My SO got me a European charge card from his bank the other day so that we can use Euros for the coming year from his bank account over there. (This is the year we'll be making about half of our salary for education pursuits).
It got me thinking again about the book that had the 50%Needs, 30%Wants, 20%Savings strategy that I've been using for the last year. Pregnancy has affected my brain, so I can't remember the title, but it's a great book.
Anyhow, the writer's talk about how in the 1950's a person COULDN'T really go over their credit line, and COULDN'T spend more than 25% of their income(or so) on their house and the banks WOULD NOT loan the money for a new car that they didn't think you could afford (using much stricter guidelines than they do now). Etc., etc., etc. Their point was that "fixed" expenses were much much lower than they are/can be today. Hence, many people are in straight jackets because of their fixed expenses.
Back to this charge card thing... SO tells me that I have a credit limit each month, but that the bank automatically takes the payment out monthly and pays the card off in full. He didn't have to sign up for this, they just don't have "credit cards" where he's from, they have "charge cards" like the American Express card that HAS TO BE PAID OFF and if you don't have the money, they revoke the card. That's it. End of story. Is this why Europe has a higher savings rate on the whole than we do? Which brings me to the question at the title of this entry, at what point should financial institutions be held accountable?
Isn't this a little hard on the individuals who borrow this money to be in such financial difficulties? How does it affect a person/family's quality of life if they're in debt up to their eyeballs? Yes, I know, people need to take responsibility for themselves at some point, but that would mean they'd need to be educated as well... kind of like those hazardous messages on cigarettes. If a person hasn't been taught, how are they to KNOW? It took me a long time to get out of debt. What would life have been like if I hadn't gotten into debt in the first place... ? Did it kill me to eat macaroni and cheese dinner 4 nights a week because my house payment and credit card bills took up almost all of my paycheck? Nooooo.... and it's my fault. I just wonder for the rest of our kids, our future, "what if?" What if companies were forced into more reasonable borrowing percentages? And what if credit card companies were required to have higher minimum percentages on the balances owed? The list is endless and this is long. I just got that charge card application in my hand and had to wonder how it is that we're going to compete with the rest of the world when we as a people have no savings.
J
P.S. Contrary 1 - couldn't figure out how to send a private email like the old set-up on the site. I'll keep looking. And baselle... I don't get the emails when comments are posted, but see above. I'll keep looking.
When should financial institutions be held accountable?
May 24th, 2006 at 10:10 pm
May 25th, 2006 at 04:55 am 1148529351
The book is "All Your Worth" by Elizabeth Warren, one of my personal favorites!! :-)
If you want to receive notifications on your email when you get comments: go to Control Panel Main, go to Change my Blog Settings, go to Notifications, check the "notify me when a new comment is posted" box. You will receive notification on the email address listed on your blog settings. Good luck!
May 25th, 2006 at 05:21 am 1148530903
"Will this be on your Kohl's charge card? Do you want a Kohl's charge card? You will save money if you GET A KOHL'S CHARGE CARD NOW... PLEASE! Or something like that. I just want to buy my rug and leave, thankyouverymuch.
This forum has helped me a lot. DH has one charge card with a balance on it, and I have cut mine up. I use a debit card. No money, no spendy. The $20 challenge money has turned into my emergency fund. It's comforting to know it's there.
May 25th, 2006 at 05:40 am 1148532044
I take full responsibility for all my financial mistakes. I have no one to blame but myself.
Sorry if this is not a popular idea, but no one forced anything on me.
May 25th, 2006 at 05:43 am 1148532222
I have comments turned on in my blog. Make a tasteful comment in my blog and I can pick up your email that way.
May 25th, 2006 at 07:47 am 1148539630
October 11th, 2007 at 04:30 am 1192073412
Homesomebody: I like your style! Only you can make a difference.