Kurt O’Keefe has written a great article about how someone can get a credit card without income. As I am watching an episode of CSI Miami I am reminded once again of how the credit card industry preys on our children to the point of causing our youth to commit suicide in an effort to escape the debt and prevent disappointing their parents.
Of course you are saying this does not make sense but then it really does not make sense to issue a credit card to someone who does not work and who has never had a job.
Everyday across our nation credit card companies are placing our young adults into debt through college campuses. Credit card companies will stop at nothing to entice anyone into opening a credit card regardless of their work history, their current debt to income ratio or their level of income.
Once the credit card company has their hooks into the individual they encourage everyone to increase their credit limit. After the increase kicks in the new limit is maxed out very quickly. Because the credit card company wants to be your friend they say its okay to just pay the minimum. So now the individual is maxed out on their limit attempting to make the minimum payments and the continue to go further into debt. How is this possible?
Well the truth is that once someone maxes out their credit card the chances are they are not going to make the minimum payment on time each and every month. So the credit card companies reward you with a late fee just to show you who’s the boss. Now that you have the late fee tacked on you are once again rewarded with an over the limit fee. The snowball continues until the credit card company cuts off your account and begins to turn up the heat in their collection department.
The collection department starts out nice and easy and let’s you know that you should head out and take out a loan to payoff your debt to them. Now keep in mind, you cannot pay the debt you have but the credit card company is encouraging you to take out even more debt to make ends meet.
Some will look for a short term fix and take a payday loan just to make the minimum payment. Instead of one snowball of debt you now have two! This type of situation often leads to an avalanche.
When the main credit card collection unit gets tired of dealing with you they will turnover the account to a third party collector. At this point more often than not the gloves come off and the real battle begins. Third party collectors will stop at nothing to get you or your young adult to pay the debt. They will call you every name in the book, they will attempt to strip every bit of pride that one might possess and some companies will go so far as to threaten to take your home, life savings or family away from you.
Now imagine for a moment if you will. Your child goes off to school at the age of 18 -19 years old. Of course they think they know everything, didn’t we all at that age? They are away from home for the first time and are spreading their wings of freedom. Of course they want “stuff” for their dorm and they want to “party.” As a responsible parent you have your child on a budget and their part time job does not pay above minimum wage. Along comes Mr. Credit Card Company and gives them the answer to their prayers, “free money.”
First semester goes well and they are making the payments but low and behold comes second semester and the debt noose is starting to tighten. Then summer comes along the debt noose loosens a wee bit because now your child can work full time and maybe lower or at least manage the debt. Fall semester of the second year begins and your child begins charging again because they worked so hard all summer as there is room on the card to charge. By the spring semester of the second year your child is depressed and they just don’t know what to do.
The debt is spiraling out of control and your child is flunking out of school because they are working two jobs just to make ends meet. The credit card company calls them a loser, the third party collector berates them and calls them a deadbeat and the college professor says that they don’t have the brains to be in their class. At this point the child is afraid to tell you anything because they really do feel like a loser and they do not want to disappoint you.
Their grades are falling, they are not enjoying the best years of their life and they have a credit card debt that they cannot afford with no hope on the horizon. For some this is the straw that breaks the camel’s back and the child feels like there is no way out but to commit suicide. These deaths are on the hands of the credit card companies and the third party collectors but they are preventable.
If you think I am being over dramatic or making this up I encourage you to watch the CSI Miami episode which is based on reality and more importantly watch the Maxed Out Movie which is reality. Maxed Out has interviews with actual debt collectors who very blatantly use degrading behavior in order to collect the debt. These collectors do not care who they hurt or what it takes to collect the bottom line.
Be aware of these vermin and protect yourself and those you love. No matter what age your children are it is never too early or too late to speak to them about debt, credit cards, responsible spending, budget, interest rates and FICO scores. It is time to turn the tables on the credit and collection agency through the power of knowledge!
Written by Rachel Lynn Foley.
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Last modified: October 22, 2012