Are credit cards

[dretceterini]

to blame for a lot of the problems that exist today? I'm old enough to remember when credit cards were virtually non-existant, and if you wanted something, you had to be able to afford it. Sure, credit has always existed, but up until about 40 years ago, credit was a matter between two individuals; not between an individual and a corporation.

Thoughts please...

[TallahasseeGrannie]

1. Yes, I think they are

if you start using them in college and overspend you are doomed before you even have a job.

[kentuck]

2. I don't think it was even forty years ago....

I think it started on a large scale in the 1980's. That was the first time I ever made the mistake.

[HockeyMom]

3. Instead of credit cards,

we used to have lay-a-way plans. You wanted to buy something, then you would put so much money down and they would hold it for you while you made weekly payments until you had the purchase price. NO interest was charged with this.

I guess they stopped that because they were not making any money on it.

[sendero]

29. I think...

... it had less to do with stores not making money than it did with consumers deciding, in thoroughly American instant-gratification fashion, that they did not want to wait until they paid for the item to have it.

[TreasonousBastard]

54. Actually, they were making money on it...

they got your cash to use, and if you didn't finish paying for it in time, they sold it to someone else. They went to plastic simply from market forces-- pretty much everyone got plastic over the years.

The tradeoff with plastic is that they get less, because of the transaction cost, but they get faster inventory turnover and they don't have to keep their own records.

[hippiechick]

4. Yes, because the whole purpose behind them is

... to get people to buy shit they can't afford, and trap them in a cycle of trying to catch up - which rarely happens. Think of them as a lifetime loan, because it takes an Herculean effort to get out from under.

The financial institutions don't make their money on the principal you pay back, they make it on the interest, late fees, over limit fees, etc etc that they keep tacking on.

[McKenzie]

8. I'm with you on that one....

Massive credit works not only in the interest (sic) of the financial institutions it makes people "buy shit they can't afford, and trap them in a cycle of trying to catch up - which rarely happens". Yes, you are absolutely right...credit is just a grrrreat way of reeling 'em in.

Nothing like debt slavery to keep the people down and enrich the very few.

[AngryAmish]

24. I paid off my last credit card today

just bragging

[hippiechick]

34. Good for you !

:applause:

I refuse to have a credit card ... my checking account/debit card acts as a mastercard in places that don't take debit (not sure how that works) & keeps me from spending money I know I'll never have.

[ayeshahaqqiqa]

5. More a symptom than the disease

The disease being rampant materialism and the idea of having to have something right now instead of waiting for it. Like you, I'm old enough to remember when the only "credit" cards were charge cards for department stores, and then you had to pay off the entire bill at the end of the month. And it wasn't easy to get those charge cards, either. The value system then was you live within your means. If that meant saving to have enough money to buy something, you saved. If that meant fixing things, you had them fixed.

But things started changing in the late 60s, early 70s, I think. One gruop of people, concerned with conservation/saving the earth, kept the concept of living within one's means. But most fell for the media hype and started buying, buying, buying. Consumerism became a new religion, one based on what one purchased, not on anything else. To keep feeling goog about onesself, one had to buy more and more. Credit cards filled the gap between means and immediate gratification.

[Skittles]

13. yeah

WHY DO PEOPLE NEED SO MUCH F***ING SH** ????????????

[ayeshahaqqiqa]

44. I had a giveaway yesterday

I had some really good clothes from around the world, but I hadn't worn them in years. So I gave them to friends who I know really appreciate getting them.

[AndyTiedye]

17. It Didn't Pay to Save During the 70s

The interest wasn't enough to keep up with inflation.
If you tried to save several years for something,
the price would have doubled by the time you went to buy it.

Now, credit card rates are actually higher, while inflation is lower.
Credit cards have become a horrible way to borrow money.

I pay mine off each month.

[ayeshahaqqiqa]

43. That wasn't my experience

but then I had savings in the bank before the inflation hit. I lucked out in that I bought a car in '72 and didn't buy another for ten years (and then regretted the purchase). I also got locked into a mortgage just before inflation hit, so that helped. At the time, I had a good UNION job and my pay went up enough to keep up with things.

