Banks

I really have had enough. [V] Banks keep advertising themselves as there to help you reach your goals etc and in reality they are all a pack of pricks with no concept of community spirit or caring for people with the sole goal of leaching money from people. (NB the people who work in the banks are generally nice, it is the organisations themselves I am grumpy with.)

My late teenage stepdaughter has gotten into money troubles. While it is her lack of budgeting skills and love of shopping that has got her where she is, the banks have aided and encouraged her by offering her credit cards, low interest loans, overdrafts etc - to a young woman who is on the minimum wage and has only just got a 40 hour per week job (previously 30hrs approx.) Then they call up and talk about collection agencies and repossessing cars and bad credit ratings. WTF do they expect - they even have her bank records showing that she is ALWAYS at $0 within two days of payday. Yet they kept encouraging her to take more and in fact actively offer her more.

People would be outraged if an organisation went around offering alcohol to alcoholics or drugs to drug users, yet we seem to condone what banks do - offer money to struggling people until they get in to trouble then piously say "Well it is your fault for not managing your money better - you should have stopped where you could still afford it." Where is the social responsibility in that? Why was there never anyone who sat down with her and went through a budget or anything? Or even talk about consequences with her? We did, but didn't know even half the story (the extent of her borrowing) until last night.

We are not rescuing her, but are helping her get a plan into place to slowly get back on an even keel. She will be OK .... this time. Hopefully she will learn from this experience.

Meanwhile the banks are out there stalking other teenagers/young folk/ people with no assets and luring them into a downwards spiral of compounding interest and debt. And then piously stating it isn't their fault or their problem. I wish keeping my money under my bed was a feasible option.

I understand your point SusanB, and I think its a situation we all find ourselves in if we are not careful at any age.

I don't agree with credit card companies (who are at arms length from banks and not directly involved with them) offering a "pre-approved" increase for anyone, but at the end of the day, its also a lesson we all learn (well most of us do).

I don't think buy now, pay later deals from furniture/electrical companies are good either, but then for some people it works.. as long as they manage themselves accordingly.

I have spent the last 2 years paying off my AMEX card, and only have a few months to go to get it back down to a Nil balance. Its been very difficult, and I am 4 months past where I budgeted that I would have had it paid off, but I am also proud that I am close to achieving my goal and haven't used it, nor had the need to cancel it either to stop the use:).

At the end of the day though, it was me that ran it up, I still am tempted to go out and buy more books and "things" but its self disipline.
I have been down that track that your stepdaughter finds herself in, and it is a major lesson to learn. Now she is coming of age, all sorts of little life delights are going to be thrown at her, and its certainly character building as well... these are unfortunately the footsteps to her future as a well rounded thinking adult.

Good on you for offering her a plan to get herself out of grief. So many don't and then rely on bankrupcy to resolve the problem...

I do agree with you SusanB, and its not just young people, the banks seem to be pushing more and more debt where they can - I was shocked and stunned when we went in asking for a loan of x dollars to get our house started (thinking that would be just comfortably affordable) and they worked out the figures and said, well, actually, you can lend up to 5 times that amount! The amount was scarily high and we would be nuts to take it, but you can see how folk get tempted - after all, if the bank tells you it is okay, they must figure you can afford it!

Student loans also seem to be creating a generation who aren't uncomfortable with high levels of debt at all.

I am glad you are not just bailing her out as she needs to learn, as Swaggie says we all have to be responsible, but I do think the banks' criteria have become so flexible now that it is a problem. Not advocating going back to the bad old days where you virtually had to crawl in on hands and knees begging for an overdraft, but there has to be some sensible middle ground somewhere...

I agree, seems people these days can't wait or save for anything and the banks exploit this to the max, just the other day we got a letter from our bank encouraging us to buy a new car or boat on the mortgage with a top-up. Doubt it, I said, we'll have those things when we can afford to pay cash for them, in the mean time we are trying to pay of the mortgage. It must be really tough for young people these days just learning to manage their money, it would be very easy to come unstuck!

It's a conspiracy to keep us all compliant wage slaves too afraid to leave our jobs/make a fuss/take a risk because of the amount of debt we have to service! [}]

quote:Originally posted by SusanB

My late teenage stepdaughter has gotten into money troubles.

Sounds like it's now the problem of whomever is managing her estate!

Did you mean late in some other sense?[]

LOL Isla - well spotted!! I meant step daughter in her late teens - mind you, the other meaning has occurred to me at times of great stress......

Same problem, the bank keeps upping my sons credit card limit, when I tried to tell them he was on an invalids benefit (they must know this as it goes into their bank) and can't service that sort of repayments they told me he had an excellent credit rating, his payments were always paid on time. Yeh right, because we pay it for him as who can live on an invalids benefit? If your income is $12000 a year how can you service $5000 debt?

Sorry but i am going to be first person to disagree! And i mean really disagree!

quote:Where is the social responsibility in that?

Biggest load of bollocks and codswollop! More like where is the personal responsibility??? Sounds just like another "poor me" story and someone who needs everyone else to sort out their problems which wouldnt have come about if a bit of common sense had been applied in the first place.

Thats my rant over now [] Its just that people not taking responsibility for their own actions is a personal grief of mine and i honestly believe it will eventually cause the destruction of this country, just hopefully not in my lifetime at least!

