able to pay are discovering that they can't pay for all the stuff they charged on credit cards, either. Both delinquencies and defaults are increasing at a rapid rate.On the one hand, it's hard to feel sorry for credit card companies that have to write off bad debts, because they actively pursue more debtors. Companies constantly send out "pre-approved" credit offers without regard to whether the recipient has the means (or the mentality) to handle a card responsibly.
As with the the troubled "sub-prime" mortgage market, the card companies offer low teaser rates on interest that encourage cardholders to borrow more money, but those who aren't savvy enough to limit their spending to what they can pay off before the teaser rates expire get stuck with higher and higher rates -- some as high as 30 percent.
The problem is not just with greedy loan companies, however, but with greedy borrowers who are so devoted to our consumerist culture that they feel it imperative to have more house and more stuff than they can possibly need for any purpose other than keeping up with their neighbors. Many of the people who are deepest in debt have above average incomes -- but also above average greed.
Sadly, what our culture has done to Christmas is a part of the problem. We think it's not Christmas if we don't give (or receive) enormously expensive Christmas gifts, many of which wind up on credit cards that we know can't be repaid at the end of the month.
At our house, we haven't stopped giving gifts entirely (we're not quite that bah-humbuggy), but we have reduced them. We have tacit agreements with friends who used to exchange gifts that we'll forgo gifts and contribute to charity instead. Jan and I put a dollar limit on how much we can spend on each other, and we refuse to give in to the notion that children's egos will suffer irreparably if they don't get everything they want.
Whether Christmas or not, we limit ourselves to one active credit card each, and use them only for convenience, not as our personal loan officer. If we can't pay something off by the end of the month, we don't buy it.
It's easy to fall into the trap of trying to outdo one another or to measure love by the value of the gifts we give or receive, but it is not an unavoidable trap.
The Christmas gift that really matters was born in a stable. In his life and death, Jesus gave far more than any of us will ever deserve: that's the only debt we should be unable to repay.
11 comments:
Merry Christmas to you and yours Tony! And, you're right on target with regard to credit... of any kind - card or mortgage. Good Advice. It has worked decades for me and my family. Living within means was a principle my parents taught me and I have passed on to my children.
Blessings and good wishes for the New Year, especially your work with the NC section of Baptists Today. I'll be plugging you.
Joe Babb
You've touched on several hot topics. Our whole system of capitalism exploits human weakness. Desire, temptation, you name it-it's what we pray to God to keep from our paths. But at appointed times during the year we overindulge our selfish natures and go all out, on shaky credit limbs that you can hear creaking in the wind of advertisers' unending blowing of hot air.
"What do you want for Christmas?" A question that holds the oldest memories of our childhoods and beyond. I want peace among all peoples and same to live in harmony. In short, heaven.
Merry Christmas! May God rest your soul and may you find peace in giving your life to Jesus. He gave you His.
We should find it easy to give our lives to help only those around us. Jesus gave His to help/save all of humanity.
I understand starduster's point when he states:
"Our whole system of capitalism exploits human weakness."
However it would be more precise to state "our system of marketing" which he alludes to (advertisers' unending) later in the same paragraph.
More technically, our "system of capitalism" depends on "meaningful supply" creating its own demand. At that level, meaningful supply is agnostic. When supply is not meaningful, demand doesn't follow. So capitalism itself is not the culprit.
Like Tony, I've never failed to pay off 100% of all credit card charges in the following month .... the card is merely a payment convenience, not a method of borrowing money. However, a "single card" with a $25,000 limit might facilitate more than can be paid off without exercising prudence. It is the exercising of prudence that matters more than how many cards or what card limits exist.
My point is, it is more important to understand the basic principles than rely on mechanical techniques.
Eagerly anticipating the arrival of family for Christmas Day Lunch (which we called Dinner in my parent's house) and the exchanging of mostly sensible gifts.
Wishing all a Blessed and Merry Christmas
You're right, Gene, to be more specific. But without the system there'd be no need for marketing.
I am looking at a bigger picture here. Terms like "let the buyer beware" and "charge what the market will bear" are commonly understood. It's a dangerous, dog eat dog world out there, one that academics and students alike may forget exists.
It's easy to insulate ourselves from real-world problems. Why, they are as close as Fox News. What do you do to forget about the genocide in Sudan, the war in Iraq or the killings under Sharia law in Iran? It is not as easy as "turning off the news."
Interesting questions for a Christmas day. I am so glad Jesus lived and died for me so I can ask these questions. I think that is my purpose for living, so I can ask questions.