It was only after I got married that I didn't pay off my credit card each month. We finally got out from under that trap, and won't go back to it.

[noamnety]

6. You can't blame an inanimate object

I use a credit card, and pay the bill in full each month. I stopped using cash a few years back because I got fed up with ATM fees and stopped carrying an ATM Card - so I can only get cash if I go see an actual teller at the bank, which normally I would do about once or twice a year. However, if my husband and I were laid off and had to charge things to survive, of course we would.

So I'd say a lot of our problems are a combination of struggling to get by with less buying power, and successful marketing of the idea that you need to have name brand material things to be considered successful.

Not being able to afford the basic necessities = problem #1.

Being brainwashed into thinking you need luxuries (clothing, shoes, jewelry, cars, etc) that you can't afford is problem #2.

[nvliberal]

20. More nonsense, I'm afraid.

Problems with credit cards aren't due to failure in human morality and willpower but have more to do with job loss, divorce, hospital costs, you name it.

It's easy for you who have a more comfortable income to sit there and lecture others about how they should handle their money.

Your post reads like the banking industry's talking points.

[noamnety]

22. Huh?!!

Perhaps you missed what I said was problem #1 - inability to afford the basic necessities.

[sendero]

31. Bullsquat..

... tons of Americans with a household income of $80K are living like they make $150K.

We have a NEGATIVE SAVINGS RATE for god's sake. Tell me how that is caused by divorce and medical expenses...

[pitohui]

37. it's caused by inaccurate reporting

we have a negative savings rate because the real vehicles where modern people save money such as stock market mutual funds are not included in the savings rate

a traditional savings account pays around 0.5 percent annual interest at yr local bank, only a v. stupid person would save very much $$$ in such an acct

[sendero]

39. I save nearly..

.. all of my money in a Money Market account.

My defition of stupid is anyone who has a subsantial portion of their savings in stocks right now.

In any event, when Americans don't put any money in "savings" accounts, we have to get our out-of-control Federal deficit financed by the likes of China.

Anyone who thinks that is a good long-term plan might also be stupid.

[MISSDem]

48. A "very stupid person" will always keep $10,000 or so

in a very safe place, like a savings account. After that you invest.

[TreasonousBastard]

55. Actually, the largest single place for savings...

for many people is their home.

Which, after buying in a red-hot market, doesn't always give you much money left for other things. But, it does give you a lot of additional credit for buying stuff for the home.

BTW, after all of the transaction costs, how many funds or stock portfolios give you enough more than 5%, over, say 10 years, to make the risk worthwhile?

[MISSDem]

47. You can't blame the bankers for people's lack of

self control and person responsibility. Don't live beyond your means.

[FlashHarry]

7. Credit Cards can be useful

...if used wisely. Visa and Master Card are both dangerous, because they allow you to "pay over time." Beware. Some issuing banks are better than others. The new Consumer Reports has a story on this. (Interestingly, their top ten cards were all relatively obscure, except the Target Visa card, which is one of the better ones, apparently.)

However, certain store cards (which normally charge very high rates) offer no-interest promotions. I just paid off my iBook laptop and saved $350 in interest. I paid over time and it didn't cost me a penny to do it. I did the same with a washer and dryer. I use an American Express card for things such as groceries, because it's more secure, I get "points" for every dollar I spend, and I have to pay it off every month, thereby not accruing any interest.

[napi21]

14. I agree with you FlashHarry. I use my credit card for everything too.

I also pay it off every month. I remember when the only credit cards were department store cards, and the limits were $300-$500 MAX! Thinking about it now, it's pretty funny!

I remember when the co. I worked for had to sponsor MC cards for our auditors because they were new college grads and couldn't get oen on their own!

I started using my cc for everything about 5 years ago bcause it was a very easy way to keep track of where my mooney was being spent. Boy, how telling that year end statement is, huh?

I have to agree with the above poster in saying that too many people today have the "I need it NOW" phylosophy. I don't think anybody saves for anything anymore!

There seems to be another problem too. Many people "go shopping" just as a passtime! That give the perfect opportunity for marketing to sell you all kind of stuff you don't really need!

