What if everybody just quit paying their credit card bills?

[SoCalDem]

With housing tanking, and people losing houses right and left and getting cars repossesed, if your credit is is the shitter already, what if even 50% of the people who "roll" balances, just all sent a letter saying, this is the LAST payment I am making.. If you banks can "write off debt" and do "markdowns" and just sign YOUR debts away, so can we..

If you are already broke, why keep digging that hole deeper?

My guess is that this would be the final straw that might just pop the pus-filled boil that is now our "financial system".. Instead of the drip-drip-drip of economic bad news, why not just pop it and start fresh..with NEW rules..and lots of them..

[LoZoccolo]

1. Then no one would lend anyone money. n/t

[SoCalDem]

5. Borrowing is what's brought us to our knees..

Stopping the borrowing might be what's needed

[Donnachaidh]

14. Then people would be forced to live within their means

What a NOVEL thought in this mass-marketed ~gotta do it or get it NOW~ mentality most live in. I stood in line the other day and the guy ahead of me bought a package of chewing gum with his Visa -- not a debit card - his credit card! I had to take a deep breath and not slap him upside the head for doing something so utterly LAME. A well-dressed man, in a suit and a tie - buying gum with plastic.

Too many people don't know how to budget, and are so freaking brainwashed into BUYING. It doesn't matter what it is - if it's new, shiny, and the marketers tell you it's chic -- gotta have it. Of course, those cheap items you may buy on sale aren't so cheap when you tack on all the charges, etc.

[napi21]

25. Before you beat up on that guy, think about this.

I buy EVERYTHING with mt VISA credit card and pay it off each month. I never pay any interest, but someone else (VISA) keeps all my accounting records for me! At the end of the year, they kindly send me an annual summary and break down all my expenses so I have all the record I need to do my taxes, A
ND to do a review on just where my money is spent!

I admit, so people don't seem to know how to handle credit, and they very foolishly charge dumb stuff and then pay interest on "a pack of gum"! But if you usee it right, your credit card can be a great thing!

[ayeshahaqqiqa]

34. You are living within your budget

and being wise about credit cards. Kudos to you!

The only time I kept a balance on my card was when a friend gave us a sob story about needing money for a truck--which she got, then moved away with no forwarding address and, needless to say, without paying us back a dime.

[Jim__]

27. "Not borrowing" can bring us to our knees too.

The historic situation was post-Civil War America when the federal government was trying to get greenbacks out of circulation. Credit was so tight that farmers often couldn't borrow seed money to plant their crop. This situation led to the Populist Movement and ultimately to the Federal Reserve System.

Lack of available credit is a serious problem.

[marylanddem]

2. I like the revolutionary spirit in your thought

but what if we all quit buying shit on credit that we don't really need?

[SoCalDem]

3. That would naturally follow

:evilgrin:

[panader0]

4. I'm all for it. I owe about $4500.00 and the payments are killer.

[glowing]

6. Interesting thought... but not enough will do it to make an impact.

[DS1]

7. because when the banks jack up the rates across the board

people who save up for things they want, like me, instead of borrowing money to get them 'now' will come burn your beemers to the ground.

:)

[SoCalDem]

10. Whew.. no beemer here.. We're safe.. (also no credit cards)

:)

[NC_Nurse]

8. The bankruptcy bill would get you.

Sadly, the new draconian bill passed last year with BIPARTISAN support :-( gives them the right
to dock your paycheck to get their money. You can walk away from a house or car, but the credit card companies have got you.
That's part of the whole foreclosure mess; they created it themselves with this new law. Stoopid.

[LeftCoast]

23. Exactly!

So now what you do is you re-fi the house, pay off the cards and then declare bankruptcy which is what a lot of people have already done apparently.

