Sunday, October 11, 2009

Credit Shredit

October 12, 2008

Dear President Barack Obama,

I’d like to put in my two cents worth on credit card companies and my strong desire for more regulation in the credit card industry. I realize my views may not be the hot political topics of the week, but hey, I call them as I see them.

Way back in the day, as in twenty-five years ago, I was a college student at the University of Hawaii. An older student, all of twenty-five, paying my way through school. I had no credit cards and no debts and the idea of acquiring credit had not yet entered my head. My college roommate had a Liberty House credit card. It got my attention, but to my chagrin I was denied my own when I applied. It seemed that although I had no debts and a solid job cocktailing at Bobby McGee’s, credit card companies were not willing to take a risk on someone with no credit history. I learned by asking that one needed to establish a good credit history to be taken seriously in acquiring credit. My dad cosigned a Sear’s credit application and I had my first card. It had a $300 credit limit. My father explained that I was to use this prudently and to pay it off each month – thus establishing my good credit.

Fast forward twenty-five years later. Our 20 year old daughter who attends the University of Hawaii and whose only job is as a part time nanny (making barely enough money to cover her gas and parking), who shares my car with me, who commutes 45 minutes each way to school because we cannot afford a dorm; yes, this same girl – SHE gets fishing letters from both Chase and Capital One saying she is pre approved and please sign on the dotted line for a card right away. We tear these letters up. She called and asked to be taken off their lists. We went online and signed her up for the no-solicit-me-for-credit-in-the-mail. We still get these letters asking her if she wouldn’t like to go in debt before she even gets out of college.

We have had three occasions on our street with mail getting stolen. Once, we were the victims. The person who stole our mail tried to use my name and address to buy items online in some credit card scam. I have gone online several times and signed up not to be solicited by credit companies. Still, every week several offers for loans and cards arrive by mail.

My 82 year old mother has several credits cards and keeps maxing these out, getting her limits raised, and maxing them out again. This is a woman who inherited two homes and a decent retirement savings from her parents back in the 70’s. She quit her job and lived off the money, then sold one home, then took out a huge mortgage on the other. She eventually lost that home and soon after filed bankruptcy. She pawned off everything worth anything. For many many years now she has lived off a meager income and will NEVER, EVER be able to pay off the debts she is incurring. She knows this and does not care. “Those bills will die with me.” I can live with the fact that she never thought to help her children pay for college, and that she never made sure she would be secure in her retirement. But I cannot sign anything that would make me responsible for my crazy mother, as I am scared to death to someday get stuck with tens of thousands of dollars of dept she has accrued. I blame the crazy credit card companies for giving her credit in the first place when it is obvious to absofuckinglutely anyone with a lick of sense that she will never, ever, be able to pay off her debts.

Maybe this is just too much a common sense point of view, but here goes. Shouldn’t someone want credit enough to figure out how to get it on their own? If someone is incapable of finding the best rate for credit and applying for it, maybe we don’t want that person racking up a lot of debt…

I think credit card companies should not be able to solicit through the mail. I think there should be stricter guidelines for approving credit.

Some of my more conservative friends and I sometimes have friendly discussion on government regulation. I realize they are not fond of it. But here goes. In my opinion, capitalism and commercialism have gone way out of control. The lack of regulation has brought in a tide of unchecked greed and irresponsibility.

Please, Mr. President. I know you are busy, but could you think about moving this item up on your to do list?

Thank-you very much.

Until next week,

Sincerely,

Pseudo

44 comments:

Brian Miller said...

i used to work in the credit industry...i cant believe some of the loans and credit lines we made....scary. live checks with the terms on the back, all you have to do is cash it...glad i made it out of the industry alive. i agree with your sentiments...but them what will bolster the economy? that last line was sarcasm.

Kristan said...

So... here's the thing:

- I think you're right.

- But I ALSO think parents have responsibility in training their kids (as you obviously did with Daughter! and as your parents did with you) about financial responsibility.

So I'm not disagreeing with you, just adding on. :)

Very eloquent letter. Let's hope the Nobel winner reads it, and all your others!

mo.stoneskin said...

I seem to get credit card offers through the post every week, drives me nuts. Fair enough if I got one and I ignored it that's ok but they keep it up.

Cairo Typ0 said...
This comment has been removed by the author.
Cairo Typ0 said...

Great post! I haven't had a job or income in the last five years and yet the person who gets our mail in the states regularly gets pre-approved credit cards for me. I go back to N.America once a year and am always offered so many store credit card it's ridiculous.

