Have you run up your credit card on a shopping spree, now feeling the squeeze because you can’t pay the minimum balance? It’s all the economy’s fault, according to the December 26 “NBC Nightly News.”
NBC senior investigative correspondent Lisa Myers reported on mounting credit card debt, but presented borrowers as victims of credit card companies and a struggling economy.
Why have American households accumulated almost $10,000 in credit card debt on average – 64 percent more than a decade ago? And why have “seriously delinquent” accounts – late at least 90 days – increased 50 percent over a year ago along with an 18-percent increase in defaults?
According to Myers, “Experts blame fallout from the subprime mortgage crisis and increased unemployment and warn of broader economic consequences.”
“Increased unemployment”? Unemployment has risen only 0.3 percent since March and is still relatively low, at 4.7 percent for November, according to USA Today.
The December 17 Wall Street Journal had a different take. WSJ reporter Sudeep Reddy pointed out that although unemployment has increased slightly, a rise in layoffs that would signal an economic slowdown or recession – one that might cause credit card delinquencies to soar – has not occurred.
“The job market is signaling a modest slowdown in hiring but not a sharp increase in layoffs,” Reddy wrote. “While jobs continue to bleed from the housing and finance sectors, growth in service jobs remains robust and most other sectors remain afloat.”
“Nightly News” didn’t accuse borrowers of irresponsible spending, but it did fault lenders for raising interest rates in cases where risk is considered higher, because borrowers are unable to make payments on other debt.
“Once consumers get into a hole, lenders – credit card companies included – will slap on fees and have other policies that just dig the consumer in deeper and deeper,” Kathleen Day, from the Center for Responsible Lending, told “Nightly News.”
No lenders were represented in the NBC report, and the borrower interviewed was treated as a victim of circumstance.
Editor at Large
Comments Policy
More victims
December 27, 2007 - 18:04 ET by DontabMsm just doesn't get it, we just don't want to play their victim game. We refuse to participate !
I intend to email Lisa Myers
December 27, 2007 - 18:05 ET by Sonny LykosI intend to email Lisa Myers and ask her which SOBs forced these poor people to make so many purchases on their credit cards. Did they use a gun or knife, in which case they can be prosecuted.
Heaven forbid....
December 28, 2007 - 09:22 ET by motherbeltthat people should be held responsible for their own (spending) actions! And curse that economy that doesn't allow people to live in the manner to which they have become accustomed! I mean, why should someone have to change his buying habits just because he got laid off!
“Nightly News” didn’t accuse borrowers of irresponsible spending,[of course not!] but it did fault lenders for raising interest rates in cases where risk is considered higher, because borrowers are unable to make payments on other debt. (emphasis added)
Well that's just wrong!!They should know that if people are havingtrouble with other debts, they need a break on their credit card interest, not higher rates!!
And curse those credit card companies that slap on fees for late payments!! They should know that if people don't pay on time, it's because they can't, so they should just leave them alone!!!
<sarc off>
All this is such BS.
December 27, 2007 - 18:13 ET by GregEAll this is such BS. American's don't save, and don't know how to save, because as a whole that concept is GONE from schools, from parenting (if parents don't know how, they can't teach how), etc etc. We've been under the 5% "full employment" status for years. Once again the MSM are idiots.
Americans don't save money because we're a "have to have it, and have it now, no matter what it costs" society. Financing is king. Used to be that being able to afford something meant you could pay for it outright. Now it means you can pay the monthly payments. Both ways you certainly can spend all you have, but with financing, you can spend even what you don't have.
It's this mentality that will drive the United States into the inevitable nanny-state. Politicians will stand up saying people can't afford this or that, yet in reality, people prioritize wrongly, and therefore can't afford necessary things, by virtue of their own doing. Everyone? No of course not, but I hear people say all the time how they can't afford something of necessity, yet they sure as heck have no problem putting a boat in the driveway, buying a new car every 3 years, going out to eat 3 times a week, buying this, buying that, blah blah blah. It's rediculous and is going to bring us a true nanny-state. We already have many pieces of that nanny-state now, and those of us who ARE cognizant of saving and spending and the value of EARNED money will be paying for those who chose all their lives to live for the now, while those of us who thought ahead did without the extras, all to get screwed later anyway by politicians who will distribute our money from us into the hands of those who chose have all the goodies regardless if it meant having little or nothing later.
