Although I still consider myself to be young, the inevitable reality is that I am 36 and rapidly approaching 37. When I was younger it was difficult to establish a line of credit. I remember living in my apartment and wanting to buy some new furniture. I shopped around a bit and nobody would give me a loan so I could have a new place to rest by butt and prop my feet up.
Loan? Forget it
Credit card? Forget it.
So I went down to the bank and took out a secured loan (that is, I already had the money) for the amount of the furniture I wanted and then bought the furniture. I spent the next few months paying off the loan with a very small amount of interest.
When it was done, I had established some credit and was now eligible to get credit cards or other loans. It wasn’t that difficult, but it was drastically different than how things are today.
Today, you are “pre approved” for all kinds of loans and credit cards. People with horribly bad credit can get all the credit they want if they don’t mind paying the obscenely high interest rates that go along with it.
Maybe the credit card companies are playing the odds because they know some poor college kid is going to rack up $10,000 worth of Pizza and not be able to pay off the interest for a long, long, long time.
A lot of people want to blame the government for the credit crisis we are in, but the government is not solely to blame. I’d say that the majority of the blame rests with the institutions that continue to give out loans and money left and right to anyone that says they want a loan or credit card.
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