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Spending the American Way..........part 3

posted 06/17/08 03:20 AM | Viewed 153 times
When this recent economic disaster began with the "Great Real Estate Bust"  so many fingers were pointed at the evil mortgage companies and lenders for misleading  prospective homebuyers. While I do believe that many individuals were misinformed, I also feel many should have used better judgement before taking that leap into home ownership. Basically, at what point do we assume resposibility for our own financial situations? Lenders and credit card companies are extremely agreesive and are becoming more so everyday!

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Will Profit

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Will Profit
Posted June 17, 2008 (07:25AM)
Ahhh, mi bella dolcevita, What impetus is there for the consumer to take responsibility when our financial institutions are on the Government dole as the result of their financial irresponsibility?
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corbinb2

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Posted June 17, 2008 (09:01AM)

It comes down to a matter of trust of you ask me. If I know without a doubt that I have LOUSY credit and have half a brain, I'm not going to kid myself that I can get a loan or a credit card or heaven forbid a mortgage, so won't even try. However, what if the BANK TELLS ME I can? Certainly they would know better than I would don't they?

 

This is the crux of the credit and mortgage crisis we have found ourselves in. The banks bent the rules so that people who did not qualify before, now would. People who though they had bad credit, suddenly could own a home, get credit cards, etc. I am not saying we don't have the responsibility to do our own homework and make sure we can handle the credit we are given, BUT there are a lot of smart people who still got caught up in this mess because the banks said OK.

 

There have been times in my life when my financial situation was not the greatest, and  yet the credit card offers flooded my mailbox. I knew there was no way they would approve me, but how mnay people are tempted to apply, "JUST IN CASE", it's not as bad as they thought? People forget that the banks are a retail business just like everyone else and willdo what it takes to increase profits just like everyone else.

 

We do need to "assume resposibility for our own financial situations", but the banks should also be the last line of defense and say no when it is appropriate to do so instead of bending, no breaking the rules. I may not like to hear no, but it would sure be better than being upside down in debt on a car, house, credit card, etc.

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dolcevita73

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dolcevita73
Posted June 17, 2008 (11:58AM)
It is not only the "just in case" feelings that allowed certain people to get in way over their heads. If one is offered an enormous line of credit, one should first be very sure one can afford the debt. I understand that most of these individuals were offered ARMS. Perhaps this was not explained to the prospective buyer. Many financial institutions did break the rules and did say yes when they should have said NO!  If one can not rely on financial institutions or their government, all the more reason to assume your own financial responsibility. Some of these home owners are facing foreclosure because they lost a bet.........they assumed that raise or promotion would be there before the mortgage payment increased. The "flippers" are in the same boat.....bad gamble! Sadly, some of the buyers were just desperately wanting a home of their own.
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snowman

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Posted June 17, 2008 (04:42PM)
They give everyone way too much credit. Personally I can raise over $200,000 on $50,000 income. No way I could pay that off and my house. Every three months they raise the limits. If I complain they tell me I have to cancel the card, they will not lower it. Bottom line is when they expire I just do not call to validate the new card. Credit still open but they cannot raise the credit limit anymore. If I dump all the cards my score may drop below 700. It would be close?
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UPod

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UPod
Posted June 17, 2008 (05:17PM)
If we were all "Friends of Angelo",  we wouldn't be having this discussion.
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snowman

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snowman
Posted June 17, 2008 (06:18PM)
He is a lot smarter than everyone gives him credit for. He made off with all the banks money, took out a few dumb politicians to take the heat off himself and what do you want to bet his money is no longer in dollars. Unless you are talking OIL.
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corbinb2

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Posted June 19, 2008 (10:51AM)

Interesting point you bring up Snowman on the increases in credit limits. If you ask them to lower the limit they have to do it. You may need to contact a higher authority in some cases, but if you go high enough and threaten to cancel the account if they don't, yoshould get results. If they refuse, contact the BBB and send off a letter to the address of the highest person you can find info for at the company.

 

The other option, as you stated is of course to just let the card lapse or cancel it once paid off. The ironic part of this strategy is that closed lines of credit can actually have a negative effect on your credit. They get you either way I guess.

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dolcevita73

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Posted June 20, 2008 (02:54AM)
Credit card basics.......... Companies look at yor designated line(S) of credit. They then look at how much of that line you have chosen to use. If you have been a good boy or girl and have not taken advantage of their" hospitality" then you are OK. For example: If you have $100,000.00 credit line and your available line of credit is $90,000.00 or $95,000.00 then you are doing ok! The other side of this is you are not making them money if you pay off everything. It is really all very idiotic and tends to make one want to pay cash for everything!
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