Where's my freakin duct tape?
Greg, you are so right on.
December 27, 2007 - 18:32 ET by Sonny LykosGreg, you are so right on. I live in Naples, FL, one of the most expensive places to live. As a semiretired remodeler I often serve little old ladies who constantly complain about not being able to afford this or that. At 65 I'm too old for that crap talk, and simply ask then why they are living in Naples. And why are they driving a new Cadillac, and gong out for lunch AND dinner each day.
I just can't handle deceiving, lying, greedy, whiners any more.
I'm curious. When you
December 27, 2007 - 21:58 ET by GregEI'm curious. When you respond to their whining, which they don't expect at all to happen, what do they say?
Usually they say nothing, or
December 28, 2007 - 01:37 ET by Sonny LykosUsually they say nothing, or I get a "Hurrumph!" as they walk away.
I've lost a few customers that way, but I don't care. As I stated, I'm tired of it, and them.
Good for you. Sorry that
December 29, 2007 - 00:50 ET by GregEGood for you. Sorry that you lose customers over it. I guess they can't take the truth so they get rid of the source that's pointing it out to them. Funny that they don't even realize how badly their contradicting themselves when they say they can't afford something while owning a bunch of goodies. That's a sure sign of not understanding that money doesn't grow on trees.
My Sentiments Exactly
December 28, 2007 - 01:55 ET by UnsaneYou da MAN!!! The times haven't been too kind to Unsane for awhile now, but since I have these things called savings accounts, I can ride out the storm until something better comes along!!!
Does ANYONE know what a savings account is anymore, or how they work???
Res tantum valet quantum vendi potest.
I watched some television
December 27, 2007 - 18:40 ET by doug1950I watched some television the day after Christmas and the big story was about the "next day" shoppers and how the stores were crowded. They were saying that many people were buying big ticket items like big screen TVs, etc. I immediately wondered how many of the buyers were the very same people who complain that they can not afford medical insurance. We already know that a large part of the numbers are young people who are not thinking about medical insurance for the very reasons you stated...got to have it now. Thousands of people camped out to buy the new IPhones from Apple. Obviously these people must not have had jobs otherwise they should have been at work the next day not camping out on the Phone store's door steps. This same people found out....hell, its just another phone! Same thing applies to the folks who bought houses they could not afford and are now going into foreclosure and wanting the Fed gov't to bail them out. When will we ever learn?
Credit Card Debt: More
December 27, 2007 - 18:29 ET by Chris NormanCredit Card Debt: More Victims, Because of (Insert favorite liberal blame here)?
Choices A - Z: Bush and Republicans
Personal responsibility is
December 27, 2007 - 18:43 ET by bigtimerPersonal responsibility is completely out the window if you are a cry-baby whining leftist.
I am sick of this.
You had better read what you sign and agree to.
Meaning YOU the person who signs...no matter what it is!
Btw...One of my credit card companies that I have been with for years raised my interest rates in the last month, almost doubled the rate, I called, complained, if not adjusted back to where it was just adjusted to within the last two months I will pay it off and change companies and cards..as I told them I would... I have never been late, I always pay more, a lot more, they know it is Christmas, I know what they are trying to pull and I will do as I said I would with them, including contacting my Senators and Levin who I can't stand but he is head of some of the hearings I have watched regarding this matter...you and you alone are responsible for taking care of these matters and reading the fine print and paying attention to your monthly bills.
It is frustrating, but you
December 27, 2007 - 19:20 ET by EdhenryIt is frustrating, but you can laugh at these pathetic whiners. I once told a bright young man who was frustrated by whinny co-workers and lazy vendors, that these people are your competition for your next job or promotion.
He smiled when he realized his future was even brighter than he thought.
