Erica’s News Note: To end on a high note
Erica Hill
AC360° Correspondent
We are a nation drowning in credit card debt. The total on our collective plastic is far more than the bailout Washington is trying to cobble together, and to many of us, the zeroes are incomprehensible. Americans now carry $850 billion dollars in credit card debt. WOW. I’m a BIG believer in personal responsibility, and I’d like to campaign this election season for more of it – from everyone. Yet, when I hear about banks and credit card companies knowingly pushing people further into debt, I can’t help but cut the victims some slack.
Two former account managers for a major credit card company tell CNN they were paid to aggressively push cash advances, even getting customers to max out their available credit. "I would say 90 percent of the time, people were pragmatic. They would say, 'I don't need $100,000,' and we would find a way to convince them they needed the money," one woman recalled. The other former employee called the entire system “a great big con.” Makes you feel all warm and fuzzy.
Could any bank or credit card company really get away with this? Are they actively pushing us to overextend, in order to increase their bottom line? Deb Feyerick has your answers.
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The last thing any of us need to do in this economy is hurt our all-important credit. One way to lessen your chances of rejection come loan-time: stay on top of your credit limits. Of course, it would be much easier to keep that credit and credit score in tip-top shape if someone, ANYONE would reveal just how that little number is calculated, but somehow I don’t think that will happen.
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My Dad sold cars. I loved visiting him at work. I’d check out the new models in the showroom, pretend to take my chosen model for a test drive and then head back to the shop where the smell of motor oil was like a warm blanket. I loved everything about it: the grease, the tools, the bad lighting, the revving engines…the Coke machine near the break room with the weak coffee-turned-sludge simmering on a hot plate. I am nostalgic for those days and those comforting smells. To this day, when I drop my car off for service, part of me wants to wait in the shop while it’s fixed.
As much as I loved my Dad’s job, and as glamorous as it seemed, the wisdom of my teenage years (ha!) and early 20’s eventually set-in, and I began to see how difficult it was. Forget the bad wrap and being the butt of jokes (lawyers, do you feel me here, too?) – how about putting food on the table? The 80’s were brutal. Even worse? Selling a car today. I never understood then how a car dealership could make enough money to pay all of its employees. Yes, the service department counts for something, but when you’re talking car sales, how many people are actually buying cars every month?
Families across the South know the reality all too well. Tonight, many are learning they’ll no longer even have the chance to eek out a living selling cars. Bill Heard – the biggest Chevy dealer in the US – is closing its 13 remaining dealerships. The weak economy, lofty gas prices, and an inventory loaded with trucks and SUVs add up to a business that just can’t sustain itself any longer.
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OK – I really need to give you something positive to take away from this blog! Seems like the perfect time for a CNN Hero, no?
It is my pleasure to introduce you to a woman who is keeping 10 year olds from being married to men three times their age, and who is giving children hope and a future.
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Filed under: Erica Hill • Erica's News Note |
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I've discovered the upside of having really terrible credit. I've had a lot of ups and downs, so I lost a home to foreclosure about 10 years ago and had a car repossessed about the same time.
However, I have no credit card debt. I've had to live without credit. The only credit card offers I get are for horrible rates and fees for extremely little credit in return. I just toss them – I'm not that desperate for a credit card.
I don't mean to imply that I'm superior to anyone. I'm definitely not. Some would call me a 'loser' for screwing up my credit early in life and they wouldn't be entirely wrong. But considering the state of the economy, I see it as a fortunate accident. Other than a student loan that I'm struggling to pay after being out of work for 8 months, I'm debt-free.
I know there are people with special circumstances, but in most cases we use our credit cards to buy things that are not necessary for living, but rather things that keep us entertained. Our grandparents got through life on much less luxury than we have today. Most of the things we buy on credit are desires and luxuries that we perceive as needs. Blaming the people selling us the use of money does not solve anything. Regardless of whether or not credit card companies pressure people to borrow, it is everyone’s own responsibility to determine if they can meet the obligations of loaned money. If businesses are giving out money to people that can’t repay their loans, then they deserve to fail.
