Citibank gets bailed out. I’ve been feeling bad about Citibank. I’ve felt guilty because my credit card balance with that company must be part of the debt that is dragging them under. Actually, I’ve been fantasizing that if Citibank goes under maybe there wouldn’t be anybody left to accept my payments and that somehow I wouldn’t have to make them anymore. If Citibank were to cease to exist, I figured that would amount to a bailout for me! Why wouldn’t that work?
Citibank gets bailed out
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I was actually thinking about this with Wachovia and my student loans. I was beginning to imagine the bailout as something I should encourage, sort of a natural version of the ending of “Fight Club.”
Unfortunately, my mother, who is an accountant, says that the world doesn’t work like this and that even if a bank goes under, the creditors would still come after you.
Kirk, if your student loans are federal student loans, then I’m afraid you’re out of luck even if Wachovia bites the dust. I once thought about (not seriously) financing my education through student loans, graduating, declaring bankruptcy, and then waiting seven years for my credit to clear. Unfortunately, if you owe money to the government, then even bankruptcy won’t set you free (unless you represent a giant bank, then you can apparently do whatever you want and all will be fine).
Funny, I have CitiBank cards too, and had the same thoughts about my balance. I was going to post something along the same lines on my blog, but finally decided that my financial ignorance was so great that I didn’t know where to find the joke.
You guys are carrying a balance on your credit cards? Come on; pay ‘em off and join the company of “deadbeats” like myself!
(my wife used to work for a company that did database searches and software for companies like credit card companies, and the term they use for those who don’t pay lots of interest in the “bankruptcy sticks” is “deadbeats”….no kidding)
Is this what the New Testament is all about. I’m feeling guilty because I use my credit cards to make purchases and then pay the balance off each month. I felt so guilty I decided it was time to pay off the my wife’s vehicle loan I still had with my credit union. If there were such a bailout as you speak for me, I think I’d still feel obligated to pay it off.
Forget Deadbeats, all you guys/gals need to get through your heads that having debt of any sort, yes, even credit cards that you pay off every month, is being in slavery with those debtors. Cut those credit cards up, pay off your debts as quickly as you can, and understand the PEACE that you can have, especially nowadays with all of these economic woes in the world, when you don’t owe anyone anything!!
BAtens @ 6: Your advice to be debt-free is certainly sound, but I find using a credit card, and paying the balance every month, to be quite a convenience. I don’t like to carry a lot of cash, and paying with checks is more and more difficult. There are legal benefits to making purchases with a credit card, specifically the right to dispute purchases if the seller does not deliver what was promised. Also, the bank carries the amount you charge for up to a month and a half or so, at no cost to you. And, my card pays me a 1 1/4 % cash rebate on all purchases. Also, try renting a car or hotel room, or purchasing an airline ticket without a credit card.
Now, of course, if you are the paranoid sort, all of your purchases, and locations where those purchases were made, are on a big computer somewhere…….
Why feel guilty about paying off the credit card at the end of the month? I do that and also get a credit on buying a car. The credit card company still gets 3% or more from the stores.
On the other hand the companies seem determined to get you to charge more than you can pay so they can raise the rates above 25% and own your life. I would not be sad to see all of them go broke.
Right now I’m feeling pretty good. When the banks authorized us for a housing loan that would have taken the majority of our monthly income, we said ‘no’ and bought one at a price we knew we could afford on just one income. Same with the cars. My wife’s a CPA so she uses the system as it is ’supposed’ to be used; not only paying off the balances each month, but having enough on hand to pay off every red cent on demand even if we had no income that month. Add to that having enough to make house payments and live on essentials for six months with no income required. Living below our current means is really very cool! So I don’t feel bad for the companies or the investors who got rich pushing people to spend what they didn’t have. I do feel badly for their employees and for the people whose parents didn’t show or teach them any better. Now, those who made money off their spending want these newly poor whom they created to bail them out. The greed of entitlement among those who were born after WWII continues.
Along those lines, think of your congregations. Most of our churches have volunteers, auxiliary members, contributors who are reaching 80 years old or more or under 40. There’s a huge void in the middle. Gone are the days when churches were run and financed and operated by those in the prime of their careers. Now, it’s the old and the young. Sure, there may be exceptions to this generalization; but look who still wants all the spending (more staff!) versus who’s doing the supporting.
I don’t fantasize about getting out from under my debt. I fantasize about others taking responsibility for theirs.
You’re all just fooling yourselves if you believe you are getting over on the credit card companies with your “getting credit on a new car” that’s dropping in value by 7-8% when you drive it off the lot, having the credit card company “pays me a 1 1/4 % cash rebate on all purchases”, and just having the cc as a “convenience”.
Studies show that when using a credit card and knowing that you don’t have to pay it until the end of the month, you spend 12-18% more a month. It’s easy to throw plastic across the counter to pay for something, but when you use cash or “debit card”, it’s more difficult b/c you know that you HAVE to have the money in the bank or in your hand to pay for that purchase.
I have not indulged personally in using a credit card now for 4 years and it does not “inconvenience” me b/c of the possibility of using a “debit card” for the excuse of “try renting a car or hotel room, or purchasing an airline ticket without a credit card.”. I have taken many trips in those 4 years and the debit card works just as good as the credit card and as long as it has that VISA or MC sticker on the front of it, it is insured by them in the case of theft or loss.
I’m not trying to “make you feel guilty”, but Americans need to understand that credit is NOT LIFE. You can, as they always did in the olden days, earn your keep, put it in the bank, accumulate the money BEFORE you have to pay for things and make sure that it is paid. I used to use cc’s for the convenience factor and the 1% back factor, but understand now that when you play with snakes, they will always come back and bite you eventually. Just go out and watch the documentary “Maxed Out” or the PBS special, “Frontline: Secret History of the Credit Card” and you’ll begin to understand more of why I have gotten to the place I am today in my thoughts.
I’ve already rambled for too long now, but there needs to be a paradigm shift for most people nowadays for the better and that begins by understanding why the need for a credit card is not there.
NO MORE BAILOUTS FOR CREDIT CARD COMPANIES !!!
Actually, we’ve started using our debit card–in this case, one tied to an interest bearing account rather than our usual checking account–whenever we would otherwise use a credit card (for travel, etc.).
Batens @ 10: That’s fine. There’s nothing wrong with using a debit card. Just know that in most states, unlike for credit cards, you are responsible for any fraud, rather than the bank, unless the bank has a policy to cover for fraud. If there is fraud, or an error, it’s coming right out of your bank account, which can cause all kinds of other problems with other checks, debits, creditors, etc, even if it ultimately gets straightened out by the bank. Also, you do not have the right to dispute charges, as you do with credit cards.
I understand that there are studies showing that folks using credit cards spend more. But we don’t. We keep a careful budget, itemizing each expenditure in our Quicken program, and we know exactly what we can spend each month. For us, the credit cards are simply a convenience and a safeguard.
Glad to hear it, gracious host–and rest assured that I meant my comments in good humor.
On the serious side, it is such a blessing to NOT have something hanging over our heads in debt.
Don @ 12, glad to hear it, but watch your step, the snake is hiding, fangs out, ready to bite. Don’t say I didn’t warn you
BAtens @ 14:
OK, I won’t
Happy Thanksgiving!