- In the Sunday June 19, 2005 edition of the BUFFALO NEWS
(pg. B9) was an article entitled FED MAY TIGHTEN CREDIT CARD RULES. This
article verifies what I stated about credit card debt in my white paper
WILL YOU SURVIVE THE COMING FINANCIAL CRASH? -- namely that credit card
DEBT has gotten out of hand in this country.
- In the chart that accompanied the article, which was
itself entitled SWIMMING IN CREDIT CARDS, the following disturbing information
was imparted to the reader:
- 1. Americans used more than 650 million credit cards
and charged more than $1.7 trillion dollars in 2004 alone!
- 2. 1n 1990, there were 281.5 million credit cards held
by adults in the USA. By 2004, this has increased to 657.5 million credit
cards -- this is an average of 3.13 cards held by each adult in the USA!
- 3. In 1990, there was $338.4 billion dollars charged
on these 281.5 million credit cards held at that time. By 2004, things
had changed considerably. The credit card charges in just 2004 alone were
$1.67 trillion dollars total on 657.5 million cards now in practically
everyone's possession. In today's world, credit cards are ubiquitous.
- 4. In 1990, the total credit card debt per household
was only $2,966.00. By 2004, things had also changed considerably. The
total household credit card debt has risen to $9,312.00 -- which TRIPLED
during that decade and a half!
- 5. Perhaps most disturbing is what I am about to tell
- MAKING THE MINIMUM PAYMENT ONLY on $9,312.00 OUTSTANDING
CREDIT CARD DEBT:
- a) Minimum monthly payment (2% of balance due) = $186.24
- b) Time to pay off balance at 16% interest = 43 years,
- c) Total interest paid on $9,312.00 = $17,953.44
- d) Total repaid to credit card company = $27,265.44
- NOTE: With interest compounding -- the 16% APR suddenly
becomes 192% !!!
- HERE'S THE BOTTOM LINE...
- These figures confirm what I discussed in my white paper
entitled WILL YOU SURVIVE THE COMING FINANCIAL CRASH? -- and this is but
one method among many in which typically dumbed-down Americans are taken
advantage of time and time again.
- The Federal Reserve is looking toward tightening their
credit card regulations because record numbers of people are now having
trouble paying these bills --- they are in so far over their heads. These
people are not doing this to be nice to those who hold one of their credit
- They don't slip that noose around your neck to let you
go at the last moment!
- Remember that, will you?
- © 2005 The Kentroversy Papers
- From Jim Mortellaro
- The man speaketh truth. There was a time when I owned
every credit and charge card known to mankind. Every one. Further, I owned
multiple VISA and MasterCards from various banks. I used them all and got
myself in debt to the tune of about $15,000. This was a long time ago.
It took me three years to pay them all off. Three years, not 5 years. But
in the process, I learned one heck of a lesson.
- I learned that I was irresponsible. I learned that the
use of such cards was a lot like gambling, something I never do. I very
rarely drink. Well, I did get pretty blasted on a few occasions, but never
made a habit of it. But it's easy to become addicted to credit cards. Just
get 'em and charge 'em.
- How I paid them off in three years is another story.
It was hard. Since that time I acquired only one charge card. That's the
Amex type card, where the bill absolutely, positively must be paid in full
at the end of the month. Today I own a VISA and MasterCard, but in my business'
name. In fact, each of the three cards is in my business name and the business
is a PC, Private Corporation.
- The issue of credit card abuse is interesting because
whilst it is the fault of the individual (in getting himself in difficulty)
it is more the fault of the credit card company. Card companies used to
send you credit cards pre-approved. Now, they must send you a letter and
application which may also claim to pre-approve you. All you have to do
is sign on the dotted line and they send you a card.
- People somehow collect these cards as if they were kids
again and the cards were cher baseball cards. Gotta have more and more
and more. Hey, you never know. One day you come to realize that you've
gone way too far. You are now hooked and there is no way out. You've maxed
out on all your cards and can't use any of them or go belly up.
- When that happens, time to go to a nonprofit organization
and get them all paid off and ripped up, destroyed.
- Today, I am debt free. I pay cash for everything. On
those rare occasions where my check is not accepted or cash is impossible,
I use a charge card and pay the bill by check by phone BEFORE I get the
- This has become an addiction too.
- When those letters come in saying you've been pre-approved,
rip them up. You don't need or want another card. If you're like me, you're
OK to spend what you can afford on the cards, paying the ENTIRE bill at
the end of the month, then do keep one or two, which is all you need. But
if you are like me the way I was and the way most Americans are these days,
dump the cards. DO NOT CANCEL them. Just destroy them.
- Canceling the card may damage your already soggy credit
rating further. Rip 'em all up and pay the annual fee for the card. Eventually
the credit card company will discontinue your card anyway for lack of use.
- Remember, you don't have the money ... you don't buy
it. You have the money, pay by cash.
- Do that long enough and they'll hound you to acquire
THEIR cards. Tell them Morty sent you. They'll understand. Heck, they knew
me quite well.
- There's one born every minute. Don't be one.
- Jim Mortellaro