Oh, and NBC is much more credible on economics than the WSJ, because they ignore statistics, causation, individual responsibility and have no bias..........right.
wow, bt....actually taking
December 28, 2007 - 09:19 ET by motherbeltwow, bt....actually taking responsibility and negotiating on your own...what a concept!! LOL
I'm waiting for the calls for government to bail them out. Get them to intervene and make the credit card companies lower their interest rates to zero and forego late mayment fees for 18 months, or something similar, to shield them from the consequences of their irresponsible actions.
Well, they got the mortgage companies to freeze their adjustable interest rates, when people signed contracts clearly knowing the rate would rise. Why not here?
The problem with government intervention in commerce: where does it end?
If someone stubs their toe
December 27, 2007 - 19:13 ET by Chris NormanIf someone stubs their toe in East Podunk, the media will blame Bush because he "didn't fully fund sidewalk repairs". It really is getting comedic.
Chris... ROFL....you said
December 27, 2007 - 19:30 ET by bigtimerChris...
ROFL....you said it all!
Right on cue: "bush not without blame"
December 27, 2007 - 21:47 ET by mastersofdeceitRight on cue: "bush not without blame"
"there are some who think the Bush Administration is not without blame."
delete
December 28, 2007 - 08:02 ET by motherbeltdelete
either a lie or a typo...
December 28, 2007 - 17:18 ET by wizardjrThe word "think" is in that sentence, so it has to be a lie or a typo IMHO.
I've been paying DOWN my
December 27, 2007 - 19:58 ET by FastEdcredit card debt, have been in my house, some 30 years, (paying that off too), have been out of work now for about a month, and the REAL reason for all my problems has got to be Global Warming and the Bush economy! If only we had elected algore, then the government would be paying my bills and the earth would be saved!!
There is no sense in being stupid, if you can't prove it! - my dad V
New want
December 27, 2007 - 20:19 ET by goldboughI really want a new camera, but won't buy it until I know I have enough to pay for it at the end of my credit card cycle. I must have learned this neat form of paying for things from my family.
There are lots of great toys to buy
December 27, 2007 - 21:32 ET by Daniel BakerBut I doubt anyone besides college students only is in credit card debt because of toys
Adulterers and Fornicators Club:Mccain, Guiliani and Thompson.
Moral Men Club: Huckabee and Romney
How to buy the right way.
December 27, 2007 - 21:33 ET by CalifMoeI grew up being told that I needed to save as well as work for what I earned..Funny how it works that way. When ever I want to buy something for fun. Like in my case I'm car nut. I invest an equal amount (of the toy) so if life got tuff, the toy is what was sold. It's worked for me for 51 years. Credit cards are only for short term buys. Use a small line of credit to pay off all cards each month. And pay down the LOC with each pay check. Interest on cards are calculated once a month, LOC's are done daily. Total interest is less on the LOC and you write it off... All it takes is self control..... ops.... sorry I forgot.
Exactly Moe
December 27, 2007 - 22:04 ET by BourbeauWe've become a society of overspenders; it starts with the kids needing every new gadget on the market, and runs right up to the parents who want to keep up with their peers. They've allowed themselves to blow thru their credit limits on their cards, and have sucked equity from their homes for additional purchasing power. I heard someone this morning whining about housing prices and how the declines have signficantly reduced the wealth of homeowners. Gee, and here I thought the only time you needed to worry about the value of your home was when you were going to sell it. Until then, you were living in it. But no, they can't help themselves, and think of their homes as ATMs. Now they have politicians of all stripes telling them it wasn't their fault. They weren't greedy and short sighted; it was the damn banks and mortgage companies. I'm sorry they are in the predicaments they are in, but I learned along time ago, never spend more than you have; always pay off your credit card balances monthly, and never ever take the equity out of your home. If you apply these disciplines to yourself and family, when these calamities occur, you can comfortably sit back and watch the fallout.
Come on guys . . .
December 27, 2007 - 21:52 ET by WingletDriverCome on guys aren't you being a little hard on Lisa Myers and the rest of the MSM by extension? When they talk about higher unemployment rates, it's obvious that they are talking about their own industry. It won't be long before Lisa (especially with reporting like this) is standing in the unemployment line like the so many of her comrades from the NYT, LAT, etc. Just think of this as a cry for help.
