According to an article recently published in the New York Times, credit card companies have begun accepting cents on the dollar to settle your consumer debts. While this appears to be the consumer “bailout” that everyone has been looking for, I maintain that it is an escalation of financial impetuousness. People are so enraged at all things institutional, that they are willing to stiff the first institution that they come across. And the credit card companies are stepping up by letting non-paying consumers off the hook.
Let’s face the reality of the situation (for the first time ever). People buy crap that they can’t afford. Whether the purchases are necessary or not is irrelevant. They spent money that they didn’t have, and now, with this trend, they are not being forced to answer for their irresponsibility. As a person who, like everyone else on the planet, has made a poor financial decision, this is infuriating. People should pay their debts. I am not against welfare programs in general, but I am against this. And the crazy thing is that the “welfare” is coming from card companies themselves. The card companies have determined that enough of us are deadbeats that they are just willing to give up, and let us out of our obligations.
As a personal finance expert, I find this entire situation offensive. Don’t get me wrong, there is supposed to be a happy ending for everyone. But the happy ending comes from the discipline and hard work in paying off your debt. This very practice of settling debt will be incredibly detrimental to my entire generation. There is glory in learning the hard way. The easy way out will bring people immediate relief, but will leave them with long term financial malaise.
What do you think?
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.