The Truth of Credit

This afternoon I had a conversation with the father of a young female debtor that really stuck with me. He was irate about the interest and late fees his daughter had been assessed. In addition, he wanted to know how I could work for a company that would give a line of credit to someone who had no verifiable income? As you can imagine, this line of questioning usually means that this call is going nowhere and fast.  Sure enough, he hung up, not satisfied with my response.  In hindsight, there are really only three entities he can blame in this situation:

• The Debtor – After looking over her credit report, I could see that this was not the only card she had delinquent (I counted 7). Clearly, she had to know that she could not afford a credit card with no means (job) of paying it back. It’s amazing that at the age of 18 people can vote but it’s considered predatory to lend to them? When is someone old enough to take financial responsibility for themselves?

• The Creditor - Are creditors predatory toward college students? Absolutely! Should something be done to stop this from happening? Without a Doubt!! However, there is no secret to this. No one forced her to use the card or spend more than she could afford to pay back. Interest and late fees are ridiculous but that’s what you agreed too when you signed up. Until someone changes the laws it’s always going to be this way, folks.

• The Father - Parents have a duty to teach their kids about money. The schools in the United States are about three decades behind when it comes to this. Obviously, this is easier said than done. However, to say that the creditor here is to take full blame would be shielding partial blame from himself.

This story is a recurring one. It’s sad to think that a girl right out of college is going to be burdened with such debt. She will be forced to take a job just because she needs to pay the bills for things she probably no longer owns. In the long run, she won’t be happy with her job or herself. Next, she’ll cry about her station in life. Finally, she’ll wake up and be 40 years old driving a 12 year old car and now working 2 jobs. Does this story sound like something you’ve heard before?

Related posts:

1. What’s Important Financially?
2. Can a Creditor Sue Me After Setting up a Payment Plan?