Credit Cards
December 27, 2007 - 22:05 ET by merlin61Hey bigtimer, I too got raised interest from my card
carrier and I too pay more than necessary and on
time. I called and they refused to lower the rate so
I wrote a letter and threatened to do what you are
going to do. Cancel them. I'm waiting for a
written response.
It is interesting how the
December 28, 2007 - 00:32 ET by clarkfkIt is interesting how the MSM is using their "blame everyone but yourselves" tactics in many other facets of news. Who knew that it was such a universally applicable idea...
I refuse to have credit cards. If I can't afford it right now, then I simply save up the cash - fewer hassles that way.
We live in a society where we are conditioned by corporations to "buy on cue." Their commercials show us how savvy and hip and cool and smart we would be if we owned their product. Then they tell us that we can finance it for low, low payments. And what do we do, but run out and buy the product.
My personal favorites along these lines are the Bowflex (which shows us how easy it would be to get as much sex as we want if we use the machine) and Bose (which tells us we are missing out on the ultimate in entertainment sound quality). Yet neither of these commercials will ever tell you the prices of their products (hundreds of $$) . They will, however, tell you how low the monthly payments could be and how much you're missing out by not purchasing.
Our society is so driven by mass commercialism that it is absolutely no wonder why we are in so much debt. For some reason we have to play "keep up with the Jonses."
On a personal note, I find it disturbing how pathetic Christmas has become. I saw so many ads on TV telling me to purchase gift cards. Have we become so lazy? And then the news reports of people gleefully taking back their gifts for other things. Is this because we no longer bother to figure out what gifts would suit people, or is it because we have become so possession-minded that most gifts we get are no longer good enough?
Partway
December 28, 2007 - 02:02 ET by UnsaneYou are partway there. Yes, there is much commercialism out there, yes, there is a rampant "keeping up with the Joneses" syndrome out there.
But corporations, society, etc, STILL cannot stomp out freewill.
To wit: I do not have an HDTV and will probably most likely be dragged kicking and screaming into the HDTV age. Don't get me wrong, I like HDTV, but:
1) I can't afford an HDTV.
2) I'm a "theater of the mind" kind of guy anyways. Give me a book or a good CD any day of the week. What do I need television for outside news or sports. To put it another way: an HDTV is LOW on my list of priorities.
3) I can't afford an HDTV.
So, of my own freewill, I will not get one. I'm going to see how far I can get ahead first.
And remember: credit cards are GREAT for convenience (like suddenly your car breaks down and don't have the cash on hand right then) but horrible for borrowing.
Res tantum valet quantum vendi potest.
Me too, Unsane. I'm just
December 28, 2007 - 09:18 ET by motherbeltMe too, Unsane. I'm just not interested enough in TV to want to spend big bucks on a huge plasma model...I'd rather spend my money on other things....my 32 inch box serves me fine...we do have a big-screen down in the "rec room" ....my hubby goes down to watch NASCAR and some football on it, and I will for movies on DVD, but that's about it. Don't care about high def...regular def is fine for me LOL.
I have a friend that just got plasma HDTV , so went to Direct TV....dumped Comcast so they lost their Cable modem Internet; had to sign up for DSL....and now are into buying DVD's in HD, for about $10 more per....it's a pebble thing...the ripples go out...along with more and more money..
Frankly, I'm too old to get involved in all that. ...and my hubby isn't able to do the things he used to, regarding setting up etc, so that's a consideration too. Eventually I'll be like one of those "I ain't changin!" geezers watching my little box while everyone else has full-wall widescreen LOL.
I'll tell you I am just
December 28, 2007 - 02:43 ET by jdhawkI'll tell you I am just shocked! SHOCKED, I tell you!!!
NBC is a part of GE. GE, among its many companies, has a credit group of companies. Here is the link: http://www.ge.com/products_services/finance_consumer.html. Note, that GE touts that it serves 130 million customers.
So, could it be that NBC it complaining about its parent company? Could it be that NBC has interviewed a GE credit customer and didn't even know it?
