Getting the Mail Can Be A Risky Business

Today I went out and got the mail and discovered I'd recieved a check made out to me for $6,000.00. All I had to do was deposit it and it was mine to spend. This happens all the time and I'm sure it has happened to all of you. Of course, I shredded it as the attached financial disclosure indicated the interest rate was 98%! But can you imagine if someone got that check in the mail who was desperate for money to pay bills or wanted something that they ordinarily couldn't afford. The temptation to cash that check would be staggering.

Along with the $6,000 check there were three credit card solicitations offering guaranteed acceptance with credit limits of $2,500 to $5,000. Of course the lowest interest offered was 29%. In the first quarter of 2010, according to the marketing intelligence firm, Mintel Compermedia, total credit card direct mail solicitation volume was 1.2 billion pieces! This is an unconscionable abuse by the credit card industry motivated by greed and a reckless disregard for their customers' well being. At a time when interest rates are ridiculously low and banks can get all the cheap money they want, they shouldn't be trying to fleece the American consumer. Unforturnately, credit card lending is so lucrative they can't help themselves.    

So, I tell my clients they shouldn't feel guilty about filing bankruptcy as they have been lured into this credit trap by greedy lenders who care nothing about how predatory lending hurts the people who get caught up in it. When they lure people into buying things they can't afford they reap big profits but are unsympathetic when their customers lose their job or get sick and can't pay the bills.

These finance companies, payday lenders, banks, and credit card issuers will turn on you the moment you get behind on a payment. They'll call and harass you, send you threatening letters, and destroy your credit without giving it a second thought. I see this everyday and it sickens me. I got so angry one day I wrote a poem about it one night.  It's called Plastic and you can read in my novel, Plastic Gods, A Rich Coleman Novel, Volume 2.

So, when you go out to the mailbox marshall all your strength and will power, and do what I do, immediately shred any credit card applications or preauthorized checks that you find. Also, look in your credit card bills and shred any unsolicited checks that they slip into the bill so they won't be a temptation in the future. You have to be vigilant to avoid the credit trap, but you can do it!

The Speech I Never Gave

A young man came up to me at a book signing yesterday and asked me if I was the one who had written Plastic Gods. I acknowledged to him that I was and he told what a great book it was and how much he'd enjoyed it. My signing had been a little slow, so it lifted my spirits to find out my book had meant a lot to this young man. As I stood waiting for the next person to stroll by, I thought about my own high school days decades earlier. Being second in my class at Buena High School I was asked to address my fellow graduates. At the time I was lacking in experience and the wisdom experience brings. I didn't really know what to say, so it turned out mediocre at best. I sighed, wishing I'd of known then what I knew now. Then I started to formulate in my mind what I would have said to my fellow classmates had that been the case.

Fellow seniors, I stand before you today to warn you of a great peril that you will face the moment you step out into the world on your own. It's a danger that will threaten your health, your happiness, your marriage and even your very freedom. The reason this risk is so dangerous is that it is perfectly legal. There are no laws to protect you, no warnings from family and friends, and you won't know that you are a victim until its too late.What I'm warning you about today is the credit trap—the lure to buy now and pay later, to live above your means, to accumulate possessions of every sort that you don't need. It's an unfortunate fact of life that our economy is driven by credit and you will be expected to do your patriotic duty and help drive the economy forward. This pressure will be manifested by a deluge of credit card applications, offers of financing for new fancy cars, a barrage of advertising trying to lure you into buying expensive home, clothes, cosmetics, travel packages, you name it.

You won't feel any pain the first few years after you fall into the credit trap. You'll be enjoying everything you've purchased on credit. Minimum payments on credit cards are low and you can draw on your credit cards or credit line if you come up short. It won't be long though until you'll find yourself in serious trouble. Lets say you have $50,000 of family income. If you did a budget you'd discover that you were probably spending $70,000. That means you're going in debt at the rate of $20,000 per year plus interest.

Interest at first may be reasonable, but the first time you miss a payment it will be jacked up to 28% and every time you go over your limit or make a payment late you'll be charged outrageous fees in above this high interest rate. Soon, in addition to your car and house payment you'll have credit card debt exceeding your car and house payments combined. You'll live with this as long as you can, borrowing from Peter to pay Paul, but eventually it will be too much and the only way out will be bankruptcy.

It's an established fact that financial stress is the leading cause of divorce. After a few years when creditors start to call, your credit goes in the dumpster, and it gets difficult to even pay basic bills, you'll start blaming your spouse, arguments will ensue, and love will turn to bare tolerance. It's very common for bankruptcy to be followed by divorce. Some law firms ofter a combination package, bankruptcy and divorce all for one low fee.

So, you've been warned. Don't fall into the credit trap. If you do, at best you'll lose your financial freedom and at worst you'll end up alone in the bankruptcy courts. Don't live above your means. The only credit you'll ever need is for a house, a car and perhaps your children's education. Pay cash for everything else.

Now here's my final piece of advice. If you follow it you'll never experience the tragedy I've just described. When you get your first job and go out on your own, prepare a budget and follow it no matter what. Change it whenever your income changes, and put in a budget item for savings. Ten percent is the amount you should save each month. Do this without fail and you'll preserve your financial freedom, greatly improve the chances of having a successful marriage and go a long way in insuring your future happiness and well being.

That's the message I wish I'd of given my fellow students back in 1969 or I wish someone would have given me. I fell into the credit trap just like millions of other American's have done over the years and suffered greatly on account of it. It's only been in the past few years that I've managed to escape and become debt free. I wrote Plastic Gods as a way to communicate this message in a manner that would be entertaining but still effective. The young man I met tonight wasn't the first person who's thanked me for Plastic Gods, but it felt good to know someone had benefited from my work.

 

Buy Plastic Gods at Amazon.com.