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You're right but there is a lot of predatory lending. Should people even be able to get a $20K limit on a credit card? How many could ever reasonably pay that o

You're right but there is a lot of predatory lending. Should people even be able to get a $20K limit on a credit card? How many could ever reasonably pay that off? What about payday loans, etc.?

brianwawok 9y ago
So get rid of all of that, and I think you will find the problem remains. You can get paid in cash with no loans and STILL blow your entire paycheck in 2 days. Or you can get paid in cash and STILL save 50% of it in a bank and live in your means. Not that we should not touch predatory lending. But so much of our economy is built on advertising and stuff, just shutting off the loan tap will not fix the problem.
- fjdlwlv 9y ago
  Blowing all your cash is trivially obviously better than running up credit card debt
  - brianwawok 9y ago
    What about a cell phone with a $100 monthly bill? How about $250 cable tv package? Neither are loans. Both are as bad if not worse than credit card debt.
- graedus 9y ago
  Of course that's possible, but I think more people will avoid that if they know they won't be able to afford food the next day. Easy credit is a big factor allowing people to continue making the bad decision to keep living outside their means for quite a long time without directly feeling the negative effects until farther in the future. By then they end up with a hefty amount of debt and their lifestyle preferences are ratcheted up; they don't want to downgrade from their BMW to a Honda, move to a less fancy neighborhood and start cooking more meals at home. They are more inclined to keep scraping by with their luxuries, overburdened by debt service.
  - brianwawok 9y ago
    You would think that logically, but I am not sure research backs that up. i.e. states with very strict predatory loan laws do not have less instances of "cannot come up with $400 within 7 days" people. Happy to be proven otherwise...
- snarf21 9y ago
  It won't get rid of everything but I think it would help a lot. You'll max out a $2K limit way quicker than a $20K and you have a chance of recovering from that. I liken it to parenting. You can't take a stance that your kids make no mistakes as teenagers, the best lessons are learned the hard way. What you do want to do is make sure they make small mistakes so they can learn without ending up in jail, pregnant or on heroin.
khedoros1 9y ago
I'd still like to be able to get a $20k limit on my card. In another comment, you proposed a $2k limit; I go over that nearly every month and pay it off before the due date, as part of my planned and expected monthly cash flow. The problem that I see here is that I was never forced to prove my ability to pay my debt, and the limit isn't raised and lowered to match my current circumstances. I agree that someone who couldn't reasonably recover from $20k in debt shouldn't be given the opportunity to accrue that much. It doesn't do anyone any good, aside from the leeches that make things harder for people in trouble, while purporting to help. I'd like to not be hamstrung by someone else's difficulties, though.

You're right but there is a lot of predatory lending. Should people even be able to get a $20K limit on a credit card? How many could ever reasonably pay that off? What about payday loans, etc.?

brianwawok 9y ago

So get rid of all of that, and I think you will find the problem remains. You can get paid in cash with no loans and STILL blow your entire paycheck in 2 days. Or you can get paid in cash and STILL save 50% of it in a bank and live in your means. Not that we should not touch predatory lending. But so much of our economy is built on advertising and stuff, just shutting off the loan tap will not fix the problem.

fjdlwlv 9y ago
Blowing all your cash is trivially obviously better than running up credit card debt
- brianwawok 9y ago
  What about a cell phone with a $100 monthly bill? How about $250 cable tv package? Neither are loans. Both are as bad if not worse than credit card debt.
graedus 9y ago
Of course that's possible, but I think more people will avoid that if they know they won't be able to afford food the next day. Easy credit is a big factor allowing people to continue making the bad decision to keep living outside their means for quite a long time without directly feeling the negative effects until farther in the future. By then they end up with a hefty amount of debt and their lifestyle preferences are ratcheted up; they don't want to downgrade from their BMW to a Honda, move to a less fancy neighborhood and start cooking more meals at home. They are more inclined to keep scraping by with their luxuries, overburdened by debt service.
- brianwawok 9y ago
  You would think that logically, but I am not sure research backs that up. i.e. states with very strict predatory loan laws do not have less instances of "cannot come up with $400 within 7 days" people. Happy to be proven otherwise...
snarf21 9y ago
It won't get rid of everything but I think it would help a lot. You'll max out a $2K limit way quicker than a $20K and you have a chance of recovering from that. I liken it to parenting. You can't take a stance that your kids make no mistakes as teenagers, the best lessons are learned the hard way. What you do want to do is make sure they make small mistakes so they can learn without ending up in jail, pregnant or on heroin.

khedoros1 9y ago

I'd still like to be able to get a $20k limit on my card. In another comment, you proposed a $2k limit; I go over that nearly every month and pay it off before the due date, as part of my planned and expected monthly cash flow. The problem that I see here is that I was never forced to prove my ability to pay my debt, and the limit isn't raised and lowered to match my current circumstances. I agree that someone who couldn't reasonably recover from $20k in debt shouldn't be given the opportunity to accrue that much. It doesn't do anyone any good, aside from the leeches that make things harder for people in trouble, while purporting to help. I'd like to not be hamstrung by someone else's difficulties, though.