Inquiring minds want to know why GE credit wasn't interviewed, called on the carpet, skewered, etc? Could it be that they write the checks for the very same people that brought you this "hit" piece.
Shhhhhhhhhhhhhhhhhhhhhhhhhhh . . . GE Credit slaps fees on people that can't pay their credit card balances. They dig people deeper and deeper who are already in trouble! Why, should I say it???? They are EVIL!!! Shhhhhhhhhhhhhhhhhh . . .
Don't share the above with ANYBODY!!!!
Rule of 72
December 28, 2007 - 02:52 ET by DanDanSome of you have said the our youth have not been taught to save ---
I too wonder about this --- why are we not teaching the rule of 72 to
our kids in the 7th grade -----
Lee
<td hei
Rule of 78ths
December 28, 2007 - 08:11 ET by Pete WilsonDan:
I assume that you refer to the rule of 78ths, or the sum of the digits method of calculating interest. Of course, you pay most of the interest in the front end of the loan term. That is why so many commercials are heard trying to entice people to "manage" their mortgages, and refinancing every time the interest rate falls. Yes, that gives the "client", or victim, a better rate, but keeps that same "client" at the top of the 78ths chart, paying more interest than principal.
Apparently, you are right, that this method of calculating interest is not being taught. I did not learn of it until I was working in the personal finance business, too many years ago.
Pete
PW - the way I was told
December 28, 2007 - 10:55 ET by FastEdthat Rule 72 is as follows:
Take a $1, put into savings at 10%, and in 72 years you will have $2! Using this formula, you can figure out, pretty accurately, what your interest will be for SAVINGS! Question for everyone, how many people are teaching their kids HOW to save? or are we just letting them SPEND- like our government?
There is no sense in being stupid, if you can't prove it! - my dad V
Check it -
December 28, 2007 - 11:46 ET by HermanoI believe you will have $2 in 7 years at 10% - not 72.
Savings & the Rule of 72
December 28, 2007 - 11:58 ET by BlondeHere's the way it works...
Take the number 72 and divide by the interest rate. That number is how many years it will take you to double your money.
6% = 12 years
10% = 7.2 years
15% = 5 years (a little less, actually).
David Gregory, do you know which damn network you lie for? ~ Uncle Jimbo, @Blackfive
PW - the way I was told
December 28, 2007 - 10:55 ET by FastEdthat Rule 72 is as follows:
Take a $1, put into savings at 10%, and in 72 years you will have $2! Using this formula, you can figure out, pretty accurately, what your interest will be for SAVINGS! Question for everyone, how many people are teaching their kids HOW to save? or are we just letting them SPEND- like our government?
There is no sense in being stupid, if you can't prove it! - my dad V
RULE OF 72
December 28, 2007 - 21:36 ET by DanDanBlondie is Right ---
An 18 year old starts saving $100.00/ mo
and gets interest rate of 12 %
12 into 72 is 6 years ----
at age 24 100.00 turns into 200.00
at age 30 200.00 turns into 400.00
at age 36 400.00 turns into 800.00
at age 42 800.00 turns into 1600.00
at age 48 1600.00 turns into 3200.00
at age 54 3200.00 turns into 6400.00
at age 60 6400.00 turns into 12800.00
now at age 60 he has been doing this for
42 years or 504 months ----
this means that he can now take out
12,800.00 per month for 42 years or 504 months--
THIS IS THE POWER OF THE RULE OF 72
Lee
Government at work
December 28, 2007 - 07:42 ET by Founding_FatherYou all are way too hard on these folks. I'm sure Durbin, Pelosi, and Reid will take care of this. Our taxes will be raised to pay off their debt (while they watch these stories on their new plasma TV)...
Now that's Government in Action!!!!
I have a mother who is big
December 28, 2007 - 09:42 ET by taterI have a mother who is big into saving money...and basically forced me to save some money for college when I was younger. While I don't have a high paying job, I have a savings account with money in it and credit card bills that I can pay off fully every month. Thanks to mom for showing me the importance of saving a little each month.
