Among the points she was giving about the evil industry, one fact really jumped out at me.
The average wage for a working male has remained flat for the past 30 years, while living costs have risen 70%
Scary stuff. Now, I'm not a communist, but I do think Karl Marx had some good points.
The one point that I firmly believe in is that when enough of the middle class gets pushed down to lower class then trouble will explode. I'm preaching revolution, power to the people! and all that jazz.
The finance industry has beome predatory, seeking out the at risk people, because those are the ones they can fleece the most. Late charges, deliquency interest rates are where the credit cards make their money.
Enough money, that they were able to get Congress to revise the Bankruptcy laws, making it harder to file. In fact, according to the interview, pre-approved credit card mailings went up by 30% after the legislation was passed.
From a quick Google search:
According to American Consumer Credit Counseling, the total U.S. credit card debt in the first quarter of 2002 was approximately $60 billion. The average credit card interest rate is around 18.9%.
Approximately half of all credit card holders pay only their minimum monthly requirements. There are a total of 1.2 billion credit and retail cards in North America. The average American household is solicited seven times a year by credit card companies.
The Motley Fool's Credit Center features several more mind-blowing statistics:
- Total consumer credit: $1.7 trillion.
- Credit card debt carried by the average American: $8,562.
- Total finance charges Americans paid in 2001: $50 billion.
- Percent of U.S. households deemed credit worthy by the lending industry: 78%.
- Number of credit card holders who declared bankruptcy last year: 1.3 million.
On a more personal note, I can relate to those in trouble. When I was younger and still in college, I bought into the hype that a college degree and my good looks would get me the dream job, and that it was ok to mortgage my future to live a little in the present. I worked two jobs (at a movie theater and a school library) to cover at least my minimum payments and car related expenses. When my mother passed away, I began to rely heavily on my credit cards to get by. In 1998, I was living in Central Virginia, was making 22k a year and had 30k in credit card and college debt.
Is it any wonder I jumped at a chance to flee the scene and get a better paying job with no state income tax. I was fortunate to have friends that lent me a car for several months and some money to get by. When I arrived in Texas I made a serious effort to get everything in order.
I sacrificed my personal life for overtime at work and worked with a credit agency to reduce my payments. Within 5 years I was able to start over.
BUT! I was young and single. For those with families, the trouble is much tougher.
What makes matters worse, is the disturbing trend of the reliance on credit scores for things other than credit. Increasingly credit reports are being checked for job applications, health insurance, life insurance and rental applications. Imagine the havoc on your life if you have a medical emergency and have to miss a few payments.
Something has got to give
