What would happen if we all stopped paying

[sisterfunkhaus]

I stopped paying my credit cards in 2005. I made it to 2008 before I got a judgement, we filed BK and never looked back. We will never have a card again. If we can't afford it, we don't buy it. We are down to one car b/c we can't afford to fix our other right now (but will have the money in a month or so.) We are doing just fine with one car and public transit. Our world has not stopped turning. We moved from a big house with a mortgage to a two bedroom apartment, and we LOVE it here. Our world has not come to an end becasue we don't have the biggest and best and newest. We have what we need and most of what we want, and we own it free and clear. It feels so good to be out from under the thumb of credit cards!!!

I honestly think the world would be a better place if the only thing we used credit for was cars, houses, and college. I know our society would take a hit, but we would reorganize and get through it.

[DSIG]

I honestly think the world would be a better place if the only thing we used credit for was cars, houses, and college. I know our society would take a hit, but we would reorganize and get through it.

Actually, it used to be that way back in the 70s, when we actually had savings! The car and house were the only things that were financed. Then the availability of credit creeped its way into our society. If we go back to the basics the banks will be around but they will not be as profitable. Their own greed will bring them to their knees.

If Harvard Law Professor Elizabeth Warren is correct that this situation will devolve into a 2-tier society then the only people who will be worthy enough to have credit cards are the upper class. As the number of bankruptcy filings increase and permeate the mainstream society, the second tier will not have credit. A mass protest is not necessary. The conditions are already being set for this to happen naturally.

It will be back to the basics of the 70s, where we only financed major purchases and paid for everything else in cash or our debits cards.

[PacificBlue]

We are onboard and here's why.

We had an agreement with our CC companies. THEY changed that agreement, and in our eyes by doing so voided our agreement. It's becomes a new agreement and we are not agreeing to it.

[LimpDisc]

I normally don't go down this road, I am not one of these anarchy nuts, but what the credit card companies and banks are doing, and what the government is allowing them to do is really pissing me off and hurting a lot of people.

I wonder what would happen if EVERYONE simply stopped paying (and using) their credit cards? Sort of a mass protest.

I would love to find out!!!

[flyinbroke]

We are onboard and here's why.

We had an agreement with our CC companies. THEY changed that agreement, and in our eyes by doing so voided our agreement. It's becomes a new agreement and we are not agreeing to it.

This is my thought....is a contract really a contract when one party (who doesn't sign a thing on it) can change it on a whim? And if so, how enforceable is it, really?

[Faust]

This is my thought....is a contract really a contract when one party (who doesn't sign a thing on it) can change it on a whim? And if so, how enforceable is it, really?

Excellent question!

[BCA2009]

I love the idea in theory, but if everybody stopped paying for credit cards at once, the economy would tank worse than it ever has and unemployment would skyrocket.

First of all, all of the major credit card companies would go bankrupt (I know, I know, who cares). They would then lay off thousands and thousands of employees.

All major department stores, restuarants, etc, that rely on people using credit to make purchases, would then go bankrupt and lay off many employees.

Then all of the manufacturers would go belly up because the stores stopped buying their product. Yet again more layoffs. Then trucking and shipping companies, Etc,Etc Ect.

The lack of purchasing power would no longer be just due to the rebellion against credit cards. All of the newly unemployed people wouldn't have cash either. So spending in general would slow to a crawl.

Eventually after a long, long depression, we would come back around to the way it was in the 50's, 60's and 70's.

So, I think a rebellion would be worse than the way it is now.

What I would love to see happen is a change in mentally and for people to stop using credit (hopefully after paying off what they owe). A slow transition to savings and avoiding credit would allow the ecomomy to adjust slowly to the decrease in consumption and the fall out wouldn't be as bad.

The bottom line is it is just hard to shrink an economy with fallout. But in the end, I think we would all be much happier.

An economy can only grow if there is increased consumption. The fallacy that we haved lived under since the industrial revolution is that we need the economy to grow. IMHO, I think an very very slowly growing economy would make a much happier society.

But in order for that to happen we would have to give up alot of our luxuries.
If you want to buy a 3000 sf house, three cars, motorhome, boat, 5 TV's, expensive vacations etc, you either have to work your ass off (and have no time to enjoy the toys) or use credit.

The discussion in earlier post's about how things were prior to the 70's didn't mention that most families didn't go on far flug vacations; didn't have lake homes; Didn't buy new gadgets, telephones, CD's, MP3's and so forth every other day. They also didn't eat out 5 times a week or buy designer shoes, jeans and ball caps. I don't know what a $150 pair of jeans would have cost in 1975 dollars, but if I had asked my mom for them she would have laughed in my face. All of my friends had afterschool jobs to earn money because our parents didn't just hand over money every weekend to go blow at the mall.

Now that I've rambled awhile. I'll circle back to part of the original conversation. The ecomomy grows because of increased consumption and slows primarily due to decreased consumption that can be caused by many variables as we are currently witnessing right now.

Over the last 50 years or so our economy has expanded due to two main drivers in my opinion. The first was women entering the workplace. More product being produced, more household income thus more purchasing and more consumption. At this point we could no longer produce more on our own because everyone in the home was working, therefore no more money to buy more stuff. But wait! Enter consumer credit. Now we can buy more stuff without working more. The economy greatly expanded again over the last 30 years. These expansions were also boosted somewhat by advances in technology.

We have finally hit the wall, we can't work anymore because we are already working to the max. In most of our households, I would guess both spouses already work 45 - 50 hours apiece. we now have no more credit so there is really no way to continue to increase consumption. Now we just have to wait for the market and the economy to correct itself.

I didn't mean to be so long winded, this is something that I have thought about often, especially since we have got into the financial situation we are in now.

Just sharing some thoughts......