why so much concern for individual credit card debts?

4 Apr

london 9.16am 12.6C cloudy 2017

this morning i read two, here, and here, articles about increasing household debt and saying it is a bad thing. one of them is a comment on the main article. they liken it to the mortgage scandal in america where poor people were given mortgages to buy homes that they cannot afford the premiums.

but this is different, i think. it is credit card debts. the amounts owed are not as big as a mortgage to buy a house , which is likely to be in the hundreds of thousands. and when someone who has a mortgage cannot pay it, the whole amount is lost, when they default, with the banks unable to resell the house or if it does it is at a huge loss.

but it is different with credit card debts. for one thing the debter can just pay the minimum. it can be as low as £5. so they end up paying a lot of interest but they dont go bankrupt. the bank need not write it off as a dead loss, and it does not come up in the banks bottom line. 

so i fail to understand why they are concerned about it. each individual debtor will suffer , but only that they are forever having to pay interest on it, and never reduce the debt… but as long as that person keeps his or her job, they should be able to service that debt, by paying the minimum. but the economy will simply go on. these individuals wont affect the economy.  even if they dont continue spending, which is not a given, there will be plenty of others who will spend on their credit card. the only thing i can see that will stop the economy is if everyone becomes like me, who dont spend at all….and we all know that will never happen. 

added. i just have a thought. i wrote the above with the idea that the economy will not suffer even if household debt is very high. but i just thought the individual will suffer… until i realise hang on, not so. 

take this scenario, you are poor, existing on income support, and if lucky your accommodation is paid for by housing benefit. so u start getting lots of credit cards, and u spend, spend spend. haha. and only pay of the minimum £5 every month… ok, now your debts increase , added by interest . well, so what. haha. u just continue to spend, and just pay the £5 minimum. this can go on for along time, till u build up substantial debt of maybe 60,000 . you can then get cards that offer u free interest and start juggling it , paying off one, and then when that interest free period is over, use another card with interest free period to pay that off… just go on doing so until u die. hahaha. you might say that is not going to happen, what bank is so stupid to let u do that. well actually my friend , john, who is staying with me on a visit from america where he lives told me his ex boyfriend did just that. the guy got aids, and have built up substantial debt on a range of credit cards, juggling them… and he died owing huge amounts. what i am saying is u dont even need to have a terminal illness. 

you can be healthy like anything and still this strategy will work. lets say finally the banks got wise to u and start stopping the card and sending u letters. well they are only letters, you can bin them straight away and laugh. then they send in the bailiffs, well so what , u got nothing anyway. and all the stuff u bought are either sold, or old, or broken or given away. hha. 

what can the banks do now? nothing, it is not like the old days when a money lender can send round thugs to break your leg, is it? hoho. so u are sitting pretty and the debt piles up. then one day u decide right i think it is time to declare bankcruptcy. so u scrape up the money for it and get to be declared bankrupt. well that gets the banks of your back. haha. and after what 2 yrs? 3yrs u are out of bankruptcy ready to start the circus all over again. what a lovely life , dont you think?

added 10.38am thursday 6.4.17 10C sunny. i just read this article about more women than men are in credit card debt, and read the comments, such a lot of them, and saw one that said his ex wife changed her name by deed poll,  even though she is a declared bankrupt. and so carried on getting credit cards. 



3 Responses to “why so much concern for individual credit card debts?”

  1. Sarah M Wednesday April 5, 2017 at 12:00 pm #

    Bankruptcy lasts 7 years, where you can’t own property or run a company or have any kind of credit. I knew a couple teaching in China whilst they waited out their bankruptcy period.
    When I was younger I thought I’d discovered the secret to never having to work again and I could just pay off one credit card with another and so forth. It works for limited time. But certainly if I knew I were towards the end of my life……

    • alifesgayventure Wednesday April 5, 2017 at 12:06 pm #

      oh, 7 yrs… i thought i read somewhere it has been changed to less years. it does not matter really to my hypothetical wiseguy. he is hardly likely to run a company or own property. it just means he has to wait longer to start his spending spree again. haha. i think they do allow u some income to live on, but he is on income support anyway so i cant see they can get much out of him.

      • alifesgayventure Wednesday April 5, 2017 at 1:20 pm #

        i googled it how long does bankcruptcy last…
        You can apply for personal bankruptcy – a court order – if you are unable to pay your debts. Bankruptcy usually lasts 12 months, and when you are discharged you will usually emerge debt-free. But certain debts cannot be written off, for example court fines, benefit overpayments and student loans.
        that 7yrs u mention may be actually 6yrs
        Bankruptcy remains on your credit file for six years, which means you will find it hard to borrow money during that time.
        seems to me there is nothing but pros to declaring bankcruptcy for someone who is on income support and does not own property or anything anyway
        says a lot more about it.

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