[SoCalDem]

30. People have been using their homes as ATMs and many have NO equity

to tap into or to justify a re-fi.. that's why so many are just walking away

[Kucinich4America]

39. Ah yes, the bankruptcy bill....

Wasn't that sponsored by the guy who has suddenly been hailed as the second coming of Christ around here in recent weeks?
(a silly comparison, of course. Jesus never had hairplugs :evilgrin: )

[pretzel4gore]

9. the average citizen is a paycheque away

from being broke.....in a large modern city, the citizenry can be starving and killing for water in only days....
don't think mr pig hasn't spent alot of time thinking about dealing with us, and how to scatter our energies

[eleny]

11. My first thought was that people ought t try and stop using them

I remember back in the 70s when Jimmy Carter asked the public to do it I got rid of my Master Charge. It felt really good. But we were just starting out and lived quite simply. Camping up in the mountains for the weekend was high level entertainment to us. (Still is!)

Do you remember when it was tough getting a credit card, car loan from the bank or a mortgage? I remember being turned down at the bank for a car loan and then someone at work told me to go join the credit union. I was able to get a loan by putting up my retirement account as collateral. Collateral? Now there's a word from the past.

But that was before so many luxuries we have come to need. So people have learned to accept living beyond their means as a way of life.

[SoCalDem]

15. Yep.. our first BankAmericard (1970) had a $500 limit

and our first house.. 30% DOWN..and proof that we did not borrow any of it..and only ONE income allowed for the loan.

banks wanted people to be able to AFFORD what they borrowed money to buy.;/.

[Gormy Cuss]

22. "...proof that we did not borrow any of it.."

I was in a thread the other day trying to explain that once upon a time mortgage lenders actually worried about whether the applicants could afford the loan, as opposed to recent years where it was approached more like a giant pyramid scheme.

[eleny]

29. A while back I had a credit card company reduce the limit on a card

I had this notion that if I used that card for online purchases, we'd be safer if it had a very low limit. (I mean in case someone got the number.) It took me a while to explain my reasoning to the company representative but she final got it and lowered the limit.

We're not the credit card companies dream customer as we never carry a balance. I imagine they'd break out the champagne if we ever did.

[Flaxbee]

12. I've mused about the same thing... the entire country

would have to do it, though, for it to make a difference... But you're right - everyone write off "bad" debt (debt that is no longer manageable) - only credit cards, not student loans or car payments, and the current system would crumble (it's rotten anyway). And I bet the economy would keep on rolling just fine; people would be spending their cash on things, not charging and then getting yoked permanently by credit card bills.

[AndyTiedye]

13. Or Go to the Other Extreme and Pay them All Off

I try to pay small businesses in cash. Let the big ones eat plastic. They and the credit card companies deserve each other. Pay it off every month.

[SoCalDem]

19. we DID that 3 years ago and now pay cash for everything..even our cars

and I do take cash to local stores..show them the money and you'll get free delivery, discounts, the 'extras".. Small businesses don;t like dealing with the credit card companies either

[NNN0LHI]

40. Around here plastic is so common when I pull out cash they act like I am trying to rob the place

Cashiers don't know how to give out the CORRECT change any more either. Got to watch them like a hawk.

Don

[terisan]

16. We don't have debtor's prison now; we have the equivalent of house arrest.

People without freedom of action, worried about sky high interest rates, which would have been considered usury, a crime, in the Middle Ages. We have probably millions of people who are trapped in jobs they hate because it provides at least rudimentary health insurance for their familes.

I understand workers had more time off in the Middle Ages agrarian society, due to festivals etc. The Church at the time also served to keep the landowners in check because they wanted the people to have time off for the saint feast days throughout the year.


Our current government would probably welcome a violent uprising so that they could do to us what they did to Iraq and New Orleans.

We need some nonviolent action.

I suspect Bush promised Congress that if they did not impeach, he will leave at the end of his term...his word is worthless.

[terisan]

26. I came across an internet organization that eliminates banks yet seems above board.

They vet borrowers, and let individuals bid on buying part of the loans, thereby spreading risk. They are actually the lenders, and they sell the loans to the bidders.

