I have done everything I can to stay away from consumer debt for 20-plus years, and have never regretted it.

What about those of us who never *were* irresponsible, and thus had no lesson to learn.

If people want to continue to sink themselves into debt, let them. They'll learn eventually.

I don't care. I wasn't irresponsible with debt before and I won't be in the future. And in my experience, stupid people never learn, even from their own mistakes, so they will continue to take out just as much debt as they can get their hands on. It's the banks that need to learn their damn lesson - don't lend to people who can't afford to pay you back! I thought this was a basic rule of lending, but apparently I was wrong.

@Oranges w/ Cheese: You would be in the minority, unfortunately.

The problem with issuing credit cards to anybody with a pulse is that sooner or later, the money needs to be repaid, or else you have the sort of problems we're having now that affect even the responsible. That's why the responsible should be in favor of oversight and regulation; it protects you, not just the irresponsible.

@HurtsSoGood: Right, right. The government can obviously be trusted fully to oversee and regulate itself, so it should obviously be in charge of overseeing everything else. And no government officials are lazy or corrupt or incompetent. And I am Marie of Romania. (Really.)

@Oranges w/ Cheese: Noooo... While I would tend to agree that irresponsible people should get what's coming to them... it's not so simple, though, because eventually all the people in debt screw things up for the minority who do things right..

The reason I dont drink, do drugs, or smoke is the same reason I am not in debt: I saw my family do it in excess and learned from them that I didnt want to do it.

'A fool learns from his mistakes, but a truly wise man learns from the mistakes of others'

The vindictiveness on this site always surprises me.

I have a good friend who is 42, and is on her second round of cancer treatments- first was breast, second lymph. She had to quit her job due to her first cancer, her COBRA ran out, and she has no health insurance. Needless to say, she is facing some consumer debt.

The real issue is that banks and credit card companies need to stop. Period. This would entail:
1) A cap on credit card interest rates indexed to real interest rates. If credit card companies could only charge 2x the normal interest rate, they'd cut out the credit card deluge real fast.
2) End ARMs and every other tricky/risky mortgage scheme for home lending. If businessess and investors feel they need other kinds of loans for short-term business growth (i.e. equipment purchase), understandable, but keep homeowners out of it.

Needs a third choice "Already knew that lesson".

I have been (unsecured) debt free for years now. It's really easy to save up and pay cash when you are not making credit card payments. I still owe on 2 vehicles and my house, but I owe less than their worth on all 3.

@HurtsSoGood: I understand what you're suggesting. However, it isn't only the people who were stupid with their debt that got us here, it was the greedy people who offered them money in the first place.

The credit rating system (though grossly skewed some of the time) is there for a reason. You fuck up your money, oh well you pay for it. When its disconnected from the whole like that, it only hurts those people who were stupid with it to begin with.

The reason we are here now is because not only did the companies expect people to pay back the credit they couldn't afford, the companies then turned around and SOLD that credit to someone else and fully expected the money to be there when they needed it.

Stupid on both fronts, but If the stupid lending practices stop it will keep corporations from folding when people can't seem to get it through their heads that just because you have checks in the check book != you have money.

@Andrew Dorsett: Amen, ever since I was younger dad taught me how to manage money and spend appropriately. Now while I can't say I'm completely debt free (student loans, car loan), I can be proud to say I have $0 in credit card debt and will never spend beyond my means monthly to build up cc debt. Lesson learned.

@asten77: Unfortunately right now it seems more like the stupid people in debt get off the hook completely while the responsible people have to keep paying what they've been paying.

@nicemarmot617: THIS!

People will continue to misuse debt. The banks need to stop giving it to them. The credit scores are there for a reason (though they need to be revamped, and centralized IMO)

@nicemarmot617: Yeah, but when you make all those loans to unqualified customers, it takes time for them to go deadbeat. In the meanwhile, your books look better and better, and your company's stock goes up. Which seems to be the ultimate goal in the past decade - not long term, but the short term boost. Lift that golden parachute up higher before you jump.

1:00 PM, Central time: the poll is broken. Clicking on the vote button or the results link doesn't do anything.

Anyway, I would have voted for "What Lesson?" I should first clarify that I currently have no outstanding debts, and have an *ok* emergency fund.

I definitely spent WAY too much money on myself this holiday season in the form of an Xbox 360 Arcade, LCD TV, and upscaling DVD player. Couple that with having to pay my car insurance in November, spending way too much on food, having to pay for my (hopefully) last class at college in March, paying rent, and ever increasing food prices will make this month's payments interesting.

Now, which one of my cards has the lowest interest rate...

JGKojak: My sympathies go out to your friend. I know firsthand that a serious illness can drain the resources of wealthy people who have GOOD insurance. Unless you have really deep pockets, any illness or accident can wipe you out financially. I don't think anyone here would judge your friend by the same yardstick we'd use to judge real deadbeats.

@JGKojak: What's vindictive about making it possible for people with less-than-perfect credit to buy homes that they would not otherwise be able to buy?

Disallowing products designed for high-risk borrowers would eliminate their availability. Because that's what YOUR scheme amounts to. No company would offer their low-risk products to high-risk borrowers... it just doesn't make good business sense. Therefore, high-risk borrowers would be shut out of the market.

@JGKojak: Medical debt is normally out of one's control. I believe we're more talking about the people who have 6 credit cards and stand in line in the grocery store going through each one as the previous one is declined.

People who live in excess, basically.

Best of luck to your friend :(

Is a free two-liter enough to entice someone to sign up for a new card? Don't most places at least offer no interest or payment financing for an into period? I don't even think this offer would get me to shop at Walmart, let alone open up financing.

@JGKojak: I'm sorry to hear about your friend, and agree with you about some of the comments. Yes, we should all strive to be as responsible as possible. Sometimes, though, shit happens. My mom went through bankruptcy after a divorce. It taught me to never get married so I will never have to divorce (kidding, mostly). It also taught me to not fuck up my money beyond repair, and be very very careful with credit cards.

Seriously, some people are one medical problem or job loss away from disaster. Some are just irresponsible goobers who will never learn, true, but I bet there are more in the first category than some people want to admit.

@Jeremy82465: I thought it was a wise man learns from the mistakes of others; a smart man learns from his own mistakes; and a fool never learns at all.

@speedwell, avatar of snark: That's exactly what just happened, where have you been?

Its all well and good for someone to want to own a house - but if that isn't financially possible, they need to do something to MAKE it possible or deal with life without it. That's called responsible saving & spending.

You don't NEED a house. A roof over your head, yes, but a house? No.

@HurtsSoGood: Debt never needs to be repaid. Just ask any economist. Or Dick Cheney.

@Oranges w/ Cheese: That just means you learned the lesson BEFORE the rest of the class.

You just didn't need to learn it the hard way. :P

@BlackMage is doing the Time Warp agaaaaaaain!!!: Poll is broken for me, too. I also would've clicked on "What Lesson?"

I still owe on my car, but it is worth far more than I owe and I have money in the bank to cover it anyway. So I'm not in debt.

I will admit I spend too much money on stuff sometimes, but I always pay for it on time and never run up an insurmountable mountain of debt. I think the most that's ever been on my credit cards was $1,000 for my computer, which I paid off in two months.

@Jeremy82465: Agreed, mom, big sister, aunt, etc, all in major debt. (On the other hand, Dad has always been a saavy spender who believes in saving for your wants and spending on your needs first.) I've spent the years learning from their mistakes and and at 23 years old have learned that credit card debt is the worst of all.

I've never had any debt either, even though I have a modest income, live in L.A., and have a wife and two kids. I've never understood how so many people can only think in the short term and getting what they want NOW, without regard to the financial consequences down the road. Not only that, but who needs the stress and embarrassment that comes with owing money you don't have?

Or maybe a lot of people heavy into debt don't stress over it or feel embarrassed or ashamed.

@Jeremy82465: God, the stories my boyfriend has told me about his mom spending money that just doesn't exist.

Such as: dad hides checkbook - she reorders checks.
He cuts up credit cards - she signs up for new ones.

It baffles!

The only debt I have ever been in was for my car which I should have paid in full in a couple years. The only debt I plan on later is a house. I hate debt and avoid it. I see too many friends buried under student loans and credit card debt and it is sad.

If enough people learn this lesson, Wal-Mart and many other retailers will be put out of business. Mr. Scott had better pray that Americans have not learned this lesson well...though it is a good lesson to learn from the consumer's viewpoint.

@Oranges w/ Cheese: You're preaching to the choir, actually. I have been patiently saving my cash for years in order to be able to start building my own home WITHOUT A MORTGAGE, because I don't believe in calling the bank's house "my home" and treating it like I actually own it.

@JGKojak: The vindictiveness on this site always surprises me.

It shouldn't. There's no shortage of people who like to say "I told you so." The anonymity of the commenting forum just makes being holier than thou easier.

The real issue is that everyone needs to stop. Banks pursue short term gains by offering people they shouldn't revolving loans, so people who are pursuing short term gratification can buy things that satisfy that urge while going further in debt, which they then need to payoff using other short term loans.

Perhaps the Wal Mart CEO is right. The last set of stimulus checks were used in no small manner to pay down debt. I would suspect another lump sum would also.

Ultimately we could see another loop develop where ther economy shrinks because people are too scared to continue engaging in reckless behavior.

And maybe that isn't a bad thing.

I used credit card debt wisely (promotional 5% rate, life of balance, for some home improvements 2 years ago). Been paying it down on a schedule to be free&clear this Fall.

