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.