Yeah Shaun, but....

it's more a matter of marketing. In days gone by, banks would take your deposits, pay a pittance for your savings, and make loans only after a thorough review of your ability to repay. They were being conservative, diligent and by-the-books. Then some sharp, savvy $$-in-eyes MBA types said, "Hey! Advertising is cool! The stores use it to sell more chippies/sodas/sweets and other things that aren't really nutritious but have a Massive Profit Margin! The car dealers use it to pimp their SUVs to urban drivers who never leave tarseal! Howzabout we do the same thing with credit? And we'll push consumerism as the new culture: it's not who you are that counts, it's what stuff you've got!"

And now here we are. Consumer debt spirals out of control because yes, there are loads of people who don't understand simple arithmetic and get suckered by marketing. Is it solely the fault of those individuals, or has the society as a whole failed by not giving them a more jaundiced view of the industry, and by allowing hucksters to peddle expensive money as if it were a cheap bauble?

Judge not, lest ye also be judged....You are right on about personal responsibility, but we need a way to create a culture of frugality in the face of all this marketing. It ain't easy.

One of the best things you can do is DONT bail them out. Infact it is the best thing you can do...
Let the banks try & sort it, too many parents feel so sorry for their kids that they just proliferate the problem. When family stop bailing out the kids the banks may get the message. From what Ive seen & heard 95% of parents bail out their kids Grrrrrrrrrrrr
Kids only (& adults( learn by their mistakes. As soon as you shut the purse & lock it they have got to face their resposibilities, If parents have trained their kids properly & the kids decide they know better, tough love is what is needed.
I know it huts the paernts like hell seeing their kids in trouble but hey thats life & its B tough out there,
For once I have to agree with Shaun, & looks like susan B is doing a great job

I have a job making the bank keep my CC card limit at $1000.00 I only use it for the Internet & always pay before due date, theyre not making any money out of me, I'm using them..

FM - I totally agree it is her fault, but why did they keep giving her more when she was clearly steadily going downhill? If they didn't want people to get over committed and fall over, why do they lend more when their own records show there is a problem? What happened to the days of having to show a decent savings history before going into significant debt?

I hate PC baloney and blaming upbringing for consequences of personal choices too. But the social responsibility I am talking about here is not lending to people who's savings history clearly demonstrates an inability to budget. Why on earth give a big loan to someone who regularly bounces automatic payments? Then a credit card and then an overdraft and THEN create about there being a problem. If they had any community spirit or desire to help people rather than just get more money, they would ask people seeking a loan like my girl, to demonstrate an ability to save for at least a few months before giving them a loan. The common sense that should have been applied in this case is not giving her a credit card or a loan. Under the privacy act we weren't consulted and if we had been we would have said no.

Desert Rat I agree with you entirely regarding the marketing and the push to have it all now. Look at all the places that give you interest free and three years to pay for big ticket items. Only us oldies still go for the 'I like to pay for it before I pick it up' concept. I remember my grandmother saying things like "Tell me what you think you need and I will show you a way of getting along without it". A wise woman, my grandma!

I cannot understand the way that society has bought into the 'I need it, NOW' concept. What is our society looking for? Can't people see that just having stuff isn't going to give them any security or status?

And when theyve got it it really isnt that great anymore

Have a read of a book called 'Affluenza' if you get a chance, interesting stuff.

The reality is that the banks make massive profits on the backs of those who have to pay the fees/OD payments/interest, and the majority of that goes off shore. There is no advantage to them to ensure that people don't get in over their heads.

The reality is that in the 'old days' people got into debt and had problems, but the level of debt was such that most could crawl out over time with care. I doubt the same could be said now with the level of debt that can be easily obtained...

quote:Originally posted by tigger
[
The reality is that in the 'old days' people got into debt and had problems, but the level of debt was such that most could crawl out over time with care. I doubt the same could be said now with the level of debt that can be easily obtained...

I think both my parents and in laws would disagree with you there Tigger, their opinions of debt, whether in the "good old days" or more recent times is still relative to incomes and it was just as hard to crawl out then as it is today.
But then people were private about such matters and embarrassed to admit if they got into trouble. They just went and paid it off as quickly as possible. However long it took..

As a general comment to the topic, and not one directed at the subject or author, I certainly see a lack of personal responsibility in family members who have also obtained vast amounts of debt on unemployment benefit.
I think the last figure I heard was a $50,000 debt between a benefit recipient and her partner who was working p/t at that stage. However I will say that they (and no doubt others) obtained some of that debt fraudently, thus the high figure of debt... and at very high interest rates. I am sure she quoted me 28% on some NZ hire purchase that she "had to have".

She resolved the issue by declaring bankrupcy and hiding liquid assets in a family trust. (which goes to prove that trusts are not the sole domain of the perceived "rich" either).
No intention at all of offering to negotiate some of that debt down...[}]

However until people stop living beyond their means, I don't think the responsibility of level of debt can be placed at a financial institutions door.
Sure they have a social responsibility, and offering increased limits without proof of acceptable income should be an offence, but very equally others have managed to control themselves and spend wisely... we cannot keep legislating to account for the lowest moron's actions in the country.