Credit card socialism?

Chase got out of the Canadian credit card market. Everyone in Canada who had a Chase credit card - their debt is forgiven.

I loved this line:

Christine Langlois, of Montreal, told CBC she stopped making payments on her card five years ago.

A 24-year-old university student, she said: “It’s kind of like I’m being rewarded for my irresponsibility.”

Of course here in the States we have something similar. Rack up $10,000 in credit card debt, and you don’t have to pay it. You can negotiate it down to pennies on the dollar apparently. (And Fox radio stations aired those ads. “There’s something your credit card company doesn’t want you to know? IN debt? You don’t have to pay it!”

What are those advertisements, and company, teaching the youth of today? Certainly not financial responsibility.

It’s been around for decades…it’s called ‘CCCS’ (consumer credit counseling services).

There is also a huge downside to doing it…it’s a black mark on your credit for about 7-10 years.

There are certain types of people, who don’t care about their credit scores at all,who see this as an opportunity to buy $10,000 worth of stuff and not pay one red cent on their debt.

Loaning money is a risk, that’s why you have interest rates.

I’m surprised that you didn’t know that you could negotiate your credit card debt down from its level for pennies on the dollar. Did you know you can actually negotiate any debt for pennies on the dollar?

Credit cards are unsecured debt so once you rack it up you actually don’t have to pay it at all. They just won’t give you more debt.

I disagree.

Interest rates are so people/organizations with money can make yet more money from the people who have no money.

I am aware, thanks to these ads, that people with debts over $10,000 can refuse to pay what they owe and get away with it, but I don’t think it’s right,and it’s that that drives up interest rates for the rest of you.

(I say that because I don’t use credit cards. I’ve got 'em for emergencies, but I don’t use 'em.)

God I hate these condescending threads were anyone who is in a financial trouble are vilified.

You realize people from all walks of life act irresponsbily but they are not the majority.

In most states they can take you to court and get a garnishment of your wages to pay off the debt plus interst plus court costs.

1 Like

Mine are for emergencies and where you can’t pay cash/paypal/check. Latest toy I bought only way to get it was with a credit card. So I floated a loan for 10 days, paid it off with no interest and got my 1% cashback from the credit card company.

I predict This thread will degenerate in posters boasting about their financial prowess.

1 Like

Paying off your credit cards every month is just common sense.

Having more than $5,000 in savings when you retire is common sense, too, but apparently 33% of Americans don’t have that common sense.

I can’t find a link at the moment, and will look for it and post tomorrow, but I remember reading about some city that started giving financial classes to the poor. There was a great outcry from community leaders about how condescending/racist/sexist it was to tell the poor that if they’d do stuff like not drop out of school, not get pregnant before they got a good job, etc. etc. that would help alleviate poverty, so the classes were cancelled.

And so the poor stay poor.

Yes, but I’m talking about if you don’t want to pay them. You can find ways to avoid paying.

If you stop working and have no assets, they can’t throw you in jail.

1 Like

Is this sarcasm?

Well try and tell that to the working poor. Plenty of people in this country work their arses off to provide for their family, pay their bills, pay their mortgage, pay for kids to do extra curricular activities, pay for health insurance, contribute to a 401K etc and at the end of the month there just isnt anything left to put into savings.

One ER visit or an expensive car repair and guess what its on the credit card without the ability to pay it off in full.

If its one thing I detest about America its the demonization of those well off.

Next up someone will talk about the less wealthy having a flat screen TV or god forbid internet access.

As for community leaders criticizing financial education I call ■■■■■■■■ on that. You might have some extreme idiot who did that but no one with an ounce of sense would be against that.

You’re leaving money on the table if you don’t use credit cards…

Consider this - you can get a 2% cash back card from Citi, and let’s say your expenses are $20k/year. That’s $400/year extra if you just pay your balance every month that you can dump in an index fund.

If your 30 years from retirement, congratulations, you’re $37k richer!

I don’t think the “working poor” have mortgages, as they can’t afford houses, can they?

Anyone with a house they’re trying to buy is not in my definition poor.

I think this thread has gotten off track and we’re talking about two different segments of the ‘poor’ population.

I’m talking about those who game the system, just because they can.

And I hasten to add that it’s not only the poor - working or not - that do that. Plenty of “middle class folks” are stupid, too, for example buying a brand new car they can’t afford and saddling themselves with debt they don’t need when a used car would serve the purpose just as well. Or wealthy folks who go hog wild and buy jets and cars and houses and then go bankrupt because of a business downturn they weren’t prepared for.

That’s what’s got me puzzled. If that article is to be believed, only 1 in 3 Americans has more than $5,000 saved by the time they retire. What on earth do they spend their money on?

I guarantee you it happened, though I can’t find the link.

The community leaders - I think it was in Chicago - weren’t upset by the financial education aspect of it. They were upset because of the life advice - such as don’t get pregnant while you’re in school, don’t have multiple kids if you don’t have a job, stuff like that.

Edited - I still can’t find the link and give up. Dismiss the claim if you wish…

Ugh - I believe you, and it doesn’t surprise me to hear that.

This is different, but it’s an interesting debate in NC on requiring a standalone financial literacy class to graduate.

This is anecdotal and speculative, but…

  1. Many people at all income levels spend to achieve a standard of living commensurate with their desired social status.

Based on housing values in my neighborhood, I shouldn’t see a bright yellow Lotus and an S class Benz in my neighbors’ garages, but I do. Owning a rapidly depreciating asset that’s worth half your annual income seems like a bad decision to me.

  1. The change in child activities is also having an impact.

Free play has been replaced by organized costly activities - I’m sending $5k a year out the door for my 2 kids to do 2 hour long things a week. The pressure to be a good parent is a motivator to overspend for sure.

  1. Student loans/cost of education

No story needed

  1. Behavioral economics says we suck at delayed gratification.

If offered 2 snacks, a chocolate bar and an apple, people are way more likely to pick the chocolate bar today but if asked what they want tomorrow, they’ll opt for the apple.

Thankfully, with success of Thaler’s research and “Nudge”, more companies are automatically enrolling people in 401k plans (with an opt out option) and auto-escalating as a default.

Sharing a few anecdotes - small sample size - about why some people stay poor…

I read a message board populated by creative folks - music arrangers, musicians, playwrights (all small beer, no big stars from Hollywood!)

There’s one guy, in his 70s, lives in a tiny apartment in New York which I presume must be rent conttrolled. He shares his financial problems on a daily basis.

He doesn’t make enough money from pension and social security, so he still tries and tries and tries to find work in his field. But it’s intermittent.

He’s got three cats.

He got the first cat, and learned it had health issues, necessitating periodic visits to the vet which would wipe out any money he’d have left over from the end of the month. So of course, no saving anything that month for him.

So the guy goes out and gets another cat.

And this cat has a heart issue and needs to be on medication every month.

So yet more money he can’t save.

Then he went out and got another cat. (He’s in to rescuing cats from the local shelters who kill them otherwise.)

This one is apparently healthy, but not a week goes by that he isn’t taking the first cat to the vet…

Does the man - in financial difficulties as he is - have the right to have a cat to make him happy? Of course he does.

But why add on two more when you can’t afford the cat you’ve got?

Even out of work, they can get a judgement against you. Then every few years renew it in court so if and when you ever start working again, you get hit with it. And with the judgement hanging over your head, it shows up on your credit report, and other things and can make your life even more miserable.