Merry Christmas, and thanks for writing.
I agree the our capitalist system offers over zealous marketing an opportunity to thrive, at least temporarily (where 25 years, or so, might be classified as temporary). Nevertheless, it is by far the most efficient system for timely distributing valuable resources (that have alternative uses) to ideal places, in ideal quantities.
Having been a practicing CPA for most of my adult life, I am certainly cognizant of "charging what the market will bear." I am also cognizant that is not the only factor to consider, as charging slightly less than others will often generate more income than "what the market will bear."
I doubt if you and I will solve the issue of killing atrocities in this thread, but there might actually be at least a minor economic factor. Where there are more people than there is hope, economically speaking, human life tends to become more expendable .... a state that makes decisions involving killing less difficult. So as global economic conditions improve, there is one less factor supporting killing. Even resource imbalances, such as who controls how much oil, will work out over time, though there can be wars in the meantime.
I expect this discussion is not what Tony had in mind when he made his original post :-)
We certainly agree in our appreciation of Jesus living and dying for each of us, personally.
To all,
Thanks for the comments, guys. You never know where a post will lead!
Peace,
Tony
Ah, a CPA. I knew there was something about you I liked. :-)
You have summed up our thread rather nicely. Comes from years of organized thinking. Would be nice if more people thought that way.
One aspect of credit cards we haven't mentioned is the zero percent deals you sometimes get with no transfer fees, usually for one year before the rate changes and you have to pay it off. I've been doing this for over 7 years now and just drawing the interest on the money in my high yield account while I make the payments online. When the intro period is up, I make sure I pay it off somehow before that happens.
As long as they offer me money for nothing I'll take it, and put it to use, since I make so little salary it takes all the little extras I can muster to get ends within sight of each other.
Thanks for writing.
Good morning, Gene. I read a quote this morning slightly related to our capitalism discussion:
Science and Scientists
The pace of science forces the pace of technique. Theoretical physics forces atomic energy on us; the successful production of the fission bomb forces upon us the manufacture of the hydrogen bomb. We do not choose our problems, we do not choose our products; we are pushed, we are forced -- by what? By a system which has no purpose and goal transcending it, and which makes man its appendix.
Erich Fromm
1900-1980, American Psychologist
star,
That impetus, while applicable in science (as we have witnessed lately regarding stem cell research and applications), may not overlay cleanly on capitalism.
George Gilder, in his book Wealth and Poverty-1982, (a Google search will return indicators of both genius and crackpot) states:
CAPITALISM begins with giving. Not from greed, avarice, or even self-love can one expect the rewards of commerce, but from a spirit closely akin to altruism, a regard for the needs of others, a benevolent, out-going, and courageous temper of mind. Such a universal trait as self-interest--altogether as prevalent in any socialist backwater or deadening bureaucracy as in the realms of great enterprise--will reveal virtually nothing of the rare sources of riches in human society. Not taking and consuming, but giving, risking, and creating are the characteristic roles of the capitalist, the key producer of the wealth of nations, from the least developed to the most advanced.
I certainly didn't encounter that notion in Economics 101 at ECU :-)
No kidding. Sorry for the delay, but it's taken me time to mull this over a bit.
I can see the point. To begin anything, one must devote his/her time and resources to it. This applies to any endeavor, big and small.
It's when civilization has gone on so long as it has, like it did in previous ones, hundreds of years, it's only now that the system has had time to become thoroughly corrupt.
If you've seen "Batman Begins" starring Christian Bale, that kinda sums up the economic horizon as we live it. A corrupt Gotham City. Payoffs, shoddy workmanship to save money, the list of human failings goes on forever, but I try not to think about it.
I try to stay focused on the positive side, which Jesus has brought to my attention so many times, and in so many ways.
Praise the Lord for all my wealth of spirit and mind (certainly not material! hehe). Thanks for reading.
Hello star,
I suppose if you and I are the only ones still reading this thread, we could do this by email :-)
I assume by "system" you mean more than the economic system .... the political system, the church system, etc.?
I agree there is corruption in the system(s). I'm not convinced the corruption is any more in one than another.
I didn't see "Batman Begins" (I seem to have boycotted 99% of all movies :-) ) but I understand the premise. Interestingly the corruption tends to be more prevalent in "mature" systems ... less prevalent in "startups."
So within the "system" there are thoroughly corrupt, modestly corrupt, and not yet corrupt systems.
There is always fresh air and hope.
Post a Comment