So what if there were never any CC's?

[pcn]

I see so many posts start off "I/my spouse lost our job; we thought things would get better, so we lived off of cc's for "x" months. Now we are $xxx,xxx in debt and have to file." There are many other scenarios as well. My thought/question is - what if there were no cc's for these people to fall back on? Would they still be filing now? Or maybe worse, what does that say about our country? What would have happened to these people? Would people save more if they knew they didn't have the "cushion" of a cc? It seems like our parents and grandparents did. I am definitely not saying that I believe cc's are at fault. I believe we are all responsible for our own decisions. Poor planning is what put many of us where we are today. Yes, circumstances beyond our control affected some, but many of us were happy enough to live beyond our means, or get sucked into the lure of the better life that cc's allowed. So back to my original question, what do you think would have happened, had cc's not been so readily available?

[MC9199]

Credit cards can help maintain an illusion that you can rely on yourself when times get bad. Just pay them off when things get better. Maybe that can work if the debt is an amount that you can pay back within a year, but as we all know debt snowballs.

The big problems are lack of savings, the high cost of essentials and the decline of the extended family. At one time, if you lost your job in the city, you moved back to the farm if you didn't have savings to carry you over. Nobody saves any more because we want too much stuff and basics like housing, food and utilities eat up too much of our budgets.

So I think you are right -- people would save more without the credit card cushion, and would be more sensible about spending.

[logansdad]

In our case we bought a condo we could never get rid of we tried to sell it for 5 years now, we rented it out but we lost 3k a year. The taxes are insane and when My renter moved out we couldn't even come close to getting what we were for rent so we decided to let it go. Under the advise of a family member they suggested BK to seal the deal so the HOA couldn't put a lien on our other house. then it seemed like that same week Chase and BOA stuck it to me I came home to letters stating that the credit limit was lowered and the interest raised.I then had enough and visited my local attorney for the 0% settlement program.

[JRScott]

Credit Cards initially arose to service the wealthy. Their original function was that you could avoid carrying large sums of cash and then pay the bill at the end of the month. That was the idea in the 60s when the Diner's Card became the first real credit card. Used in such a fashion they were a good tool for the upper middle class and upper class allowing them to avoid the dangerous habit of carrying large sums of cash and still allowing them to enjoy what their incomes could afford. (Prior to this various merchant cards had existed as early as the 1920s but they were specific to one merchant, the Diner's Card was the first you could use at multiple businesses....though the idea dates back to the late 1880s.)

Companies got greedy they noticed that folks would allow them to charge interest if they allowed them to carry a balance. So they started lowering the income requirements. Folks of upper lower and lower middle income slowly got credit cards towards the mid to late 70s. The first set of bankruptcies caused by these could be seen in the mid 80s. The lower the income requirement the more folks could get a credit card and the more folks would keep a balance.....in essence it was a scam.

It is no different than the Subprime mortgage crisis. If you are making less the upper middle class income, in essence you shouldn't have any credit cards. If you do have them its just like the subprime mortgages you got something you really couldn't afford.

Prior to the rise of the Credit Card and various government 'safety net' programs when times got tough your family took care of you or your neighbors, folks looked after one another and they did just fine. No they didn't have the latest gizmo, or new fashion but they had their needs taken care.

[pcn]

Thanks for the thoughtful responses. Much to think about as we work through all this. I'd like to say "No more credit for us ever!", but that's too easy and just sounds too much like a child who has been caught doing what they knew they weren't supposed to be doing - "I promise Mom, I'll never do THAT again." Hopefully there is a middle, safe, responsible, ground. Probably something near a secured credit card. We'll just have to see.

[JRScott]

You're welcome.

What I'd suggest is at first don't rush to get another credit card. Instead build up an emergency fund. If you note something needs to be replaced or repaired in the near future budget in that expense over the course of time you expect it to be needed.

It is hard to avoid all debt though especially for mortgages, but in essence everyone could live without credit cards if we learned to live within our means. You could get a debit card with the VISA or MasterCard logos and use it for online shopping where it would come out of your account automatically.

[momisery]

First off I think the "American Dream" was that your children would live better than you did. Partly thru education, and partly thru the economic growth within our OWN country. Growing up with 7 kids we bought a TV in 1955 which was about the same time as most had one, we had a washer and dryer, dining room furniture, all kitchen items including the toaster an much desired huge SunBean Mixer. While we did not have a lot of decorations here and there thru out the house, we were taking care of a total of 9 people on one income and Dad managed to save enough to buy a farm, then cattle and equipment. What is wrong with American is that we have lost our incomes as those at the top try to get richer and richer, and as other nations try to build themselves at the top without providing the incomes for their own citizens to buy the goods they produce. Slave labor buys little, like in China they rely upon us to buy. CC and extended credit terms on home and car purchases were all part of keeping us believing that we were still "doing it", living the dream and building a larger dream for our kids. Believe it or not with 7 kids we all ate very well, dressed just fine, and bought a new car every three years on ONE income. Dad also bought a boat kit and a motor and we went to the lake sometimes. I do attribute part of it to him buying the farm and the income we produced by running it while he worked in the shop, and my step mother going to work. But all in all today rarely do you see 7 kids in a family with the Dad being a factory worker/farmer...they would never make it. True we did not go the to DR or DDS unless we HAD to, but when we did it was affordable. I was in when I was 7 for two weeks and Dad paid for it because he had 80/20 insurance and only paid the reasonable 20% he was not paying for premiums at all, and the company had a company retirement plan so he was not forced to try to do a 401K or something. Today, families are smaller and both parents work and we still need credit cards, and extended credit. It says to me that someone is getting very wealthy off of the rest of us, and the American dream is a house of cards for the next generation.

[lindsay2181]

What if there were never any CC's? Then lots of us wouldn't be in this mess, that's what! Of course I believe we are all responsible for our actions, but if credit card companies weren't targeting 18 year old college students with offers left and right, sucking them into a vicious cycle that they are too young and inexperienced to know how to walk away from....well things would probably be a lot different. That's what happened to me. I went off to college, got bombarded with credit cards offers in the mail, they looked tempting, I'd use them to pay for school books, clothes, groceries....my student job didn't bring in enough money to pay the balance in full every month and before you know it I had several maxed out cards. I lived and learned. After finally becoming an "adult," I wished I could go back and tear up those offers instead of signing my name on the dotted line and letting them do me a "favor" by offering me a line of credit. But I haven't charged anything since and as much as I struggled to pay the balances down my efforts just weren't getting me anywhere.

[momisery]

Lindsay, adult or child this one caugh many off us of guard. I have never been late, never bounced a check and our credit was close to 800! We were on top of the world. When hubby lost his job, and then got sick we thought the responsible thing to do was use our savings and our retirement thinking it would all turn around. Then Dad had surgery so we had a trip to make for that since he is 90 it would be the last visit. If you have simply always supported yourself, always paid things you do not expect to not be able to do it AGAIN! The facts are now that hubby is too ill to work like he did, so we have one income and while we paid a lot of bills off new onces replaced those bills with healthcare and dental. The job just never came back and never will, so we did what we have to do to survive. Without the Credit Cards and Credit line, we would have gone down much faster, so is that better? I don't know the answer to that. I don't even know if we will make it because you never know the future. When they say business owners or investors take all the risks and they deserve to make more I have to disagree now. We all take a risk counting on each other for a job, for food, for care.... just some of us make enough that we can save enough so that nothing touches us, and others do not. If you work hard and you try really hard that is all you can do in the end.