One of the things that troubled the general public in the credit crisis was the increase in the number of people with credit card debt. We had all been living in some sort of financial bubble and forgot that we had to pay back our dues when the time came. Although we had been through the great depression, there was a great chance that we would forget those lessons and continue to make mistakes.
Money Wise
People were so confident of the good times that they failed to plan for the occasional blips that could derail them in the end. When the crunch really started to hit, it became apparent that there had been a gross over estimation of what the economy could handle and that there was a need to drastically review how the situation was handled.
Support networks had to be put in place to deal with those people that had already fallen through the gaps. However there was also a need to look to the future practices of the lenders. Government was more concerned about the possible failure of financial institutions than really building a consensus for dealing with the problem of individual credit card debt.
Smart Finance
Ordinary people were the least protected when the crisis started and they still remain the least protected in the current times. In dealing with the situation, it is important that the stakeholders look to the various efforts of the clients to manage what can be an awkward situation. We looked at the different elements of the package to see how we could assist the general public or individual borrowers. It is disappointing that there was only limited help for the individuals that make mistakes on their borrowing.
One can take the harsh attitude by saying that they had no business borrowing in the first place or we can consider them to be victims of a system that does not look after its own. The lending institutions had a solemn duty to check that the people they were giving loans were able to pay them back. They failed in this duty and they have to suffer the consequences.
In looking at the spending habits of the world today, I am not yet convinced that the public has fully appreciated the issues that go with credit card debt management. The spending has started to pick up again and the politicians are telling us that the only way of guaranteeing economic prosperity is to spend even more.
The time will come when we are in exactly the same situation that we thought we had survived. The rampant spending on credit cards cannot be sustained. People ought to be encouraged to use their debit cards or cash in order to deal with their bills. Anything else is just plain dangerous given the persistence with which the bills start to mount if they are left unmanaged. The best thing is to insist on fiscal discipline even on an individual basis.
