Long Trip

A middle aged fella yesterday morning ear-bashed me all the way to Penrith about money. How people spend way beyond their means on the never-never thanks to easy credit and poor discipline. He worked as a debt management agent whose task was to restructure bad debt. And surprisingly credit agencies are willing to come to arrangements on the basis that something is better than nothing.

‘People have multiple credit cards’, said my passenger, ‘all paying each other the minimum monthly payment. On paper they think they are in the clear but of course they’re not’. He insisted that purchase schemes granting interest free periods, plus a credit card are the worst traps. ‘By I see them they're tens of thousands in debt with credit agencies constantly harassing them’. One young couple owed $110,000 on credit cards and unsecured personal loans, even racking up $35,000 to pay for their wedding, on credit !

‘In half the cases’ he continued, ‘they are so far gone I advise them to declare bankruptcy. They're reluctant to but once I show them the benefits they accept. The debt is written off, their superannuation is protected, they can keep a car to the value of $6100 and they get a fresh start. Best of all the pressure is off and often saves the family from breaking up’.

If he told me this once he told me fifty times. Okay, he was drunk and happy for the company but money and finance bores me. After attempting to find out his history I gave up when he kept coming back to insolvency. Besides, travelling at 110 kilometres per hour at the end of a shift requires full concentration so I wasn’t fussed, I just let him rabbit on.

On arrival at his home he paid up, shook my hand three times and gave me his card. Don’t know why as he’d insisted his workload had doubled in the last six months. Maybe cabbies represent a high proportion of his business. Conversely, I’d only been interested in whether he had the money for the fare. It was a long, boring trip.

Posted in On the job | Comments (2)

"And surprisingly credit agencies are willing to come to arrangements on the basis that something is better than nothing."

Not suprisingly. The credit companies do quite well. They've got far more to gloat about than your passenger. Those huge debt figures can be due to the accumulation of interest and late fees. Victims of easy credit often end up paying many times more than they borrowed because interest accumulates so fast. You can borrow a few hundred dollars and end up paying thousands in interest before you "renegotiate" or declare bankruptcy. By renegotiating the credit companies just squeeze a few more dollars out of a person they've trapped with their scheme. It's usury pure and simple.

There are two ways to make a profit lending money. Lend responsibly which means only to people who can pay it back at reasonable rates and stop lending if they get in over their heads. Or, irresponsibly which means give them as much credit as they like at high interest until they're way over their heads and can't possibly pay you back - then keep charging them interest until they've paid many times what they borrowed and they finally figure out they've been made a fool of and declare bankruptcy.

Why do the credit companies follow the irresponsible path? Because they make more money that way. The credit companies are doing far better than your passenger.

Posted by: kjsdhglkshw | Dec 8, 2006 9:22:21 AM

Borrow X amount from a "Harvey Norman" no interest scam, recieve a letter offerng a new credit card, use it and pay for all interest you thought was free - even if it is paid off. Money for nothng and your kids education is free.

Posted by: Carl | Dec 10, 2006 12:48:36 AM