Remember when people on reddit had a clue?

http://reddit.com/r/science/info/66h9l/comments/c02zjj2

by run4yourlives • 19 years ago

14 22 19 years ago

cperciva3• 19 years ago

A shockingly large number of Americans don't understand how debt works. I suppose this must apply to people in other countries as well, but I haven't noticed as much fiscal ignorance coming from non-Americans. Among the crazy comments I've heard recently from outraged Americans:

"You can't take away my house just because I stopped making mortgage payments! I live here!"

"I missed three credit card payments, and now the credit card company has raised the interest rate from 16% up to 28%! That should be illegal!"

Maybe people are just taking cues from the US government -- after all, if the government is going into debt by over a thousand dollars per year per person, why shouldn't individual Americans?

run4yourlives• 19 years ago

Rather sad actually. The more I read, the more I think economics should be mandatory in high-school.

rms• 19 years ago

It was in my (wealthy, suburban, white, public) high school. At the non AP level, it was dumbed down beyond recognition.

curi• 19 years ago

Because mandatory history, English, Math, etc classes helped anything?

disconnect2• 19 years ago

"I missed three credit card payments, and now the credit card company has raised the interest rate from 16% up to 28%! That should be illegal!"

Where I live the national limit on interest for Credit Cards is 16%, no ifs, no buts. If credit card companies benefit when people miss their payments they have an incentive to give credit cards to people who can't afford them. This, in turn, reduces the general level of prosperity in the country.

So, why do you think it -should- be legal for CC companies to raise the interest rates to absurd levels?

cperciva3• 19 years ago

why do you think it -should- be legal for CC companies to raise the interest rates to absurd levels?

Because someone who misses three credit card payments -- I'm not talking about someone who doesn't pay off the credit card completely, I'm talking about someone who doesn't even make the minimum payment -- has a significant likelyhood of going bankrupt and never paying off the debt.

Not making credit card payments on time exposes you as a poor credit risk; why should those of us who are good credit risks pay higher rates to subsize you?

mwerty• 19 years ago

Who decides what levels are absurd? What is magical about 16%?

mixmax3• 19 years ago

I think this attitude is largely to blame for the current financial crisis in the US. People have come to see it as their inalienable right to have access to large amounts of debt, without much thought as to when and how it should be paid back.

This is a dangerous situation, as we are beginning to see now.

apotheon• 19 years ago

No kidding, it's dangerous. It has gotten so far out of control that even the decision-makers at banks are afflicted by this problem -- else the sub-prime mortgage crisis would never have happened. Without middlemen (banks) fundamentally failing to understand basic economics, we wouldn't have a crash.

gojomo• 19 years ago

Previously in News.YC:

This is what happens when you lend money to poor people http://news.ycombinator.com/item?id=50853

"Turns out, if you're poor, you don't need to pay lawyers. You don't like the deal you just wave your hands in the air and moan about how poor you are. Then you default."

Then there's SNL's take:

"That's why I've developed this unique new program for managing your debt. It's called, 'Don't Buy Stuff You Cannot Afford'."

http://consumerist.com/consumer/clips/snl-skit-dont-buy-stuf...

mynameishere• 19 years ago

That really wasn't that bad as far as reddit goes. In spirit, he's somewhat correct: Mortgages are different in that the house is collateral. The things bought with credit card debt [1] are usually long gone before bankruptcy strikes. In some cases, a forfeited house could actually be a net gain for the bank when a person defaults. The big problem now is that people will be losing 400K houses on 600K loans.

[1] Or government debt.

Remember when people on reddit had a clue?

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