Student Credit Cards said...

thank you for the update.

Beth said...

Amen, sister! I totally agree. We've had the same battles with credit card people sending enticing letters to my kids while they were jobless and in high school. Credit cards are NOT the way to the American Dream.

Jeanne said...

They passed some kind of credit card regulation earlier this year, but I'm not sure what's in it, or when it takes effect.

Mango Girl said...

Bravo on this post!!!!!

I have an alias I have used since high school. I get "pre-approved" cc applications for her all the time! It is completely nuts!

Vodka Mom said...

Here, here.

only a movie said...

Another great letter to the POTUS. Good points all around. I try to be on the do-no-call, do-no-mail lists, but they get through all the time.

ModernMom said...

Oh I so agree with you! If we signed on the dotted line for every credit card that came in the mail would would surely be broke!

The Good Cook said...

Having worked for the BIG bank I can tell you that Credit Card business is worth BILLIONS. They don't want you to PAY off your debt on a monthly basis. See, they don't make any money on you if you pay it off.

And going after college students - BIG MONEY - they get you for life.

Help your daughter establish credit by getting her a GAS card. Have her charge fill ups to the car and pay off every month. This is just good sense. Keep tearing up all the other offers.

And don't be too sure about your mother's debt dying with her. Oh, no. The long arm of the law and the bank will find her nearest kin. Please be diligent about this. Consult a lawyer as to what your possible responsibility may be. Seriously.

Shadow said...

credit can run out of control so easily. especially when you're young and into instant gratification, as we all are at that time...

Jeff D'Antonio said...

My CAT gets credit card offers in the mail. Seriously. I think I filled out a survey in his name once, and he ended up on a mailing list.

If I could just figure out a way for him to sign the application without personally commiting a felony, my cat would go on one hell of a shopping spree. I'd love to see 'em try to collect on that debt.

Maureen@IslandRoar said...

Well put. My 22 year old son keeps getting these. He cannot pay his school loans or rent (I do for now) and is only in his 2nd year of school. I have to call and remind him to write and hand in the rent check. He overdraws (by accident) regularly. I agree parents need to teach responsibility, as another commenter said, but kids do grow up and have their own issues, no matter what they were taught. And shouldn't there be some Ethical violation to offer kids/people like this such extravagant random credit??
You go girl!

Sprite's Keeper said...

I was in college passing those tables with the freebies and fell for the ploys to get us signed up.
I worked for MBNA (one of the major players for the college students) and saw case by case of people falling victim to the credit card machine. It's not an easy place to be. For your daughter to stop getting the offers, she may need to tell the school to stop allowing the info. Most of the time, it's the SCHOOLS selling the names on their roster to credit card companies and then she gets a cute pre-approval for her own card with the school's mascot on it. Those bastards.

Ocean Girl said...

Hi. Thank you for dropping by.

I'll be back. I've got to go to bed now :)

Joanna Jenkins said...

My 12 year old godson gets credit card solicitations in the mail all the time! And I was recently on a major college campus and saw TWO credit card companies passing out applications in the cafeteria area.

GREAT letter to the President!
xo

Little Ms Blogger said...

My sisters and I just had the talk with our 87 year old father yesterday that my sister has to sort all his mail to avoid things like this happening. He almost fell prey to a sweepstakes scam. I'm only thankful he doesn't believe in using a credit card.

Wild Child said...

My parents taught me that I should use a credit card as if I had the cash in my purse at the moment. If I don't have the money in the back to pay it off, I shouldn't use it. We, for the most part, pay off the bill every month. Last winter we got into a bind with both the snowblower and water heater dying at the same time. I carried that extra balance for about 3 months, but got it paid off. I do not envy you your situation with your mother, and I agree with Good Cook that you need to make sure you don't inherit her debt. Those companies want their money and I'll bet they'll squeeze it from the nearest relative if they can.

Hear, hear on all your comments. Capitalism is way out of hand.

A Mom on Spin said...

Well said, my friend.

Well said.

Pearl said...

Can I get on this letter with you? 'Cause it says what needs to be said.

Pearl

adrienne said...

Thanks for the visit! We already get so many credit card offers in the mail - it hadn't even occurred to me that my daughter will soon be getting them, too.
Excellent letter. My favorite part is the closing, "Until next week." :)

Erin@TheLocalsLoveIt said...

I agree with you and also with what Kristan added in her comment.

otin said...

When I get about 40,000 in debt, I'll probably just declare bankruptcy! LOL! Charles Schwabb, I'm not!!! hahaha!

midlife slices said...