No banks involved. I am interested in others thoughts on this. It is called prosper.com

[Gormy Cuss]

17. It would widen the gap between the haves and the have nots.

Not everyone will quit, and those who are still paying will become more highly valued customers and potentially have the clout to negotiate better terms. Credit ratings are already relied on for too many decisions. Those still in good standing after the great credit quit will be golden in the eyes of creditors. Those who walk away from debts will be pariahs.

It also wouldn't surprise me if Congress acted quickly to find relief for the financial institutions involved because such widespread shocks to the system could bring down the economy even more. It could get ugly very fast. Think a modern WPA for debtors. Think rampant, widespread racism against "job-stealing" foreigners because the newly minted pariahs will be shut out of much of the job market (thanks to the use of credit reports to judge job applicants.) It would take years, perhaps decades, for the whole system to correct.

Interesting idea, though.

[Deja Q]

20. Precisely.

And if even I can leave the offshoring/illegal immigration debate out of this, so can anyone else. :D

[Deja Q]

18. I paid mine back; wasn't easy - to say the least.

I know what you're trying to say. Won't work.

[flvegan]

21. Well, the creditors could sue for the balance, get a judgment and execute on it.

In some states, they could execute that judgment on your home.

[msongs]

24. "the pus filled boil" is caused by personal choices and irresponsibility. nt

[SOS]

33. Sure

The uninsured worker who was wiped out by medical bills is "irresponsible".
The person financially destroyed by the death of a spouse, loss of a job or divorce made a silly "personal choice".
The low income fellow, deceived by vampires in pursuit of his dream of home ownership, made a poor choice.

The greedy, deregulated, usurious, malevolent, predatory, un-American Wall Street bankers have nothing to do with it!

[SammyWinstonJack]

35. !

:thumbsup:

[msongs]

37. only some people in credit card debt are in the categories you describe nt

people spending money they don't have for things they can't otherwise afford and don't need will find that when they borrow money and agree to pay it back, there is a penalty.


Msongs

[SOS]

38. "some people" = 90%

"There's no evidence of bankruptcy abuse. Bankruptcies have gone up, but so have credit card debt and credit card profits over the years. Independent studies, such as those of Harvard Law School professor Elizabeth Warren, show that the 90% or more of bankruptcies are still filed by people who get sick, get laid off, or get divorced, not by abusers. The industry can only document that 3% of filers may be abusers, yet the bill would harm all debtors. Warren's newest study, released in Februrary 2005, and done with colleagues at Harvard Medical School, shows that more than half of 2001 bankruptcy filers filed due to high medical debts."

http://www.pirg.org/consumer/bankrupt/index.htm

[Red Zelda]

28. No way

I'm using the cards all I can. I plan to run up the balances to the max. Then die.
I have no kids, so it will be my final "fuck you." I don't have enough cash to live on, so I might as well continue my plan.

I wish I was kidding.

[spanone]

31. blackwater would step in......

[ayeshahaqqiqa]

32. Paid my credit cards off years ago, and don't use them now. n/t

[hunter]

36. This is going to happen spontaneously, I suspect.

People won't pay their credit card bills because they can't.

The house of cards the Bush Administration built is falling down -- it was all built on bad debt.

[muriel_volestrangler]

41. That's not what "write off debt" means

'Writing off debt' is when the entity the money is owed to says "forget it, I'll never get this debt back, it's not worth the hassle". If you're the one who owes the money, you don't get that choice.

Morally, a widespread refusal to pay debts wouldn't have justification. Sure, some people are in debt due to ridiculous hospital bills or similar, but some people bought cars with their loans. You have to differentiate between people who were screwed by a system, and people who got goods for the money.

[earth mom]

42. The problem is that most people have other debt that isn't from credit cards.

Like student loans and cars and mortgage. Those are the loans that you can't run from without losing everything or getting into trouble with the powers that be. And don't forget the monthly bills for utilities-another noose around the neck.

We pay for everything in cash-no credit cards-but have the debts I listed. I can't tell you how many times I've wanted to sell everything and buy a ticket to Europe and live out of a suitcase! :argh: