Would the World End if All Credits Cards Got Paid Off?

What if we sent in the full remaining balance on all our credit cards? Every single person in America, paid… off… alllllllll their credit card debt. Our Amex’s, Discovers, Visas, Mastercards. All of them.

Would the heavens open and rainbow ponies feverishly lick our 16th chakras while massaging our seventh?

Or would the world implode into a fiery ball of cockroach eggs, and a few survivors converted into driveling minions haunting the hallways of eternity? And flogging. Somewhere there’s a whole bunch of flogging going on, too.

MSNBC explains that the true answer is something more closely akin to the later. That’s what happens when you’re a journalist with both Bill Gates and a giant fascist peacock as your boss.

UPDATE: Paying off a large chunk of your credit card debt can get Homeland Security concerned and on your ass.

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  1. nweaver says:

    What a BS article.

    For example, the worry about consumer savings rate is REAL.

    The -1% savings rate is a HUGE deal, it means that people are getting much deeper in debt and relying on paper gains (appreciation in housing) to bail them out. A VERY bad thing.

    Heck, just restoring savings rate to 0% would be a -2/3% hit to US GDP, a big deal.

    (Also, that -1% has to have a lot of people with negative-lots to counter people like me who are at 25%+ gross savings rate.)

  2. airship says:

    I don’t owe a nickel to anyone, and one of the greatest joys I derive from that fact is that all the financial institutions that are trying to suck me bloodless just have to go find other victims. Unfortunately, they are in ample supply. I’m afraid my meager efforts will never be enough to starve them until they shrivel up and die. As they so richly deserve.

  3. Tonya says:

    I learned about credit card debt the hard way and it wasn’t even huge amount. I got out from under it with the help of the Motly Fool folks, god love them. It was a very valuable lesson and I’ve never been back to that bad place. Now I keep a few cards, but they are at home in a drawer with zero balance and I keep them for serious emergencies only. My only debt is mortgage which is just fine with me.

  4. gunnk says:

    “To many observers, the current rate of American savings seems dangerously low – and debt levels dangerously high. But we’ve heard the same warning several times in the past few decades. And the U.S. consumer, and the economy, seem to find a way to keep on going.”

    This kind of thinking worries me — especially when I keep seeing it repeated frequently in the media. “The consumer always keeps spending!”.

    Seems to me this is like walking towards a cliff: “To many observers, we’re getting dangerously close to the edge. But we’ve heard that same warning several times in the past and have never actually fallen off so we can probably continue walking in the same direction safely.”

  5. LLH says:

    this kind of thing scares me to no end. and it makes no sense to me that someone with bad credit who’s in dept would be considered a better credit ‘risk’ than someone with no credit. i lived in the uk for so long that when i came back to the US i had no credit, even though in the uk i had been a home owner with good credit. starting my credit history over again was a blessing in disguise. i know the game now and i love returning the many pre-approved offers for credit cards that have no spending limits. stickin’ it to the man. hehe.

  6. MirDreams says:

    And here I thought that the banks took forever to credit my money just so they could get one more interest payment out of me.

  7. AcidReign says:

    …..I paid interest once on my credit card. I had just bought a house, and spent a fortune fixing it up. With about $700 in life savings left, the furnace died, in November, and I had a newborn in the house. I bought a new furnace half on credit, but we ate lots of peanut butter and chicken the next three months, and paid it off. Never again…