Month: September 2016

Creditors limiting overspending?

I was reading a blog the other day about a person who was extremely annoyed that his creditor started putting limits on his or her spending. Not because the credit limit was reached but because they caught a series of too many purchases in a very short time and decided that either something suspicious was going on or that he or she was “overspending”. Now realize this may just be my interpretation of it, but this is how it was written:

“People getting denied after finishing a meal.

People getting denied at check out for a hotel room.

People getting denied at car rentals.

People getting denied for airline tickets.

This would also affect business people.

Would that be embarrassing at a business dinner to be denied.

What about if you paying the Internet by credit card. That could get denied and Internet service would get canceled.

Like some people do. Have some of normal bills automatically billed to the credit card. This could get denied. Normal bills are Heat, Electric, phone, water, rent, cable and even mortgage.

Some people just like writing one check to pay everything.”

It seems that this individual got so concerned that there would be no easy way to use that credit card as freely as before. He or she’s right to use credit was being questioned by the creditor. How dare they do that. Is it unfair? Do they have a right to do that, especially to a responsible customer that pays off their balance every month? This caused many very angry comments toward the creditor. I can understand that but at the same time I also understand why creditors may start doing this. Maybe it could be for the same reason that tobacco companies now have campaigns to help people quit smoking. They want to be part of a solution to actually help the large percentage of people in credit card debt crisis.

I replied with this comment:

“There is a very good solution to this whole credit card issue. If a person uses the credit card responsibly and pays their total balance off every month, why use it? Open a free checking account for spending purposes only. Use a checking account debit card with a Visa or MC logo on it. It’s accepted everywhere all credit cards are accepted. Use it as credit, not debit to avoid the service fees.

When you allocate a budgeted amount of spending each month anyway, it can be deposited into that spending account and you will always know what you are spending… because the money is already there. No writing checks once a month to a creditor. For some-one who has outstanding credit and has wise budgeting practices this should make sense and be way easier.

Unfortunately there are way too many people in our culture today who don’t have any wisdom about overspending, correct budgeting and living within their means. And it’s only going to get worse because the younger generations are more and more programmed by commercialism, that getting what you want now (even at the pain of being in debt) is a better way to live.

I commend a creditor for actually putting extra limits if they feel a consumer is overspending. They must base this on the percentage of people who end up not being able to repay their obligation of signing a contract with them. When a person signs the aggreement for the credit card, and they break it, I’d say not only that the person is breaking a legal law, but they are also breaking a moral law to themselves and others, who have done nothing wrong. When a business person signs a contract with a vendor and then can’t pay their bill for whatever reason, the vendor can take them to court for non- payment, and at the business persons expense.

I was in major credit card debt as young adult, broke by the I was thirty. You know how many other young adults (before they can even buy a house) are in this same situation today? How many people file bankruptcy? All creditors should be a part of ending this crisis, because it will destroy our country. More people need to turn back to spending only what they HAVE, not what they might have in two weeks or a month.”