But don't ask me about my college loan debt...every monthly payment is like trying to wet a sponge with an eyedropper.
Do you realize how much it costs to run for office? More than any honest man could afford. -Montgomery Burns
Personal Choice
December 28, 2007 - 10:44 ET by PolazerusMy wife and I are raising our family as a single income household. She is often told how lucky she is because she is able to stay home. It irritates her to no end because this was a deliberate decision on our part. Not luck. We don't have two nice cars. We don't have a big screen TV. We have a 750 sq ft house. Our dishwasher is a hand me down. We do not own credit cards because we both believe, strongly, that debt is not a good thing. I save 20% of my income for retirement, send my kids to Catholic School, and have a blue collar income. We are happy because we planned this life. We are not lucky.
Well done
December 28, 2007 - 10:55 ET by AgnosticYou are to be commended. My wife and I came to the same conclusion though we have not as of yet been blessed with children we are hopeful. Five years ago we looked at the amount interest we were paying each month and decided that the intrest alone would be enough to save for retirement. We paid off everything and haven't paid a penny of interest in four years. Sure, we did without on my meager income for the first few years but we are now back to the same lifestyle we enjoyed before and saving significantly toward retirement.
Awesome
December 28, 2007 - 11:00 ET by PolazerusWe did break down and get a larger vehicle but are quickly paying this debt down and chipping away at the mortgage, so we are still slaves to the lender. Trying, but not free yet. Great for you and you will now be that much better off when you are blessed with children. Merry Christmas and Happy New Year.
Dishwasher?
December 28, 2007 - 13:24 ET by Conservative BluesYou have a dishwasher? You guys are rich.
We made the same decision when we got married in 1992. Four kids at home, my wife works PT at the local YMCA in the nursery, taking the baby with her ($13.00/month for day care). Both vehicles paid off, one is a '92 Trans Sport with 258,000 miles.
We are the Joneses. Our friends all want off the debt track but don't know how. We've been following Dave Ramsey and his Total Money Makeover (not a commercial, it's just a great system) since September with great results.
Ecclesiastes 10:2 - "The heart of the wise inclines to the right, but the heart of the fool to the left."
I am 23
December 28, 2007 - 10:55 ET by pwoz...but I only have one credit card... which I got last year... my limit started at 1500, and since I make every payment on time (never had more than 500 spent on the card), they just raised my limit...
I make great money for my age, and I'll admit when I got the job I was buying myself goodies (guitar stuff, nicer clothes, etc), but I've started the 401k and I'm saving in the bank.. I was raised to never have to rely on credit except when you are trying to buy a house... and even then I'm only going 3-4 times my salary... ugh.. I gotta move from NJ.. I'm really considering NC.
Good for you...
December 28, 2007 - 11:44 ET by HermanoKeep in mind, the earlier you save, the more it will be worth in the end. Early money is the best. Keep on saving.
very true
December 28, 2007 - 11:55 ET by pwozI'm probably going to rely 50/50 on bank savings and the 401k.. I figured I can put more into retirement now that I'm single and still at home (long story).
What liberals think...
December 28, 2007 - 10:55 ET by c5thenLiberals think that the "poor consumer" should be able to walk away from any contract with "corporate america" with no ramifications.
The day that "politician" became a career choice is the day we started losing the Republic. Let's get it back! Alan Keyes '08.
RULE OF 72
December 28, 2007 - 21:39 ET by DanDanBlonde is Right ---
SEE ABOVE
An 18 year old starts saving $100.00/ mo
and gets interest rate of 12 %
12 into 72 is 6 years ----
at age 24 100.00 turns into 200.00
at age 30 200.00 turns into 400.00
at age 36 400.00 turns into 800.00
at age 42 800.00 turns into 1600.00
at age 48 1600.00 turns into 3200.00
at age 54 3200.00 turns into 6400.00
at age 60 6400.00 turns into 12800.00
now at age 60 he has been doing this for
42 years or 504 months ----
this means that he can now take out
12,800.00 per month for 42 years or 504 months--
THIS IS THE POWER OF THE RULE OF 72
This is why we should be teaching this to kids in the 7th grade
Lee