Banks hand out cards like candy, then walk away

[byzantium]

http://www.nytimes.com/2008/07/20/business/20debt.html

I always had the intention of paying my cards back, via starting a business. But still, about half of my debt is just daily expenses, mostly food and gas. I am on SSI and it was simply getting harder and harder to make ends meet, and my parents were nearly bankrupt themselves, so I had no choice but to use the cards I intended for startup costs to buy food. I still managed to finance the business before the credit offers stopped arriving. But my debt was double what it should have been. My parents got an inheritance in the meantime, so they paid down most of their debt, and were able to get a loan in their name to pay off the high interest cards. They know what my business plans are and fully support me, at least my mom does. Unlike the woman in the story, I have very little frivolous debt. I did buy a small (19 inch) HDTV, but with the shutting down of analog TV in the US I had no choice. I bought a few other little things, like a small vacuum cleaner. But most of it is either business related or simply daily living. When food and gas are inflating at double digit rates, and your income is fixed, what do you do?

[VIG_Ruddell]

Rant about the article

That article from the New York Times was interesting. It shows how people know so little on financial intelligence. If you want a real eye opener, rent the movie "Maxed Out". In there it talks about how half of Mastercards business is just bankruptcy.

I would love to feel sorry for the lady in the article, but I can't because she brought it upon herself. She is overspending with money she can't pay back. Her expenses are through the roof because of it. But just from the pictures and the article, I can tell that she could cut a lot out of her personal expenses to begin paying back credit card debt and getting on track.

For just a few, she has QVC. You know this because she said that when she is in bed sick, QVC and credit cards are you best friend. She could get rid of cable, dish or w/e it is and get just the local channels. Then she wouldn't have QVC and she would have to find another way to solve her emotional problems. If you notice, she is drinking what looks like a Snapple in the picture. And there is a coke on the table as well. Stop buying stuff like that and use that money to pay back credit cards. I know it doesn't seem like a lot when you buy it but life is a numbers game and it adds up.

And for her health problems, a lot of that could have been brought upon by poor dieting. She is obviously over weight. So she is now spending to much on food because of this and she is ruining her health. If she would of starting a good gym regiment at an early age, her health problems could of possibly been prevented.

So I would love to feel sorry for the millions of Americans in this situation but they honestly bring it upon themselves. But, I'm not entirely insensitive about the problem. This is a national problem and something does need to be done but the problem is that the solution is going to include change which people don't take to very well.

To:byzantium
But for you byzantium, you talking about starting a business and occurring debt when you are going through the start-up. Thats normal. It happens to everyone who is self-employed. But you need to remember that is not how much you make, its how much you keep that matters. Let me ask you this, how much do you have dropping to your bottom line? How much do you have left over after all your expenses are paid? To be successful, you need to keep as much money working for you as possible. That might mean selling your HDTV that was bought because the fact that they are shutting down analog television. Which would also mean getting rid of television all together. Assuming that is what you use your T.V. for. But if you don't and you use it for recreation then I will assume that you might have an XBOX 360 or PS3. So if you get rid of it, you will also get rid of the distractions that waste your time that would could use for productive purposes. But that is just one of the things that you could use to keep more money going to your bottom line. Live frugally for the time being. I don't believe in living frugally but that means you have to expand you income to meet your dreams. Then when you income expands, then get your HDTV with direct T.V. and XBOX live. Do you understand what I'm saying?

Now your already existing credit card debt, use it to your advantage. Its other people money. I am all for using credit cards as long as you use them wisely. I mean just for business expenses. Remember, you can use your legitimate business expenses with pre-tax dollars if your incorporate. But that might also means that you have to get a job in the evening to cover your living expenses, then that is what you need to to. You could work 6 days a week, from 4 - 10 and make a little extra to help you get by while you are starting your business and trying to make it profitable. Then that would give you your days open for productive business.

But hope that helps. Any comments or questions?

[byzantium]

Rant about the article

That article from the New York Times was interesting. It shows how people know so little on financial intelligence. If you want a real eye opener, rent the movie "Maxed Out". In there it talks about how half of Mastercards business is just bankruptcy.

I would love to feel sorry for the lady in the article, but I can't because she brought it upon herself. She is overspending with money she can't pay back. Her expenses are through the roof because of it. But just from the pictures and the article, I can tell that she could cut a lot out of her personal expenses to begin paying back credit card debt and getting on track.

