Browse Category by Credit and lending
Credit and lending

Do other countries have the same belief?

“How can a culture go from being shameful, about having to use credit, to its prestige to have a platinum card in 50 years? Do other countries have the same belief?”

That’s easy in one word “Marketing” Our culture is now driven by the media not by our grandparents and parents values. The bottom line is my grandparents would have found a plot of land and planted it with neighbors to ensure they could feed their family and have adequate savings. The media is there to ensure business get support. They want consumer driven culture and they have been very successful at changing American culture from family values to consumer driven over the last 25 years. They have no reason to support thrift. Heck my great grandfather only was able to get work about 5 to 7 months a year. My grandmother took in laundry and cleaned houses to help raise 12 kids. A man who took out credit to support his family was considered lazy and having poor impulse control even though it took on average a month to get that credit.

The media is very skilled at altering perspective. If your perspective is you “NEED” unsecured credit then it is being driven by the media and you should take a look in the mirror ( and yes that includes me). Needing credit to buy a depreciating asset like a car is a foolish idea that comes from being told that a car is more then a way to get from point a to point b and the only way to get from point a to point b is for every adult member of a household own one big enough to transport half your kid’s soccer team and their equipment with a suspension designed to navigate dirt roads which the average family rarely pass.

Let’s face it we have twice as much stuff and much space in our houses then the average family did 50 years ago and we have the debt to prove it. And we whine about it and blame it on unemployment, car repair, and other stupid excuse rather then taking responsibility and stepping up to the plate and saying this is screwing up my life and I need to change. Debt is the result of overspending and poor planning. We should all plan on unemployment, car repairs, medical bills and lots of other things like rain will happen.

Change starts with a change in perspective and if we don’t get our heads our of our _____ then we will fall back into the same trap we find ourselves sitting in right now.

Credit and lending have been around since before there was money. There are expectations on both sides and laws that predate history have come about to help the process. Countries and businesses couldn’t exist without credit. It’s a necessary financial tool that every successful person has used.

I’ve heard it said many times that every successful business has three key components: a sharp lawyer, a good accountant and a friendly banker. Credit has to be managed and regulated so that it remains the useful tool that it’s supposed to be, but the bankers have bought favors from our government and they’ve changed the ground rules in mid-stream. The calculated risks that were made at the outset have changed and now borrowers find themselves in places they never imagined were possible. That just isn’t right.

What’s next? Expect to see, “Yes you made all your payments on time, but since we saw that you were sneezing, we decided that you wouldn’t be able to keep up that second job so now we consider you a greater credit risk and we’re jacking you up to 30 percent interest anyway”. Not far-fetched is it?