Saturday, May 17, 2008

Act Your Wage

First of all, I want to say that I love this book and actually all of Chris Moore's books. He has a quirky sense of humor and writes the most original books I have ever read. I feel bad using his cover illustration as the image for this post, but it demonstrates my feelings perfectly.
Yesterday I spent the day dealing with my oldest son. Another caveat...he's not a slug, he's smart, talented, works and studies hard. He works full time at a great job and goes to school full time as well. His problem, he can't control his spending. During first semester he got into financial trouble. Maxed out 2 credit cards. He's been working since to stay on a budget and pay them off on his own. He had a few big hits, car broke down, old rental house with HUGE gas bill etc. I found out yesterday that he had opened another credit card account last month and charged it up too. What was he thinking? He wasn't. As angry as I was with him for his crappy decision making, I was even angrier at the bank who issued him additional credit.
After he closed the account I talked with a supervisor in customer service who assured me that they would have checked his credit report in order to approve him. She said in a sickly sweet voice, we were trying to help him. I wanted to puke! Now I'm not a banker, but even I know looking at his mess of a credit report that he's not a good credit risk.
This is what I think happened. If in fact they did look at his report, they would have seen that his other credit cards are maxed out. If they bothered to look further they would have seen that he has no money in the bank and has bounced checks and been irresponsible in handling money, not to mention that he is only 18. And then this bank salivated and said, I see someone who we can make lots of money off of in late fees and finance charges. We can charge him an outrageous fee for the card and even tack on a monthly annual fee. I won’t even mention the interest rate.

While I understand that charges and fees are sometimes required of those rebuilding credit. That is not his situation. He is a young man in trouble financially. What did this bank see? A sucker. Credit One Bank was totally irresponsible in issuing him any credit at all. At best they are unethical. At worst they are bloodsucking fiends. They preyed on a vulnerable and inexperienced young man to make a buck. I don't know how they can sleep at night.

I feel powerless. I wrote a letter to the president of the bank, Robert Dejong,(which will probably head straight to file 13) and reported their unethical practices to the state attorney general. We will continue to work with my son to act his wage and manage his finances responsibly. It is a hard lesson for him, but one I hope sticks this time. Even though we are working with him, he is still on his own to make good decisions. It's hard knowing that there are institutions in this country willing to sabotage our efforts. Bloodsucking fiends.

20 comments:

Jody said...

Credit card companies prey on college kids. They have no cash, need money so they'll charge as much as they can, won't pay more than the minimum, and may take years to pay off the balance ... they are perfect targets. My husband remembers applying for credit cards on campus just to get free food or soda ... and getting approved for the cards when he absolutely didn't have good credit (and ended up with really bad credit). Unfortunately, it's legal.

I don't know we teach kids to avoid the pitfalls of credit. We only learned it by living through the mess of getting back on track (and that took us years ... both to realize the problem and to work towards solving it). We recently read a Dave Ramsey book and it was very helpful to us, but I'm not sure what effect it would have on a young person.

Best of luck.

Rose said...

Boy, you have hit a nerve for me. And what is more none of us have ever gotten in trouble through credit cards. It ticks me off big time...my younger daughter has been married and out on her own for almost four yrs and there are still companies sending stuff here trying to get her to apply for credit. She has credit card/s--but basically just to have for ordering on-line etc. and pays it off. My older daughter will not even get one...

I have seen kids they went to school/college with get the credit cards and most of the time they didn't even actually need the money; seemed to be the ones I knew had parents that could not tell them no anyway.

And one boy I know got one before he was out of high school--no job at all but no signature required from a parent.

It is my conclusion that credit card companies want students because they think mom and dad will bail them out. But their hope is that first they will collect tons of interest and late fees.

And why do credit card companies put limits on cards and then allow them to go over the limit? To be able to charge them more, of course!

Sorry to rant! This is just something my brother and I have sat and talked about and observed. I just wonder what all else credit card companies get out of this.

Any my MIL passed away and it was months before they stopped trying to hook her...I told my husband or brother one I should fill them all out and put deceased as her occupation.

Sara said...

Don't you just hate credit card companies? They do prey on college kids and even though we teach our kids about good money habits, this doesn't meant they get it or that they will follow them. I feel bad for your son. What about some type of debt consolidation that will limit his payment and help him rebuild his credit?

Kim said...

Well said.

A Spoonful Of Sugar said...

What a difficult life experience for your son - hopefully with your support he will learn to be more financially savvy. Perhaps the school system should be teaching more of this - as this is a basic life skill in these times.

A Proponent for Responsible Parenting said...

I can't believe you're so angry at the bank. They are a business and businesses exist to make money. People are responsible for their own actions. No one held a gun to your son's head and forced him to get a third card. He needs to take responsibility for himself and you should be responsible for teaching him how to manage his finances. My mother taught me to never spend money I don't have and to pay any credit card bills right away. I have never had a bit of credit card debt. No one is tricking your son, he's just making foolish decisions. The two of you should stop blaming others for your mistakes.

Leanne said...

Hi Jaquie.
Good luck with that... it is a hard lesson for your son. C/Cs are a trap for young and old.

Stephanie said...

