Cry Me A River

As clear as our current financial fiasco has become, people still aren’t willing or able to connect the dots on what leads to these types of catastrophes. I’ve read a few articles in recent history about credit card companies lowering credit lines without any warning or cause. Supposedly it’s unfair and an outrage to take someone’s $15,000 credit limit down to $7,000 when they haven’t missed a payment. Of course, there was no outrage when the individual’s line of credit swelled beyond their means without warning and for no justifiable reason. No, we are only to be upset when the reverse happens. In my nearly 20 years as a credit card holder, I’ve consistently had credit available to me at amounts well beyond my repayment capabilities. As a poor college student I managed to ‘earn’ up to $8,000. Right after graduation, when I was struggling to make ends meet in the real world, my credit limit was around $11,000. Fast forward to now, as a stay-at-home mom with no reportable income, my credit line is $20,000! If I didn’t have the good sense not to spend what I don’t have, I’d probably have to consider selling a kidney or something.

Get with it people! Credit card debt is the next bubble waiting to burst and rain its debris all over our already soggy economy. Credit card companies have surely witnessed the demise of mortgage companies that extended credit beyond realistic means. Not acting and reducing their risk before more credit that can’t be repaid is gobbled up makes sense.

The average credit card debt of American citizens is already staggering and capable of being problematic. With so many Americans struggling right now, it stands to reason many will be tempted to use their credit cards as a social assistance program. Available credit will be used and if it needs to be written off in bankruptcy, so be it. I’ve actually lost sleep over the past few days processing this inevitability in my mind.

There isn’t much I can say about credit card companies that is positive. I despise them. I am relieved to see them taking some action to reduce the pending disaster.

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