Many would get lines of credit because they have lower interest rates, which he said the banks give to people "inexplicably" when they know it's going to get them in more debt. They then pay off the credit card with the line of credit, but within a few months, the credit card is right back up to where it was before. Then, with minimum payments only, the holder of the card takes potentially years to pay it off, if ever, leaving them in what seems like a hopeless spiral. In cases like that, bankruptcy was the only option, which means everyone loses as those they owe money to will never see it.
The author described scenario after scenario like this. He said, "Keep in mind that the above situation is very normal for us. This is something we see every week." Week after week?! Almost as if he was asked, "How did this happen?", he goes on to say, "Increasingly, life has simply become too unaffordable for many. The temptation to spend is too great, and access to cheap debt too easy. When the gap between what people need or want, and what they can afford with their incomes becomes too great, credit is used to fill the gap. Interest kicks in, and the cycle begins."
That's basically it isn't it? People thought they were doing the right things, but it always comes down to the temptation to spend. Cheap debt is out there and when the income isn't there to get what you want, credit is used to fill the gap. Then, as he puts it, "interest kicks in, and the cycle begins." That awful cycle.
His article doesn't end on a "This is what you should do" type of ending. Sadly, he just says, when he has just finished describing the awful cycle, "Unfortunately, that's a lot more 'normal' than you think."
We are determined (or as the blog was originally called "debt-termined") to not be normal, at least the way he described normal. By God's grace, we made huge steps forward last week. We are encouraging our kids to not fall into the traps of overspending, to make wise choices now. This week the older boys got work in a green house nearby. So that's a big answer to prayer as they both need the money for upcoming school, but we also want them to start dreaming big - a house, a car...all debt-free! Imagine? Once my daughter is done paying for all her piano studies, than any money she makes will go towards those same things. We trust that God will supply all their needs and that they won't fall into the traps of cheap debt. Is it possible to dream this big? We think so.