I just read some disturbing statistics recently - there are millions of credit card holders with millions and millions of debt! Worst still, people are now screaming for the banks to reduce their interest rates for credit cards. Is it a problem with the banks, or us? Or both?
What has happened to spending responsibly? Nowadays credit cards are everywhere, and it's common for individuals to have more than 1 credit card. In the past, credit cards were viewed as a convenient way to pay for goods and items without the burden of carrying loads of cash around (and having a flashboard on your head that says "Rob Me!"). Nowadays, credit cards are being viewed as just another credit line, like a personal loan. If in need of cash, the credit card is here to save the day!
From my point of view there are 2 problems here - credit cards are too pervasive in our society and people are not using credit cards responsibly. Recently, I was offered a Platinum card with the annual fees for the first 2 years waived! This was such a stark contrast to years ago when I was offered a Platinum card minus the perks and waivers currently offered. Go to any supermarket stores, petrol gas stations and you'll probably bump into credit card salesmen offering credit cards with perks that we can only dream of years ago. It's so so easy now to get a credit card!
2nd, credit cards users are not using credit cards responsibly! The onus is on the credit card holder to manage the expenses properly and not to incure giant hills of debt to the point that prompt repayment is no longer feasible (and digging a mile deep hole in the ground for yourself). Searching for flimsy loopholes and convenient scapegoats (a.k.a. the exorbitant interest rates) as a solution is already too late. I do agree that the interest rate is too exorbitant, but pointing fingers at the bank isn't the solution. Do we really need more than 1 or 2 credit cards per individual? Or if we have 6 credit cards, does that mean we have the capability to spend 6 times more than what we previously could?
We should all do our part to avoid another Subprime-like horror crashing down on us. And I'm speaking from experience - I've experienced the pain of overusing my credit cards in the past. I dug a hole for myself, but managed to climb out of it. I guess pain teaches people valuable lessons in life. However, let's not let the pain be fatal.
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Credit card sales people are so darn irritating especially those in the shopping malls. They will chase after you, "youwantcreditcard?noanualfeeplusfreegift".
ReplyDeleteThere was once I was harassed for 15 minutes because I had to wait for Yin How. The guy begged and begged and told me all his sad stories but I still refused to apply for the credit card.
You've contrasted how easy is it to get a credit "now" then "years ago". The difference here is time. But why "then" is harder to get credit than "now"?
ReplyDeleteThe problem of the crumbling financial economies lies on irresponsible policy. They make it easy to "take loan first, pay later, but with interest".
As a result - credit crunch. People can't pay debts, so govt eventually has to buy the bad debts and trash it over. It's basically a waste in our economy.
Partly to be blamed from credit crunch is our regulating body - they have lenient policy towards borrowing. This is not at all for them to be blamed - because the world's biggest economies started it, we're feeling the pressure to continue spending to keep on going.
For me this is a wrong thinking - when greed takes over, we're bound to perish.