[The2ndWheel]

9. Pardon?

Corporations are individuals. There is no dividing line. They're just very large individuals who don't have to eat, sleep, or breathe.

That's where the blame should go. Like an earlier post said, the cards are a symptom of a much larger problem.

"if you wanted something, you had to be able to afford it."

See, there you go again with the utopia talk. You can't stop progess. So quit thinking, and buy more stuff to put in your closet with your credit card.

[DJ MEW]

10. Credit cards are evil....

The one thing about them that really bothers me is that using them doesn't really feel like you spent any money so their is no feeling of a spending limit with them. I know there is a limit on the card but you can't feel the limit like you can feel the lost bills from your wallet. It is just to easy to use it and too many people don't have the self control to stop.

Personally I have one credit card, I got it during the grand opening of a Guitar Center location for one of those no payments no interested for 1 year. I paid it off well before the year was up and haven't used it since. My parents don't used them, my boyfriend just recently cut his up too.

Get rid of them America they are destroying you one charge at a time.

[OneTwentyoNine]

23. Evil?? LOL,hardly.....

I guess that makes cars evil if you screw up and run over someone? Nothing "evil" about CC,its the people who use and abuse them.

To me a CC is fantastic and I carry balances all the time. Thing is I pay no interest because of my great credit rating,I pay on time every time,never filed bankruptcy,never stiffed a CC company. I pay zero interest and the CC company makes 2-3% from vendors I buy from. I get offers daily for a different card for another year of zero interest,in fact the card I have now expires its zero interest in January so I'll be switching again. Don't even have to mail it in,just do it on-line.

So..why do I like them? Simple,they are 100 times better on a trip than a fat wad of cash. They are 100 times better for purchases whether on-line or not than a check because you can refuse payment if you get truly stiffed by a vendor--try that with a common check and listen to your banker laugh at you. They are great in an emergency,some times you just need to use one. We've used offers from HD and Lowes for six months no interest when we remodeled the house. Those you have to be very prudent on or they can nail you for 22% if it isn't paid off in that period. We know how to use these offers and WE take advantage of the store,not the other way around.

I'm smart enough to know how to use just one and manage just one--notice I said just one,if you have several then your sliding down that slope. Hell,I'd gladly pay 1-2% interest but I get mine for free so no griping here.

[cassiepriam]

11. Credit cards don't run up debt, people do.

[nvliberal]

21. And deregulation of the credit card industry gave the industry an

excuse to go after people who were poor risks for credit, for they knew those people would be the most profitable for them.

[sendero]

32. That is a totally separate issue...

... from the FACT that Americans are abusing debt.

[niallmac]

12. Those who preach self control

seem not to mind that
credit card companies push credit to the proles like dope every week in mass mailings.

Media advertising insists only fools would pass up easy credit. Where did you ever hear credit cards were dangerous? You certainly didn't hear it in a commercial. We all know cigarettes and alcohol need to be used responsibly correct? So why the warnings on the packages?
Could it be that some folks recognize that the brazilians spent on promotion need some sort of balance as in warnings and public education?

I recieve two or three mailings a week of credit card offers and credit card blank
checks.

If our country really cared about personal debt we would first of all
spend a few hundred millions on public information/education campaigns about
credit 'schemes'.

Instead we allow our elected representatives to accept millions from MBNA and friends and my how our reps have become concerned about that nasty bankruptcy bill.

[FlashHarry]

15. I agree that their practices are predatory

Absolutely. And the fact that you can be late on one card and the others will jack up your rate is appalling and just plain wrong.

However, if used wisely, they can be beneficial.

[niallmac]

30. Oh I am not a saint.

The kids tuition came up last week and Mr Responsible here was caught short. I use the credit card for a month and in this case (two months advance 'oh god forgive me') of credit.

[drdtroit]

50. "I recieve two or three mailings a week of credit card offers ..."

That's why I own a good shredder! :)

[damntexdem]

16. And there was layaway.

You had first call on the goods, but your gratification was deferred until you paid for it. Credit cards are very convenient -- way too convenient. Debit cards are just as convenient, and not nearly as dangerous.

