posted 10-29-2000 10:17 PM               

I do. At least, I assume I do. I haven't applied for a credit card or made a major purchase in the past few years other than buying my car, but for that I had someone co-sign on the GMAC loan just to be on the safe side. Truthfully, I'm afraid to find out.
And that's my problem with debt and credit: It scares the living hell out of me. It's the rejection. I just can't deal with that sort of rejection.

I have about $20,000 worth of student loan debt and, as of now, just under $800 worth of credit card debt left over from college. It's manageable, but it's frightening, especially on a reporter's salary. Sometimes it seems that the only way out is an honorable death.

But Pattie's right. The key is to know the enemy before you get into the situation, which is sort of my problem. I was never as dimwitted as some of the people that she describes (that number-of-checks-in-the-checkbook thing was a doozy), but I did get into my student loan with not much of a clue. All I knew was that I was going to college and that I'd have to pay part of the bill after I'd graduated.

Now, I'm dealing with a company that doesn't process paperwork in a manner that's even remotely timely, and sometimes doesn't even process it at all. There's not much of an online presence, there's no way to pay bills over the phone, and when I call, I'm commonly put on hold for upwards of thirty minutes.

Here's what I think: The process involved in paying off debt should be comparable in difficulty to the process of incurring the debt. My credit card debt is being paid off at a lightning pace, since my credit union allows me to access all things financial over the phone. Consequently, when I notice that I have a few extra bucks in my account, I pick up the phone and drop some into my VISA, so I'm that far ahead of my monthly payments. If it were that easy with my student loans, I'd be a happier boy.
But no. I've got to send the monthly payment in with the monthly pay stub, via snail mail, and Sallie Mae has to cash the check, which she takes her time in doing. (If they're such sticklers for fiscal punctuality, they should cash the damn check right away). If Sallie Mae would communicate with my credit union, this would be an unhappy memory.

I know - I sound like a big baby. But the simple fact is, I want to pay my bills. It makes me feel good, and it gives me the opportunity to impersonate an actual grown-up. I just want paying bills to be as easy as possible. And I think other folks would agree with me. Nobody likes paying bills, and I'm not talking about the money end of it. I'm talking about the part where you sit down and write out checks and fill out return addresses on envelopes and write little tiny numbers in your checkbook. It's about as exciting as watching dental surgery, or Once & Again starring Sela Ward. And if you're like me, when you're done, you don't feel any great sense of accomplishment.

If we're going to abstract money, let's do it in both directions. Debtors want their money back, and as any child support coordinator can tell you, sending the dogs after someone can only get you so far. Banks and loan servicing companies would be better served by modernizing the payback process and making the process of paying bills as easy as possible.

As a postscript: I think that Pattie and I have initiated some sort of unspoken competition to see who can mention Regis Philbin the most times in any one edition. Really. Look it up.

Another postscript: Regis Philbin Regis Philbin Regis Philbin.

posted 11-06-2000 11:52 PM               

I too think it is important to educate young people in personal finance management. I am creating a new program at the urban university where I work to help graduating seniors in the transition from college life into the post-college world. One of the program areas includes a seminar on personal finance. We will discuss everything from taxes to retirement plans, repaying college loans and figuring out all those deductions on your first paycheck. I am hoping to offer this same seminar to underclassmen in the future. While a small effort, I believe this type of program will help college graduates in that first year on their own.

While the numbers indicate a significant portion of young Americans are in significant consumer debt, I believe there are many young people out there who are learning to manage their finances well and have not abused their credit cards. I know a fair number of twenty-somethings who have already started planning for their retirement by investing in 401 (k), 403 (b) and IRAs while repaying higher education loans.

Again, nice story Pattie.

posted 11-07-2000 06:43 PM               

I love the idea of bringing practical, immediately useful information to high schoolers and early college age students. From what I've seen, they could use it!

I learned much of my knowledge of practical economics from my childhood. I grew up a middle child in a single-parent home. We were constantly short on money (surprised, much?) so I learned at an early age how to budget, balance a checkbook, and "squeeze the life out of nickel better than anyone" you'll have met. Additionally, my mother was divorced from my father in the age of being Mrs. Husbandslastname meant you had no credit history on your own, only as an extension of your husband. My mom didn't have a credit card until a few years after *I* was in college and already had some of my own!

Not a highly recommended way to learn these lessons, I admit. Yet, it was useful information in the long run.

posted 03-19-2001 06:59 PM               

As for me, I can't help but bit a little wary about how these changes will effect people who really and truly need to file for bankruptcy, such as those saddled with enormous medical bills (Hello, health care reform). When I read about much influence the big banks and credit card companies had in moving this bill along, and by influence I mean they wrote the damn thing, I have to wonder who it will really serve in the long run.