Hi Erica,
Times are a changin. I remember when I learned many of the car dealer ploys to dupe naive buyers, even those for the smart ones, into buying unnecessary options to raise monthly payments (especially the dreaded finance guy), back in the 90s. I was practically thrown out of two dearships by frustrated dealers. Years later, I found that their are companies willing to negotiate with many dozens of car dealers for a buyer who doesn't want to hassle for hours or days with a dealership, but for a small fee. Such a negotiating company can find a car dealer who has is willing to sell a car for the buyer's asking price (usually $500-$1000 above dealer cost), even if the dealer is a hundred miles away (which is worth it. Now, car dealers practically are willing to sell cars at cost, but watch out for when they try to get you with their company's "better interest rates and financing". Buying a car at cost isn't worth it if a buyer is stuck with a high interest rate, which the dealer can still profit from highly from. They seem to try to find ways to get you at the end, when it seemed like smooth sailing to a great car buy for the buyer. One dealer tried to dupe me with a printout of a false amortization table (table to estimate monthly payments using interest rates, months to pay for car, and car's price. I brought my own amortization table and calculator, and not let them rush me while I countered their ploys easily.
I have been on the recieving end of the phone calls. The people are very convincing. But I keep up with what I owe and could say no.
Have you all noticed that while Sarah Palin is putting her feet in her mouth, Joe Leiberman is by McCain's side wherever he goes?
Being an American that has lived most of my life in Germany I was shocked and dismayed to see how much credit we collectively and individually live off of. It simply disturbing to tell the truth.
I get all sorts of credit card offers in the mail just about every day. I shred them up and toss them. I've learned my lesson with credit and hopefully after next year my credit card balance will finally return to zero and I can put that behind me.
The companies pushing cards though are really something else – they even sent an application to my cat, a orange tabby named Oscar Madison. Needless to say he was not interested. I think about my grandparents and parents who paid cash for everything. Why did we get away from that? I always justified mine on it was easier to carry a card and pay it off in one payment by the end of the month but its too easy for that balance to get to where it takes more than one month to pay off. I hope I can say next year "never again".
I have much respect and admiration for Mcain, but I have been thinking that in this new world, he just doesn't get it. That his campaign has led him down a path that is not earning him the respect he deserves. His intentions are patriotic, but the paths he has been on is out of touch with what we need now and for the future. He seems to be a man torn between his morals and the advice and lack of morals by his campaign managers. Now he is between a rock and a hard place. The powers that be took a true hero, and used him in every way in what seems like a desperate move to keep the Whitehouse.
Now I have no choice but to move to the left with my one vote for the good of future generations in this important election.
why is it that i'm hearing all this news about debt ,credit cards, and president bush talking about housing and mortgage companys. my personal thought is like all americans, it's the cost of gas. thats why americia is hurting now! instead of a family paying $20 – $50 a week in gas they are paying 4 times as much just since 2003. i understand that every mans greed is to fill his wallet before anyones else's, but at what cost? i spend about $150 dollars a week just in gas. i roughly have the same amount to pay bills and eat with. if i was to pay for gas at the prices i paid before 2003 it would be like $50 . big difference, huh? the extra $100 would be handy to have for everything else and could be used on doing something for pleasure with my boys, which is no longer possible at these gas prices.i know and understand that gas prices are not the only fault we have in america and that the credit cards and the mortgage companys are a problem. everyone [( the average person) makes less than 50 thousand, most less than 100 thousand.] with no company car has a complaint about gas prices and we are the tax payers. why isn't gas, the real issue being talked about or even better being fixed. whether it be exxon's wallets or saudi arabia or whoever is to blame be made to make it up to each and everyone. what happened to iraq paying for thier freedom with oil? there is so much. please give me some help in understanding all this. thanks,
tim
Hi Erica,
Lots of gloomy news. However, CNN heroes, or any hero who devotes their lives to benefit others, makes me very hopeful.
It's really the best of us that's needed now, more than ever.
Lorie Ann, Buellton, Calif.
Hi Erica, I'm like Lilibeth; I don't carry any debt on my credit cards either. Actually, I get cash back – Discover gives 1% cash back for using their card. I pay it off every month and get cash back.
I also agree to just say no when they push for additional credit lines...what a mess! People can get sucked in.
Hi Erica, I didn't know you are on CBS on Sat.? cool I'll be looking for you there too. On the $$ issue, everyone makes millions now.. I think they should all make $ 8.50 an hour.. that would help if they took a pay cut..ok they went to school, they can make $10 an hour. see u*
Hi Erica, I don't carry any debt except for my house. I just don't like paying interest, period. Those banks that push you to get credit...I guess they just trying to make a living...but to push someone who doesn't want or need it. The onus is on the person being pushed...just say no. See you later.
Any person that keeps a child from being abused and raped is a super hero in my book. This woman rocks!
I understand the credit card game. I get a new offer (or two or three or more) every day in the form of junk mail. I have to wonder how much they budget and spend to annoy us with this waste of paper. Do you know by any chance? I'd love to see those numbers.
I do feel for those in car dealerships being hit. The days of big cars and trucks had to end at some point. If you go to Europe most people don't drive big gas guzzlers for their personal vehicles. Maybe America needs to follow suit. It's a thought.