[pitohui]

38. the last time i heard of anyone using layaway...

this is a few yrs ago now, when a v. famous toy store went out of business on christmas day or the day after

people got their gifts all nicely wrapped out of layaway, got them home, unwrapped them on christmas day -- and the boxes were full of junk or just had broken pieces in them

i don't know if this only happened in the greater new orleans area or if it was a nationwide thing

in any case a lot of kids around here should had their xmas spoiled over it

layaway is stupid -- they have the item AND they have some of your money, you have a slip of paper

credit cards are much, much better

[catmother]

18. credit cards

i remember lay away too. i use credit cards for everything. i pay them off every month so i don't pay interest and i get cash back for using them. there was a time when interest (credit card and auto) were tax deductible so it wasn't too bad, but now most people are in debt way over their heads. we don't even finance our cars anymore. we drive them for a long time and when we get a new one we pay cash. the only interest we pay is on our mortgage and my husband is bugging me to get that paid off.

ben stein says if you want to live well in your retirement, you have to live under your means before that.

[nvliberal]

19. Deregulation of the credit card industry happened in around 1982.

Before that time the cards were difficult to get. Thereafter, it became way too easy, but they were and remain very profitable for the banking/credit card industry.

The problems began with deregulation.

[AirmensMom]

25. It was more recent than that.

When we were married 29 years ago, we had no credit cards and couldn't get any. We had a baby a year later, with no insurance, and had to sign a paper to pay a little bit to the hospital every month. We also had school loans to pay. We were making $50/week before taxes. Our first credit card, a gasoline card, came about 5 years later and it had a very low balance. I don't think we had a Visa card until the late 80s. I can remember saving money from giving piano lessons so I could buy Sesame Street sheets for my girls' beds. We had to buy the beds from a second-hand furniture store ... how gross is that!

My kids got credit cards almost as soon as they turned 18. One of them got overextended and had to take out a loan to pay them all off. She never did that again! I think it's easy for kids to get dazzled by all the stuff they want to buy and the credit card gives them the power to do it.

Not that I'm blaming the cards ... they just make it easier for people to get into trouble. They can also help if you're in a tight spot and need to get your car fixed.

That's my .02 worth.

[OneTwentyoNine]

28. One thing.....

I don't think CC companies should be allowed to roam around college campus's and peddle their wares. They were doing a lot of that around here but I can't remember if a law was passed or the College themselves stopped the practice.

[AirmensMom]

33. I agree -- they shouldn't be allowed to do that.

My kids got theirs before they went to college ... already too late.

[MISSDem]

49. When you are in a tight spot and need to get you car fixed

that's when you are happy that you are that "stupid person" who has an emergency fund stuck in a plain, vanilla savings account.

[ThomWV]

26. Well - I'm About 60

And back in the day, when savings accounts paid 3% and mortgages cost 5%, with bank profit being the difference, credit cards were essentially non existant. There was certainly no Visa or MasterCard. American Express was always out there it seemed, but no common man with a job had one.

I do not know when the usury laws began to crumble but they certainly are long gone now.

Are credit cards evil? Well, there is no such thing as evil for people who have given up on the toothfairy and in that sense they are not but to anyone who has ever found themself depending on that self-loan or ran up a bill for junk they soon realized they had no need for it might be a different story. I know the happiest day of my life was when I cut them up and burned the halfs.

[sendero]

27. Not credit cards per se..

.... but consumer debt in general. Debt is like any tool - you can use it to do good things, or you can abuse it.

Americans by and large are abusing debt. Folks are spending money they do not have, some because they have to have the cars, clothes other status items to keep up with the Joneses, others because their income is so low they have to use debt to survive.

Add to that the fact that the Federal debt is literally ballooning, that our country's very economy is now utterly dependent on foreign funding, and you have a brew that can only end in hardship, if not outright disaster.