Yes, I'm all for people taking responsibility for their spending but, as someone who's written credit solicitations, I think we should also talk about banks taking responsibility for aggressive marketing.

posted 03-19-2001 07:12 PM               

One of the provisions in this bill that I hope stays put is the requirement that credit card issuers tell the card holder exactly how long it will take to pay off their debt if they pay only the minimum balance. Now, if that figure was on your monthly statement, wouldn't you rethink your payment habits?

posted 03-21-2001 01:29 PM               

quote:

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Requires bank regulators to study whether credit card companies are offering credit indiscriminately, without regard to whether consumers can repay their debt, and whether the resulting debt is contributing to bankruptcies;

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They're required to study it. Not necessarily to do anything about it, mind you, but to study it.

That said, I'm hard-pressed to find anything that's particularly onerous in this list of reforms. I'm sure there's more that can be done, but as a start, this doesn't strike me as half bad. I particularly like the increase in priority for alimony and child support debts and the requirement that the declarer of bankruptcy attend a personal finance management training course. Sure would be nice if we could get people into those courses before they declare bankruptcy, but hey.

posted 04-04-2001 01:15 AM               

Seriously, I don't necessarily think it's a bad thing to be aware of how the system works. Lord knows it takes its opportunities to beat you down, if you can figure out how to make it work for you, go for it.

posted 10-02-2001 06:52 PM               

This purpose of this act is provide financial relief for those who are called to military duty overseas. When a member of the armed forces is called to duty the act:

- Bars evictions, when the rented housing costs less than $1,200 per month.

- Prevents default judgments for failure to appear in court in lawsuits and trials.

- Stays civil proceedings.

- Caps interest rates on pre-existing loans - including mortgages, credit cards and personal loans -- to 6 percent (for the duration of the time of service).

This last one in particular has the potential to help many reservists make ends meet at home, especially since most have to forgo their regular salaries in order to receive their military pay (which is usually much lower).

The problem is, while all financial intuitions have to comply if a soldier requests the reduced rate, very few actually advertise the service. It's up to the soldier to be aware of the law and send copies of their paperwork to their lenders in order to get the rate. Now, I know of people who've served in the reserves for decades who have never heard of this Act so it's clear that they are not being informed from the military leadership either.

Bottom line, if you know someone who has already been or may be called to service in the coming weeks, tell them about this act and encourage them to get their finances in order before they leave.

Many Desert Storm soldiers returned from their tours and found their finances in ruins. Some had to declare bankruptcy. That's no reward for serving your country.

posted 12-05-2001 03:55 PM               

Gotta love those lawyers - when the world hands them lemons . . .

For the record, any spike in bankruptcies really hurts small financial institutions like neighborhood banks and credit unions. These, by the way, are the ones most likely to offer low-cost services with little or no fees. It means that they have to find the money to make up for those bad accounts somewhere - either by raising fees or raising loan rates. So, on that note, the banks are right, we all pay for bankruptcy in some way or another.

posted 01-23-2002 01:28 PM               

Sorry, you left that open for me.

Even in a financial institution as small as mine, I see that what happens to all those accounts once they are on the books is someone else's problem. There's a marketing department whose job is to bring in as many new accounts as possible. They let the collections dept. worry about the fraud and the bad (unpaid) accounts. Somewhere in this the CFO makes allowances and estimates for all of it.

Meanwhile, the executives and the lawyers lobby Washington to make sure it's harder for people to file for bankruptcy and soon all their bases are covered.

posted 01-31-2002 04:08 PM               

A credit card company buys a huge list of names, addresses and corresponding credit scores from someone - often the credit reporting agencies themselves.

They set a cut-off point of the lowest score they will accept (this varies widely), ax off anyone below that score, and, perhaps run some internal check on the list to make sure that no one left on the list has defrauded them in the recent past. Then they do one big-ass mail merge in which they laser print your name in caps in twenty different places on an otherwise generic four-color mail piece and send it out - at a special bulk mailing rate, I might add.

posted 02-12-2002 01:50 PM               

My wife checked into this and our horror grew as we read the non-B.S., non-hype fine print at the bottom of the back page of the brochure. Then again, I wasn't seriously tempted to take this bank up on it since I had left them over their seemingly random NSF charges a couple of years ago.

posted 02-13-2002 07:39 AM               

Of course, since my credit union also allows free overdrafts to your savings account to cover up to three transactions per month from your checking - I just use that - and make sure that I keep a little extra in my savings in case I misjudge how much is in my checking. See if you can find a bank to do that and ixnay the high-rate LOC altogether.

posted 02-13-2002 09:28 PM               

It's a worth a look. I use it weekly to do rate comparisons for work and I invariably end up spending more time on the site reading all the articles.

posted 08-28-2002 01:15 AM               

quote:

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It's called "personal responsibility," Karyn. Look into it. Then look into "shame," "shutting the fuck up," and "apologizing to all the hard-working owners of struggling businesses who refuse to resort to this sort of whiny, disgusting pandering to get us out of a tight spot because we aren't five fucking years old." God.

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