Vintage King shutting down VK Credit Card

It should be noted, in this discussion of credit and finance.... the federal government relinquished control of currency and fiscal management to the FED a long long time ago and has since accumulated more debt than the rest of the world combined.

The treasury, however, can mint $billion or $trillion coins and repay debt with them as coins are still de facto hard currency and paper, merely promissory notes.

Oh well, I must go pick the 20s and 50s off the money tree growing in my backyard now.

In the USA, there is a lot of marketing around credit cards to convince people to go into debt.  They even convince people that having some revolving debt/credit is a good thing, but it's really just to keep a little interest owed by the debtor.  They start early, and have effectively numbed people to the effects of debt on life.

Take our banking crash for instance..  We are so numb to personal debt, that we actually blame corporations for giving us access to credit, rather than blame people for taking on so much debt that they could never pay it back.  It's like someone committing murder and we blame the getaway car..

People have come to believe that debt is free money, rather than a tool to use sparingly, and an obligation to pay back.  I've had a lot of people even tell me that they racked up debt and simply plan to bankrupt out of it later.  That was actually their plan the whole time!  That's how ridiculous this whole thing has become.

When I was 17 and about to graduate high school and go off to college, I would get at least 5 credit card offers in the mail almost every day.  

I lived in a household that did not believe in credit cards.  You either paid with cash, or you didn't buy..  And I'm thankful every single day that my parents pushed this on me at a time when I was naive about debt and finances because up to that point, like most children, I was essentially a socialist, expecting a higher entity to take care of me.  My parents supplied everything that I needed to live and go to school.

Because I was taken care of by my parents, I never fully understood the ramifications of debt.  School in the USA (at least in my area) had classes on finance but it was cursory at best, and didn't really get into any details about personal life.

I had many friends who didn't have parents who were adverse to debt, and most of those kids got those same CC offers in the mail and ended up with maxed out credit cards, some with CC debt into the 20-30K range by the end of college.

I know of at least one that still had CC debt being paid after 10 years.  Most of the others entered into payment/debt consolidation programs to pay their debts.

So yeah, we start the social programming early here, and we drive it with incessant advertisements that appeal to our egos and convince us to act upon those primal urges to one-up the next guy on the social ladder by buying things that cost a lot more than we can afford.  

You make valid points on the lack of personal responsibility and a culture of predatory lending, but on the crisis you're leaving out the big picture, as does anyone who deflects responsibility for the crisis to individuals, when the problem was systemic fraud. Individuals with bad credit should not have been given these loans in the first place of course, but the main thing is that risks of defaulting were fraudulently repackaged as AAA and sold as safe investments, for example, to retirement/pension funds. 


en.wikipedia.org/wiki/Credit_rating_agencies_and_the_subprime_crisis

The issue was that you had collusion of banks with ratings agencies to fraudulently package these subprime loans, that's what led to the crisis. If it was just about lending to irresponsible people, then the risks of defaulting would have been appropriately rated by the agencies, and you would not have had a huge investment bubble.


Credit and refinancing is more than a tool to use sparingly, it's also instrumental to opening up opportunities for responsibly making money and growing a business.

"A very socially important casino" - Lloyd Blankfein (CEO of Goldman Sachs)

"Doing God's work" - Goldman Sachs selling shitty deals

I certainly believe in personal responsibility/accountability first and foremost...but these mortgages - 5:1, 7:1 Arms, etc. were confusing - and misleading - to the common working class Joe...so, lets not let these guys off without holding them somewhat accountable. This whole disaster is the absolute fault of both parties...The Democrats for lowering approval thresholds with the Dodd Frank disaster and the Republicans for deregulating shit even farther. The whole thing - wrapping these mortgages in to trauches and reselling shitty mortgages (ninja loans included) was SO convoluted that only a TINY percentage of people saw it coming. Although, I still stand by the "if it sounds too good to be true..." mantra. Thank God we didn't do an arm in 2007.

Also, a "mortgage" isn't creating value "out of thin air" at all. It's tied to a piece of actual property.

I flip houses. I use debt all the time to do that. It's a valid and useful tool to do business. There's a big difference between investing in a property because you have a bunch of metrics (comps, demographic trends, schools, transit, etc) telling you it will appreciate and loading up consumer credit cards with a bunch of stuff you genuinely can't afford. And after the interest free period runs out you're looking at a retroactive 22% or whatever.

The first house my wife and I bought (which we still live in) was the best monetary decision I've ever made, by a landslide. Granted much of that was luck, but still. We bought a place we could afford, remodeled it ourselves, refinanced and now have a bunch of equity. It of course helped that our city has been growing rapidly and property values have gone way up. But the initial risk of taking on a mortgage was something we thought a lot about and its proved to be an incredibly good move, financially.

Bottom line... use your cash or your other credit cards at VK from now on.

The problem is how do we get off that boat without sinking the world's economy and setting off WW3.

Don't forget that the Dodd-Frank laws were enacted to essentially force banks to hold more liquid funds in order to cover potential future crashes/losses..

The banks publicly complained about stifling their abilities, but secretly LOVE this law because it puts extra strains on smaller banks, while larger banks can more easily absorb such costs..

This has resulted in a lot of smaller banks going under, and/or selling their assets to the larger banks, giving the larger banks much more leverage to monopolize the industry and stifle competition.

Exactly the opposite of what the law was supposed to do.

And exactly why politicians should NOT be in charge of the free-market.

The free market dictated that these banks should fail due to their business practices.  However, their "friends" in government bailed them out, and they continue to do the same shady business practices as always.

For a small amount of comfort, we just gave candy to crying children, ensuring that their actions would be repeated in the future.

I still contend that as a society, we allow ourselves to over-utilize debt, and go too far beyond the point of return, regardless of business practices of these banks.

If we weren't clamoring for the ability to go into large-scale debt, then the banks wouldn't be making money from shady deals, and they wouldn't be doing shady business.

It all starts and stops with personal greed and lack of personal responsibility.