All reports show that there are major defaults in home loans. Reports now are also trickling in about credit card payments delinquency at an all time high. If most people stop making their payments then it could happen that credit card companies may go bankrupt. It is a scary thought but something maybe we should prepare.

It should not surprise any one of us. Credit card companies, like their home loan counterparts have been selling a pipe dream ‘You deserve everything – and get it NOW – you should not have to wait to earn it”. This is the mantra under which credit card companies have been pushing the concept of ‘charge it’, ‘charge it’ and then charge some more. In their short sighted view they just want to get everyone to be in debt to them so they can make hefty finance charges anywhere from 10-32%. And if you default, they make even more money in fees.

So they have got everyone living large. Spending beyond their means. Buying things they should not be and in most cases don’t need it. They buy so much that when their closets fill up then they rent a storage place to keep their stuff. And the whole spiral downwards begins.

What credit card companies forget is that the person taking the debt does not in reality have the capacity to own all this extra stuff. Doesn’t deserve these items in the first place. Let me explain. Whenever you take a loan you are in fact saying ‘I am willing to sacrifice my future earnings to buy right now’. But most people never budget the ‘sacrifice’. They never save to pay the debt. In fact, some even think it is ‘free money’.

Credit card companies love such thinking but credit card companies do not realize that they have raised a culture of spend and forget. Once there is a slight correction in the market and the person loses their job, then he cannot pay anyone and the first to suffer are credit card companies.

America as a nation has become a ‘nation of  debtors’. Our government is in debt to their eyeballs but tells us only a ‘rosy picture’ to keep us from panicking. The fact is the ‘emperor has no clothes’. As a society in general we Americans have become excessive spenders, living it large, no regard to future.

Credit card companies for their own good should stop easy credit. Otherwise they will see huge defaults and may take the company down.

If you have to have a credit card, get the lowest cost card at ‘Look up credit cards dot com’. Please use credit cards responsibly. It is your future at stake!