I truly wish someone would do something about these rip off credit card companies. From your lips to.......someone who can do something's ears.

MitMoi said...

What gets me is this: I have two credit cards I use. One for business expense, one for personal. BOTH get paid off in full each month.

Somewhere along the line I have 2 other credit cards. I don't use them. I don't want them, I owe nothing on them - but do you know what will happen to my credit score IF I CANCEL THEM?!?

It will be damaged.

Seriously - I must keep an account open (which is a security liability) because I don't want/need that card anymore?

CRAZY - so my $0.02 is NEVER, EVER, apply for a card you're not going to want/need 'till the day you die.

Stacy (the Random Cool Chick) said...

Amen! I could not possibly agree with you more.

Hubby and I like to read all the credit card applications that come in the mail - checking out the fine print. What seems to be a good deal on the surface is so not. Then we rip them up and burn them for good measure.


:)

Janie at Sounding Forth said...

Amen, Sistah!!!

blueviolet said...

I wholeheartedly agree with you.

bernthis said...

Once again an amazing post. I wish I could stumble it but I have no freaking internet!! I can't stand these co's and could not agree more. Everytime I pay interest I feel like I'm tossing cash into the street

Casey said...

I spent the first two years after college living at home and paying every single paycheck toward credit cards. I hate how easy it was to get credit..

starrlife said...

We've got enough people here to start a movement! I'm with ya baby!

Ocean Girl said...

Let's change the word credit back to debt, and interest to usury.

Jane said...

We sit around blaming sub-prime mortgages but you're right, what about the credit card companies? And filing for bankrupcy no longer has the stigma it has years ago. Walking away from a mortgage that you promised to pay and credit debt that you, again, promised to pya is becoming commonplace. Sad.

Protege said...

Credit cads have been a problem in my past as well. When I lived in the US I had one, and at one point had big trouble paying back the credit on it. But I solved the problem before it got way out of hands and later got rid of the card.
I agree with you on the credit card pre-approval and the scams. Although I no longer live in the states, I remember those letters.
Sorry to read about the story of your mother...
Thank you so much for visiting my place.:)

Jan said...

There was a time I had no credit, and no credit cards. I also had no car - I couldn't afford one - but I paid all of my bills in full every month.

The credit card debt I have now is embarrassing and I frequently find myself wondering how we'll ever pay it off (Beloved's is even worse, thanks to buying this business and a nasty divorce where his ex-wife got all of the assets and he got all of the debt). We've decided we're going to try to pay them all off in 2 - 3 years. No small feat, believe me, but he's told me when we do, he'll be willing to talk about letting me retire.

I'm SO going to do this.

Heidi said...

Yes I really do agree. Hus and I only have one Visa and two dept store cards and only one of the dept store cards has anything on it. There are just so many people out there that feel like they have to have monetary things to be happy even if it means living above their means. Look at all the forclosure happening. Why would anyone get a mortgage that they may not be able to pay for if the interest rate changes or they get laid off for a while.
Definately don't sign anything for your mother!

Smart Mouth Broad said...

And the choir said, "Amen!"

Hit 40 said...

You are not responsible for her debts. There just will be no $$ to inherit. My husband's dad was deep in debt. The government took care of him after a stroke. If you are penniless, the government will step right in for you.

Anna See said...

I agree.

I remember going into the bank w/ my mom when she applied for a c.card in the early 80's. No dice b/c she had been a stay at home mom for so long. She refused to put my (surgeon) dad's name on the application b/c she wanted to be seen as her own person.

I remember her bursting into tears (as I do at so many inopportune moments) and saying, "You'll give college students these things but you won't give one to me????"

Anyway, now I know they give them out to ANYONE, but this is my earliest credit card memory... and maxing out my parents' card at The Limited a few years later. Yikes.

Midlife Jobhunter said...

The credit card companies pray on the young kids. My 17 year old went to make a deposit to his savings and came home with four new account. Mother Bear was not pleased.

duchess said...

I can't see any reason on earth why your daughter shouldn't get a credit card while they are offering, since you have taught her to be sensible and not go into debt.

People often need credit - for very good reason. Almost always to buy a house (do you know anyone who can do it without a mortgage?) and often to buy a car - just to name a few.

My son didn't take a card while he was at school and the result was later he could barely get a bank account. The only way he could establish credit was to buy a car at an insane interest rate. If he had got the card in school and used it a few times and paid it off there would be no problem.

Okay the system is bad, but the solution is not to tell kids they shouldn't get cards. The solution is to teach them to use them responsibly.