhere, especially to credit cards, to cover daily expenses.

When consumers are “pushed to the wall” and forced to choose between paying the mortgage or credit card bill, James Chessen, chief economist at the American Bankers Association, says that those in danger of losing their homes may choose their credit cards because “they still need to heat their homes, put food on their tables and fill their cars with gas.”

“A lot of people are exhibiting a kind of fatalistic behavior to their mortgages,” says Douglas Hammond, outreach programs director at Alliance Credit Counseling. “They can’t make their mortgage payment, so why (try to) make it at all? ‘Let’s keep my car, make my payment on my credit card, so I have some way of feeding my family.’ “

When I read this headline in my rss feed reader I was like wow, I can believe it, and the fact that the article goes into some of the other issues that people are facing, this shit is serious! Especially when the economy is taking a tough punch right now and mortgages are becoming issues, the new bankruptcy laws that were lobbied by the credit card industry - many people in this country are facing serious life issues with nothing but total and complete loss of everything - what is really going on people?

Discover’s Debt Collectors’ Threats Drive Woman To Suicide!

Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy. One of the things debt collection leads to that is missing to the FDCPA’s introduction is this: suicide.

Read more and the interesting comments at digg click here.

Also read the recent news story about congress looking into credit card companies policies and asking for changes in some areas - at least some of the news is getting the tip of the iceberg out a little bit with these harsh business practices that credit card companies have been using and getting away with.

Everyone wants one of everyone owes on one credit cards are becoming the way of life for many people around the world. With so many credit card companies out there we wanted to starta  blog about each one so people could understand and read more about the benefits and problems with credit cards. And also have a easy guide on how to start and keep good credit. Some of the cards we plan to feature here are Visa Master card Discover Novus American Express and  many others including pre piad cards and credit cards for children.