[pitohui]

35. i don't quite see how

you may remember credit being between 2 individuals but you mis-remember, of course credit was between you, the less powerful person, and your bank, if you could get a loan at all

if you were black or a single female, you could likely forget abt getting credit

the days of credit being available only for the wealthy white male are days best left to the dead past

credit cards, used wisely, are a private form of getting credit, i can buy what i like & make my own choices w.out a snoopy judgmental bigoted banker deciding what i can & cannot buy

like any powerful tool credit cards can be mis-used but they are a life saver in an emergency

[dretceterini]

41. No, I was taking about much earlier than that

Circa 1930 and before, some store owners gave customers credit for short periods of time, if they knew them and trusted them.

You are right about the situation after regarding what became corportations giving credit to individuals, which I think first started getting bad in the 1950s, and has gradually gotten much worse...to the point better than 1/2 the population could not survive without them...

[GOPNotForMe]

36. Your proposal removes personal responsibility from the equation.

Credit card companies certainly are deplorable in their tactics to get more money out of people, but your proposal removes human responsibility from the equation. I'd say somewhere between credit cards' existence and our relatively recent "now now now" spending philosophy is your true culprit.

[dretceterini]

42. Personal responsibility

is one thing, but offering credit to those who are in sitautions that paying back the debt if virtually impossible is quite another. I have even been told by people I considered friends that "you are uselesss unless you can be used". I think the vast majority has that kind of attitude.

[IronLionZion]

40. Some cards offer up to 10% cash back on groceries and gas

Capital One and Discover have cash back plans. You can win if you pay your bill in full each month. Credit Card companies hate people like me because we cost them money. The only time HSBC ever made a cent off of me is when they mistakenly (purposely?...) canceled my card and didn't send my bill to me until I requested it. That forced me to pay late fees, finance charges, sign up for online banking and get a debit card.

I realize that not everyone is able to do this, but credit cards are not the best answer.

Sometimes a consumer loan from a bank will give you a better rate for big purchases.

But whatever you do, AVOID Paypal if you can. There's a reason they have so many lawsuits against them. It's because they are not a bank and don't have to obey any banking laws.

[greygandalf]

52. which cards are 10% back

right now I get 5% back on the above things

[trof]

45. A short history of credit in my lifetime:

I'm 64.

My first memory of credit was taking my granny's shopping list to our neighborhood grocery. It wasn't a chain. It was called "Vincent's", because the guy who owned it was Vincent.

I'd hand the list to Vincent, or one of his two clerks, and they'd go up and down the aisle, filling the list, while I waited at the front counter. Grocery stores were not "self-service" back then.

I'd carry the groceries back home, along with a hand written receipt for the amount. At the end of the month, Vincent would send granny a bill for that month's purchases. She'd carefully compare it to her receipts and, if it appeared to be accurate, send me with a check the next time I went for groceries.

The two big downtown department store had a similar arrangement. You could open a charge account, sign for purchases, and get a monthly bill. Later they issued little metal Charge-A-Plates with your name, address, and account number on them. This eliminated the need for hand writing this info on your receipt and speeded transactions up quite a bit.

This was, of course, the forerunner of the credit card. The first credit card that could be used at more than one business was the Diner's Club Card. There's an interesting history here:
http://history1900s.about.com/od/1950s/a/firstcreditcard.htm

[MISSDem]

53. I remember something similar. My Daddy farmed and

so he and Mother paid their bill at the grocery store once a year. If memory serves me, they paid no interest.

[1932]

46. I think consumer credit is the modern equivalent of the WPA.

And I don't mean that in a good way.

For Keynes and FDR, when the poor had no money, they had to figure out ways to get them employed so that they could get money. Aggregate demand was created by putting people to work. The good effects percolated up to everyone, including businesses sellling them things.

Today, people have low wages and many are underemployed or unemployed. Why don't we try to improve the economy today by making things better for people at the bottom? Because everyone's putting everything on their credit card. People are borrowing to pay for the consumption that is keeping businesses in business.

The big difference is that when you put people to work and reward them for their labor, you're making something real. You're building for the future. You're making sure that people down the line will be able to work productively. And work -- creating things -- is the foundation for everything important and valuable.

Sustaining society on non-productive debt rather than work is going to make America weaker going forward.

[greygandalf]

51. I can't believe all the Yes votes

I can control myself and I like the convience of a credit card. Why can't others?

Great if DU was in power, credit cards would not exist.