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The ease with which huge amounts of credit are given to people who clearly shouldn't receive it is quite scary. When I was 18 I had a decent enough job as a fle

The ease with which huge amounts of credit are given to people who clearly shouldn't receive it is quite scary. When I was 18 I had a decent enough job as a fledgling software developer making above average for my age but still not great. My car broke down and I decided to get a new one and as a stupid 18 year old with access to some money and credit I of course set my eyes on a nice shiny, new off the lot, convertible. $20k in debt later I drove off the lot. And they were nice enough to throw in a brand new Bank of America credit card with a $10k limit on it too! It of course didn't take long for me to nearly max that out and end up with a crash course in credit that I wish I'd had beaten into me years earlier or that I was smart enough to figure out sooner. At 18 and making around $35k pre-tax I already had close to $30k in debt and the scary thing is that that situation lead to me getting bombarded with mail offers for more credit cards (including many different Bank of America cards) that I was supposedly pre-approved for. Now that I keep very little debt, besides my mortgage my 2 open cards have a balance of $0 on them 6 days out of 7, I get basically no offers. Education would go a long way to preventing what happened to me from happening to others but I can't help but suspect a healthy dose of tighter regulations, or restrictions, or ... something, should be put into place too. I now know I was a stupid kid who made stupid mistakes. I've also learned from them. But I was also someone in one of the few industries that's still growing and was able to recover fairly easily and never really felt any pain from it. The average person isn't that fortunate.

themartorana 12y ago
There is more money in the gullible than the educated. When you have some computer program that controls your snail mail output, it's very easy to mentally justify the distance you put between yourself and the advantage you're taking of the poor and downtrodden. That's where most of this lies. If you look at sleazy and then try to find the sleaze, more often than not they're rather separated from the reality of the harm they're actually doing.
brc 12y ago
I'm curious how you weren't more savvy with carloans and credit in general? Was it never discussed by your family? Did you ignore advice? It always seems completely obvious to me to steer clear of financing cars (never had a car loan, ever) yet I see so many others dive right in and end up very poor as a result.
- MrFoof 12y ago
  I wasn't in that far a different situation from OP, at a similar age at the time. In my case, I grew up poor. I did what I did because I followed the advice of my parents and neighbors -- it's what they did, and they hadn't yet been bitten in the ass by it. Thankfully, I didn't get bit either. Fast forward to today where I found long ago (~10 years ago) that getting serious about personal finance is a valuable thing. To my folks I might as well be speaking a different language, but I haven't paid a cent of interest in nearly a decade, and have maxed my tax-advantaged retirement accounts for the past 8 years.
- MichaelGG 12y ago
  When I first came to the US and started making some money the allure of credit was pretty strong. One year later, I had about $100k between amex and my bank. I was on even on track to get an amex Centurion, as I had some side business doing $50k a month on my card. The whole access to lots of cash and the positioning of status is a powerful thing. Even though I'm well aware that it's just a trick to get you to spend "oh, a black card sir, please enjoy some cheap perks that cost you more than they're worth, because you're special". It's lame, but I'm not the only one that went for it. A friend was paying over $10K a year just to have additional black cards for other buddies. On the credit itself while at first I was cautious and against the idea of debt, the moment there's any cashflow issue, bam. I'm rather embarrassed, but without discipline it's easy to get lost. And every time I'd hit the limit, the limit would go higher. WF started off at $3k, and moved to $20k with zero explicit requests from me. If you're living month to month (US health insurance was $1600/mo), a single bump can easily permanently put you on credit. And, WF never approved me for a line if credit or a normal loan, so getting refinanced at a decent rate was more difficult than it should have been. They also wouldn't split the card off so I could just pay down part. In the end, it was my fault for being easily wooed and lacking self discipline. But they make it easy enough to step into and harder to step out.
- icehawk219 12y ago
  It's easy to blame others but what it really does come down to is a lack of appreciation for what debt really is and how it really works. It's very easy to get approved for 3 credit cards each with a $5k limit and say to yourself "I have $15k to spend on anything I want." For someone who has never had access to a lot of money that's a very easy trap to fall into and it's pretty much what happened to me. Sure I had a savings account that was respectable for my age but that's not spending money you carry around in your wallet. In my case credit was certainly not discussed with the family, or amongst friends (most of who reacted the same way I did to their first card), or in school. I've had a job since I was 16 so I understood the value of money but I didn't understand the value of debt until I already had it.

themartorana 12y ago

There is more money in the gullible than the educated. When you have some computer program that controls your snail mail output, it's very easy to mentally justify the distance you put between yourself and the advantage you're taking of the poor and downtrodden. That's where most of this lies. If you look at sleazy and then try to find the sleaze, more often than not they're rather separated from the reality of the harm they're actually doing.

brc 12y ago

I'm curious how you weren't more savvy with carloans and credit in general? Was it never discussed by your family? Did you ignore advice? It always seems completely obvious to me to steer clear of financing cars (never had a car loan, ever) yet I see so many others dive right in and end up very poor as a result.

MrFoof 12y ago
I wasn't in that far a different situation from OP, at a similar age at the time. In my case, I grew up poor. I did what I did because I followed the advice of my parents and neighbors -- it's what they did, and they hadn't yet been bitten in the ass by it. Thankfully, I didn't get bit either. Fast forward to today where I found long ago (~10 years ago) that getting serious about personal finance is a valuable thing. To my folks I might as well be speaking a different language, but I haven't paid a cent of interest in nearly a decade, and have maxed my tax-advantaged retirement accounts for the past 8 years.
MichaelGG 12y ago
When I first came to the US and started making some money the allure of credit was pretty strong. One year later, I had about $100k between amex and my bank. I was on even on track to get an amex Centurion, as I had some side business doing $50k a month on my card. The whole access to lots of cash and the positioning of status is a powerful thing. Even though I'm well aware that it's just a trick to get you to spend "oh, a black card sir, please enjoy some cheap perks that cost you more than they're worth, because you're special". It's lame, but I'm not the only one that went for it. A friend was paying over $10K a year just to have additional black cards for other buddies. On the credit itself while at first I was cautious and against the idea of debt, the moment there's any cashflow issue, bam. I'm rather embarrassed, but without discipline it's easy to get lost. And every time I'd hit the limit, the limit would go higher. WF started off at $3k, and moved to $20k with zero explicit requests from me. If you're living month to month (US health insurance was $1600/mo), a single bump can easily permanently put you on credit. And, WF never approved me for a line if credit or a normal loan, so getting refinanced at a decent rate was more difficult than it should have been. They also wouldn't split the card off so I could just pay down part. In the end, it was my fault for being easily wooed and lacking self discipline. But they make it easy enough to step into and harder to step out.
icehawk219 12y ago
It's easy to blame others but what it really does come down to is a lack of appreciation for what debt really is and how it really works. It's very easy to get approved for 3 credit cards each with a $5k limit and say to yourself "I have $15k to spend on anything I want." For someone who has never had access to a lot of money that's a very easy trap to fall into and it's pretty much what happened to me. Sure I had a savings account that was respectable for my age but that's not spending money you carry around in your wallet. In my case credit was certainly not discussed with the family, or amongst friends (most of who reacted the same way I did to their first card), or in school. I've had a job since I was 16 so I understood the value of money but I didn't understand the value of debt until I already had it.