However, I fell victim to Chase's whims when they raised our effective APR to more than double via a "monthly fee for users of promotional rates." They also increased the minimum payment by 2.5x. While neither of these were financially painful to me, they did reneg on what I felt was a mutually beneficial agreement that was paying as agreed.

I protested loudly, but they barely budged on it (settled for 8% and no monthly fees). They are effectively using their lowest-risk customers to pay for their losses now.

Word to the wise: F*ck Chase credit cards. Don't learn the hard way!

@HurtsSoGood: Actually, I'm not so sure that responsible people are in the minority. I think that it's a relatively small percentage of the population that is REALLY irresponsible with credit card debt. A larger group probably carries a balance, but I wouldn't call that "irresponsible" as long as the payments on it are not growing and not beyond what they can handle on their income. It's not "irresponsible" necessarily to be in debt, as long as you're not in too much debt for how much money you have.

@Oranges w/ Cheese: Once the bailout and stimulus is over, we can look back with pride on how many flat screen TVs and Acura leases we actually paid for.

@nicemarmot617: The banks aren't going to learn their lesson. The way they would learn their lesson is if they lost the money they lent out, but instead they are making most of it back from interest and getting the government to cover their other losses.

@speedwell, avatar of snark: watching the pain my parents went through taught me to stay away from debt. I stay far away from credit cards too.

@CocktimusPrime: Whoops. into=intro. English > me.

@JGKojak: I don't think that's really "needless to say" that you would get into consumer debt just because you had a costly and unaffordable medical crisis. Medical debt is different from credit card debt, and it's foolish to put medical bills you can't pay on a credit card. It's a much better idea to just owe the hospitals and doctors money, as you've got a lot better chance of getting the amount you owe reduced via negotiation than you would trying to bargain with the credit card companies. I agree that our healthcare payment system sucks and bankrupts even a lot of people who actually have health insurance, and that's why I'm constantly talking about the need for reform there, so don't take this the wrong way. But in this system we have now, people need to be aware of the best ways to protect themselves financially in the event of a medical disaster. You need to protect your negotiating position instead of just placing yourself into credit card debt to pay off your bills, especially if the medical debt is far beyond what you could reasonably expect to pay back on a credit card within a couple of years.

@Swizzler121: Staying away from debt does not equal staying away from credit cards. Many people manage to stay out of debt while using credit cards by not thinking of credit as free money, but rather as cash that you are immediately removing from your bank account. Also, by paying off CC balances and not just the minimum even though you can afford the balance. That way, paying the full balance on your CC doesn't hurt as much

Does this mean they will bring back layaway?

@EyeHeartPie:
Yes. But nowadays even honest, loyal credit card owners are getting [reference to non-consensual sex deleted] like a prom queen sent to county.

@Ash78: If you had/have good credit still, I'd just find a 0% for a year offer somewhere else and transfer the balance (doing the math on any fees, etc vs. interest saved). I'm still getting a bunch of those 0% offers, so I think they're still offering a lot of them to the people who are very low credit risks.

@morganlh85: Weren't there like a bazillion articles about this already before Christmas?

@johnva: I'm sort of looking around, but having to weigh the idea of opening a whole new line of credit (this Chase card was in my wife's name for 11 years...which is why it's so hard to believe that they're effectively running us off!).

A lot of those deals have dried up, and many of them have pretty steep transfer fees--that's hard to recoup when I'm going to have it paid off so soon. But good advice. I've got my eye on bankrate.com on almost a daily basis.

@Oranges w/ Cheese: We get to bail out the irresponsible ones first through tax dollars and then through inflation. Yay!

@morganlh85: I've never quite understood the point of layaway or why people do it at all. Why start paying someone else now for something you can't afford yet and will get in the future when you could just save up the money and buy it later (making interest on the savings in the meantime)? At least with credit card financing you're getting the item up front. Moreover, nowadays with things like electronics constantly coming out with new models that are better than the old ones for the same price or cheaper, it makes even less sense than it probably once did. Saving up on your own vs. using layaway probably means that you'll also get a better item, in that case.

@Ash78: Yeah, obviously whether or not this is a good idea depends on the exact numbers involved, so you'd need to compare carefully and do the math (and on your self-discipline to not abuse the availability of additional credit, but you sound quite responsible so that's why I even brought it up). As long as you can get it, there's not much long-term downside to getting more available credit. If it were me, I'd just work the numbers on a calculator or spreadsheet and go for it if it turned out I was going to save about $100-$200 or more after accounting for the fees (that's about my threshold for what it would take me to open a new credit account, YMMV according to your own views).

And yeah, the 0% offers are much fewer and far between lately, and many of them are for shorter time periods like 3 months or 6 months. But I know I've still gotten solicitations this week for ones that last a year, so they're definitely not gone entirely. If you've got credit in the 750+ range, you might well be able to come out quite a bit ahead depending on how much your debt is. Also look carefully for cards that have capped BT fees if you use one for this purpose.