Thank you Erica and CNN. Just yesterday I was telling my co-workers that someone needs to investigate credit card companies for the same infractions as the mortgage industry. Thank goodness you guys ran with that one. Was glad to see that these two women came forward.
When these companies allow people to go over and above their limits they are in fact comitting fraud. Why have a limit if you can go over it? Because they make more and more money off of you when you do. Oh, they will fine you, sure thing there, and then they will continue to rape you over and over with fees, fines, raises in interest, etc. And the government turns a deaf ear and a blind eye. It is disgusting. Then we all sit around and wonder what the problem is? Seriously?
We have turned into a spoiled, silly country. It is beyond embarrassing. If you do not have the cash, don't buy it! It is hardly rocket science people.
Ah, I used to work in a car dealership, so I totally get your nostalgia for the smells, sounds and whatnot. That made me smile and brought back some fond memories for me. A good friend still works there: I am concerned for him. We are living in some crazy times, to say the least.
Hellooo Erica......
My dad loves that old cars too, he brought that old car around 1950s and I love old cars too.. I looked many old cars mostly 1920s through 1950s. I always check old cars to see...... he brought that model car 1920s and I rode with my dad with old car...... It was so amazing to ride!!!! See you later.........
I'm 35 and I am lucky that my family put their children first to ensure when the time came and I wanted a house I could get it the old fashioned way with 25% down.
However, I have two rare medical conditions(so rare that there isnt even agreemant on any official name). Well needless to say I am drowning in medical credit card debt. One card I was tricked into getting by being overcharged. The rest is medical bills. I don't want to be bailed out. I would love the drs that took advantage of me to pay only their part. I wish my husband could find a second job to pay off all of this. I am ashamed at my age that I have to through this. Of course outragious apr's dont help. I want to honor all the loans/obligations we have.I just want our payments to count. To me the people who put loans through for homes to people who didnt qualify are the same as people who push credit cards on people who dont want them.
I grew up in the 80's and I can remember it being the good old days. The family businesses that you could go and hangout in. I grew up in a small beach town made famous on tv unfortunately. Businesses that had been there for almost fifty years are gone. Not because they were going out of business but because the real estate market is so crazy that the owners of the building decided that since the land is worth so much,paying rent just wasn't good enough. They wanted a percentage of the profits. So these places closed. Even the hospital is up for sale. Its simple greed Erica. Cheep easy money. Only these people seem to forget that nothing is free. Nothing beats honest hard work like your father or mine. Success in life comes from hard work,dedication and focus.
Regarding the $700B bailout... Why not solve the ROOT of the problem rather then the multiple heads of the problem? Give every tax paying American $1/2 million and tax it at their income rate. The remaining refunds must first be applied to pay off a mortgage, pay down a mortage or buy a home. If a person has paid off their home and doesn't want to move, or has cash left over, then they can use the money as they please. This would cost @ $200B after taxes.
Erica, I think that's terrible, concerning the dealerships closing shop. I can't imagine how painful that must be for those families who work at the shops. Hopefully, something positive takes place in this sagging economy soon. Hope your evening is going well.: )
That story from Yemen seems familiar. Seems like news from the mormon towns in Utah and Arizona. However I have an issue with the following statement.
"At an age when girls in the West still play with dolls, Nujood found herself married to a man three times her age. But in her home country of Yemen - a deeply conservative Middle East Muslim nation"
Why make it an issue between West and the Muslim world. Why cant this be a humanitarian issue than injecting venom against Muslims.
Erica I was excited to read the high note. The story indeed is great but could have been told without the above statement.
Erica, I hear ya on the credit card thing. I don't see how many people want so many cards with high lines of credit. I mean, most people have no use for them.. I also wonder about those store credit cards that seem to be issued out to anyone, almost just for the asking. Personally, I carry two credit cards, but rarely use them. I also have a bank debit card, but prefer to pay for most purchases in cash. I was taught that if I did not have the money to buy it, then I don't need it.
Thanks for all of the updates today, Erica.
First off, I want to say congratulations on your new anchor position on CBS Saturday mornings! I watched you a couple times when you were doing the fill-in work, and I thought you'd be perfect for the permanent spot. Best of luck!
I feel really strongly about this credit card debt issue. People in the USA need to learn how to manage their money. When I was growing up, my parents always taught that if you can't afford it, you don't buy it.
I do agree that some of these people were exploited by credit card companies, and I do feel bad for them. However, in general, many people need to learn the basic principles of money management.
Have a great show tonight, Erica! Thanks for doing a great job!