The Credit Card Culture is Cracking

My second observation about the economy . . .

The Credit Card Culture is Cracking

I hear, see and sense our culture changing their views on credit cards.  When times are good, the credit card companies are eager to give out 0 % interest, and a tote bag of your favorite sports team.  In the bad times, they are more eager to triple your APR and enforce every possible fee.

I think the whole credit system is ludicrous.  To get a loan from the bank you usually have to show good financial records and offer up collateral for a decent interest rate.  The credit card companies offer thousands of dollars of “unsecured” debt.   Let’s face it, we all knew in our hearts this was going to end up bad.   We are supposed to be held hostage by this arbitrary number – our credit rating.   I have often wandered what would happen if everyone stopped paying on their credit cards – what would the companies do?   They could take away are credit rating, but we don’t need to borrow any more money anyway.   House payments and car payments have teeth, but credit card payments really have no bite.    This is precisely why the system is destined to fail.

Now, I think we have a responsibility to pay back what we borrow, even if its owed to the evil credit card companies.  However, that is not my point.  I am trying to point out how ridiculous the credit card system is, and I hope it crumbles for good.   I see Americans emerging as much wiser, and in the future we will all look at the use of credit in a a responsible way.

Gas Prices Make A Difference

So as a small time investor, and a part of the “middle class”, here is my first unqualified observations about our economy:

Gas prices really matter.

At one time, I ugas-pricesed to shrug my shoulders at rising gas prices.   People around me stressed out at 20 to 30 cent increase in a gallon of gas, but the simple math just didn’t make that much an impact on me.   Then, 2008 happened.  Sure, it is depressing to see your 401K or IRA dwindle (yes, I lost a lost a lot in my retirement).  However, saving $20 to $30 in gas per fill up really effects the average person’s lifestyle.

Now that gas is under $2 / gallon, we need to push for alternative energy, new drilling of fossil fuels and other reachable solutions to reduce our dependence on foreign oil.  Again, our media is so short-sighted in their coverage of the issues.  Where is the talk about our energy crisis?  It still exists!  We still need to get serious about this!

We need more voices from both political perspectives continue to keep the heat on this issue.   Whether it is Newt Gingrich on the right reciting, “Drill Here, Drill Now”; or Thomas Friedman on the left calling us to “Green the Economy” – we need voices. Voices that won’t speak on the energy issue because it is “trendy”, but will champion the cause of energy independence because it is a necessity for our future.   It is amazing to me that no one seems to connect the ridiculous summer prices on gas with the collapse of our economy

I have learned during this time that energy prices really make a difference.   In the future, I will be looking for leaders who have done something in their record about energy independence, and have a clear plan on how we can improve our energy resources in the future.

Have the price of gas made a big difference in your life?