Don't you just love it when stupid bloggers drop in to make ineducated and hurtful comments but don't have the guts or integrity to identify themselves? If that airhead had really read your post it would have seen you have been working with your son. Some folks might have learned to manage money but have no common courtesy, humility or integrity and are possessed of weak character. THat's okay--what goes around comes around.

Your son probably saw this as a quick fix, and not for the trap it is. Has he opted out of random offers? There is a number he can call so he won't keep getting easy access to new cards. You know, he might just have to fall on his face this time. Some of us learn the hard way.

amandajean said...

my husband and i have had a few problems with a few different credit card companies. we have learned that they aren't very ethical, to say the least.

Stephanie said...

Just found your blog through purple and paisley. Love your work. The radio flyer is awesome!

The Calico Cat said...

I have to agree with you. I think it is called predatory lending which is also who so many people have had to forclose on their homes. We purchased at the peak of the market & were very careful not to get a gimmicky loan (or 2), but it took us a long time to realize that we could not afford what we wanted...

Banks really don't care about credit risk - they are going to get paid either way.

At 18, I don't think that college kids should be able to have credit cards - I lived through that awful credit issue while in college & I know countless others who did as well.

They think, you are going to college, you will get a great job & then pay off your debt.

Laurie said...

Ignore the IDIOT. GOSH...if he/she has kids I hope they are still young...cuz they WILL screw up!! It's a given! You are doing the right thing and the bank should be reported. Issuing your son a 3rd card was WRONG. Hang in there...
Hugs
Laurie

Freda's Hive said...

I see one of the reasons we are in credit trouble in our country is the willingness of banks and other lenders to sucker people into debt they can't pay. Its totally a ploy. And really an 18 year old does not have the ability to understand debt, not really. No matter who they are and where they live. I see spending money you don't have as a personality weakness. I know with my 8 children they all view money so differently. I taught them all the same things but they all manage or don't manage their money sort of how their personalities are. You can't change that, they have to work through those problems and learn. But banking institutions have gotten themselves into a pickle and taken the rest of us with them. I am sorry. It is pure greed.

Regi said...

Glad to hear you reported the bank... totally irresponsible of them to hand out another card to someone who is already struggling. Our eldest is heading off to college in the fall and the credit card offers have been pouring in for 6 months or so. We have had long talks with her... but this is one of those lessons that sometimes the child has to learn the hard way.

I hope the lesson has finally been learned by your son... and that he is able to get out from under it relatively quickly.

Shanna said...

I have known many people who have gotten in over their heads with credit cards. I certainly feel for your situation and admire the fact that you are still making your son take responsibility. That not only shows your love for him, though it is painful to see him hurt this way, but it also speaks very highly of you as a parent. I think you are absolutely correct in your assessment of the credit card industry. Getting a credit card is easy, especially for college kids. They encourage spending, expected to have an interest payer for life. I have heard that it takes 40 years to pay off 8,000 of debt just making the minimum payment. They know exactly what they are doing.

Your son will see the end of this trial and he will learn a most valuable lesson. My sister was there not that long ago. Sounds like he's on the right track.

Rebekah C said...

kudos to you for working with your son on his spending issues! I have so many friends with cc debt from their early college years and they are still working to pay it off. I'm so glad I waited until I had my first job out of college to get a credit card. I know I would have been bad news too if I got one right out of hs!

Kari said...

Hopefully a good lesson was learned by your son, and thank goodness it is at an early age when he has time on his side. It is so important for him to learn that only he is responsible for his decisions, and some "reputable professionals" will take advantage of you if you let them. I also hope your complaints are taken seriously by the state attorney general. I can recommend Suze Orman "The Road to Wealth" as a good financial primer for your son (or anyone for that matter).

Anonymous said...

I can so understand how you feel. Our son got into a similar situation. He was depressed so he spent money that he didn't have; that made him even more depressed so he started drinking to try and forget his problems. He spent more money that he didn't have on drink because he was so depressed. He got anti-depressants from the doctor, but didn't tell us why he was so depressed. Eventually, £7000 in debt, he came to us and told us. Now we're all working together to sort the problems out. But like you, I'm so angry with the credit card companies who really don't give a ***** about what's going on, as long as they keep making money. I do hope that you and your son can sort out the problems - half the battle is getting the problem out into the open, then a loving, supportive family can work together to sort it out.

Sheryl said...

Just a little story to add of my own. For the first time ever we forgot to pay our credit card balance last month- what do you think we received in the mail the next month? An offer to increase;actually double; our credit limit...!!
Don't think it was a co-incidence -think they thought we were in financial trouble and could rack up more interest this way...
Banking is really not a service industry at all...

magikquilter said...

I don't check in for a few days and all hell breaks loose. Way to go Jacquie...great post....and good on you for naming names and reporting unethical practises.

Hope your son can see what this is doing to you as well....maybe that is what will ultimately help him....realise the effect of his spending choices on those he loves.

Having said that society today is so geared toward spending....we see all the problems with poverty etc in the world but we live in warm houses with plenty of food and rarely walk anywhere for anything.

Maybe the gap year some kids have of going out into the third world countries is a good thing..there is nothing to spend money on there and they see true deprivation. And big surprise, no banks willing to help the people out there either.