For just a few, she has QVC. You know this because she said that when she is in bed sick, QVC and credit cards are you best friend. She could get rid of cable, dish or w/e it is and get just the local channels. Then she wouldn't have QVC and she would have to find another way to solve her emotional problems. If you notice, she is drinking what looks like a Snapple in the picture. And there is a coke on the table as well. Stop buying stuff like that and use that money to pay back credit cards. I know it doesn't seem like a lot when you buy it but life is a numbers game and it adds up.

And for her health problems, a lot of that could have been brought upon by poor dieting. She is obviously over weight. So she is now spending to much on food because of this and she is ruining her health. If she would of starting a good gym regiment at an early age, her health problems could of possibly been prevented.

So I would love to feel sorry for the millions of Americans in this situation but they honestly bring it upon themselves. But, I'm not entirely insensitive about the problem. This is a national problem and something does need to be done but the problem is that the solution is going to include change which people don't take to very well.

To:byzantium
But for you byzantium, you talking about starting a business and occurring debt when you are going through the start-up. Thats normal. It happens to everyone who is self-employed. But you need to remember that is not how much you make, its how much you keep that matters. Let me ask you this, how much do you have dropping to your bottom line? How much do you have left over after all your expenses are paid? To be successful, you need to keep as much money working for you as possible. That might mean selling your HDTV that was bought because the fact that they are shutting down analog television. Which would also mean getting rid of television all together. Assuming that is what you use your T.V. for. But if you don't and you use it for recreation then I will assume that you might have an XBOX 360 or PS3. So if you get rid of it, you will also get rid of the distractions that waste your time that would could use for productive purposes. But that is just one of the things that you could use to keep more money going to your bottom line. Live frugally for the time being. I don't believe in living frugally but that means you have to expand you income to meet your dreams. Then when you income expands, then get your HDTV with direct T.V. and XBOX live. Do you understand what I'm saying?

Now your already existing credit card debt, use it to your advantage. Its other people money. I am all for using credit cards as long as you use them wisely. I mean just for business expenses. Remember, you can use your legitimate business expenses with pre-tax dollars if your incorporate. But that might also means that you have to get a job in the evening to cover your living expenses, then that is what you need to to. You could work 6 days a week, from 4 - 10 and make a little extra to help you get by while you are starting your business and trying to make it profitable. Then that would give you your days open for productive business.

But hope that helps. Any comments or questions?

I don't play video games. I am actually saving money because before I was paying for cable TV with 80 channels I never watched because analog reception is so poor in the area where I live. However, HD reception is pretty good. I set up an HD antenna and switched my cable to internet only, over the strong objections of my provider.

A lot of my debt was in buying fast food and such. I am on a diet now that eliminates the need for fast food, so my food expenses are way down. I have incurred debt, yes, but my website is almost ready to go, I will announce it properly here. There are very few jobs where I live. I have a 2 year college degree and a computer technician's certification but can't find work. I am in California where the law makes it very easy for disabled employees to sue their employers over trivial violations of the Americans With Disabilities Act, so in response the companies refuse to hire the disabled. People with neurological disabilities (I have a form of autism) find it especially hard.

I watch very little TV anyway, I watched more when I bought the TV but I only watch the local weather report every few days. My TV was cheap to begin with (about $250 for the monitor, $200 for the HD box) so I doubt I could sell them. Menial work is largely the domain of immigrants where I live, go into the burger joints and everybody speaks Spanish. I just don't have a whole lot of options. My parents financial situation is better and they have offered to help with food.

I find it hard to sympathize with the woman in the article too, she admits she shopped to feel better and then found herself screwed from all her debt. I personally hate malls. When I was a teenager I sat home and read books while my classmates were at the mall spending money on junk. QVC and other shopping TV channels drive me up the wall, how people can watch that crap is beyond me. America needs to be financially educated and needs to be less materialistic, but the banks have spent several generations turning us into a shop till you drop culture, and it will likely take several more generations to reverse it. We may not have that long before general fiscal crisis looms. What I hate is that the banks are exporting general indebtedness to the rest of the planet, to places where people would have rather died than gone into debt for many centuries, and suddenly they're being forced to change and become Western style consumers.

[chrispalko]

I agree completely with VIG on this one. And about the doubt of being able to sell your TV, put it on Craigslist, someone will buy it. I wouldn't be worrying so much about TV anyways if you are trying to get a business going. And if you need the weather, use the internet.

I'm sorry about your work situation, but that's just that much more motivation to succeed in entrepreneurship.

Overall, good luck with everything.