Now folks get into debt all the time through no real fault of their own - circumstances can and do change overnight, but this wasn't what had happened to these people. They were simply too stupid to understand that all the money they were spending on tick wasn't really theirs to spend and that they would actually have to pay it back at some point. In one instance a woman owed about £104,000 (roughly $208,000 US) on credit and store cards, which are notorious for their scandalously high interest rates (close to 30% APR is pretty common). She started with one at age 18 and would transfer her debt from one card to another following the 0% APR for balance transfers introductory deals that were prevalent for some years but instead of getting rid of the old card she would simply keep spending on it. She claims that eventually she would get new cards just for the different pictures on them. She also said, in a tone that suggested this excused the whole sorry affair, that most of the money went on her kids (3 and I think about 5).
The spending included for her son: clothes, laptop, digital camera, LCD telly, Playstation 2, PSP, Nintendo DS, DVD player, DVDs, games and more besides. She claimed that her 3 year old daughter had a "shoe fetish" (if so then it was brought on entirely by her) and she had some 20-30 pairs of shoes including those idiotic rubbery crocs so favoured by trendies and other cretins. This for a kiddie who will have grown out of them in five minutes time. So with £104,000 of debt, the minimum payment per month she and her husband must make is £2,000 from a joint income of £3,000. I'm seeing a problem here.
So, what was her line of argument in her defence? "The credit card companies should have stopped me". Now hang on a minute, much as I agree that credit card companies are base, venal and notoriously cycnical in their dealings with the public and that they need to be much more heavily regulated (seeing as they seem to be utterly incapable of getting their house in order on their own), you simply cannot pass the mantle of blame off like that. How can these fucking idiots not take responsibility for their own actions? You didn't have to spend the money you know. But the reporter just nods gravely and sympathetically doing nothing but reinforcing the idea that this gormless woman was the victim in this fiasco (even if he was privately thinking "Christ, what a bloody moron" and I know that this particular reporter is not exactly a thicko). But, sneer as we might at these dopes (and for sure they are deserving of some ridicule), the credit card companies have a huge role in all of this too.
Cue some mouthpiece representing the credit card companies harping on about how the companies are taking their social responsibilities very seriously and how they've signed up to the banking code. Sounds impressive, huh? Well sadly she then went and ruined it by giving the following (paraphrased, as I can't quote it word for word) response:
“This means that, for example, instead of just sending out a letter saying that your credit limit has been increased, we now also say that you don't have to take it which is very important”
Oh well done, that'll really do the trick. In one pithy sentence, this drone has managed to sum up the attitude of the lenders: We really don't give a crap who we lend to because we can make huge sums lending unsuitable amounts to unsuitable people and encouraging them to spend it like water. And the truth is that they can do this with impunity because they are allowed to take advantage of the rank stupidity of a not inconsiderable proportion of the population by a system of regulation so weak it might as well not exist. Why is there no proof of income required? Why is there not a system of cross-checks between lenders to find out who owes what to whom? This woman had a wedge of credit and store cards almost as thick as a good quality deck of playing cards from different lenders (including multiple Barclaycards - how did they not check their own damn systems?). Without heavy regulation there is no way we can protect these idiots from themselves and protect them we must because unchecked spending might look good for the economy in the short term but mounting personal debts along with increasing fuel and housing costs can only lead to bad times somewhere down the road.
I can't claim that I've always been financially prudent, far from it, but spending tens or even hundreds of thousands of pounds on high interest cards with nary a thought about how I can pay it back? No, because I engaged my brain enough to realise that I would eventually need to pay it all off, and pay it off I did. But even so it astonishes me how people can be so cavalier about debt like this.
I'll leave you with this thought. During the programme, the reporter stated that according to some source or other, personal debt in the UK is currently increasing at the rate of £15,000,000 an hour. That's £360,000,000 every single day, although of course that figure does not nescesarily take into account how much is disposed of each hour, how much is merely a re-organisation of lending arrangements and so on, so the net new debt figure per hour may be lower, but still. That's a fuck load of cash.
* Television
Currently listening to: The Curse by Atreyu
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