Thursday, April 12, 2012

Debt Zwei

I am not a big advocate of debt.  But the following is especially disturbing:

But as financial institutions recover from the losses on loans made to troubled borrowers, some of the largest lenders to the less than creditworthy, including Capital One and GM Financial, are trying to woo them back, while HSBC and JPMorgan Chase are among those tiptoeing again into subprime lending.
Credit card lenders gave out 1.1 million new cards to borrowers with damaged credit in December, up 12.3 percent from the same month a year earlier, according to Equifax’s credit trends report released in March. These borrowers accounted for 23 percent of new auto loans in the fourth quarter of 2011, up from 17 percent in the same period of 2009, Experian, a credit scoring firm, said.
Consumer advocates and lawyers worry that the financial institutions are again preying on the most vulnerable and least financially sophisticated borrowers, who are often willing to take out credit at any cost.
“These people are addicted to credit, and banks are pushing it,” said Charles Juntikka, a bankruptcy lawyer in Manhattan.  (

Didn't the banks and credit cards issuers learn from last time.  Some people can not handle / repay debt.  They have enough problems just feeding themselves and providing shelter.  Subprime loans were pushed by the government so more people could "afford" to live in a home of their own.  But subprime loans are not good business and it cost the taxpayers billions of dollars (with many more billions in the future [fanny mae and freddy mac]).

When we were first married, we applied for a credit card and were rejected.  I wrote one of my bitter letters, explaining that we had no credit history because we paid cash for everything and had various investments, etc. so we were not bad risks.  And they eventually gave us the credit card.  Credit cards are useful for some things and if you can handle credit (i.e., pay off the bill every month) can give some benefits.


We bought gas @ $4.18.9 the other day, on a trip yesterday we saw it at $4.08.9; so it looks like I am in control once again!

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