Families, Deep in Debt, Facing Pain of Growing Interest Rates

[midnight armadillo]

http://www.nytimes.com/2004/06/28/business/28DEBT.html?pagewanted=1&hp

...rates begin to swing upward. The process is almost certain to begin at a meeting of the Fed's policy makers on Tuesday and Wednesday. They are widely expected to raise rates a quarter of a percentage point and follow that with similar increases periodically over the next 18 months.

By several measures, Americans are more indebted than ever. Through the first quarter, they owed nearly $9 trillion in home mortgages, car loans, credit card debt, home equity loans and other forms of personal borrowing — accumulating nearly 40 percent of this total in just four years, according to published Federal Reserve data. But most of the debt is at fixed interest rates. Thus it will be unaffected initially as the central bank begins its much expected quarter-point increases in the so-called federal funds rate, now at a 46-year low of 1 percent. The federal funds rate, in turn, influences the interest rate cost of most household and commercial debt.

The article is about increasing Fed rates, and how this will effect the housing market which is already going down, according to one builder.

I must say, the family profiled here sounds like a bunch of twits - why would you plonk down $16,000 in credit card debt just for home remodels? It didn't sound like the place was falling down, and if it needed to be done that badly when they were out of money they could have DIY'd it.

[Baltimoreboy]

1. Deep in debt, tell me about it

Welcome to my world and the world of the Bush economy.

[Boomer]

6. Give me a break

The economy may be lousy, and that really sucks, but the sane response to that situation is to budget carefully. Spending money on luxuries, paid for with the burden of heavy credit debt, is just plain stupid.

I'm more than willing to blame Bush, the government, and corporate CEOs for undermining my ability to earn more money than I do, but it's not their fault if I choose to spend more money than I'm making. This family was not forced into debt by medical expenses or other bad fortune -- they walked into it of their own free will.

Too many Americans are seduced into heavy debt by our consumer-driven society. Eventually, the debt is going to come due and they are going to pay an even higher price for their inability to resist the message to spend, spend, spend.

[Baltimoreboy]

9. Did you read this?

"By several measures, Americans are more indebted than ever."

I sure as hell know I am. And no, it's not on the goodies of the world, it's on getting by.

[redqueen]

15. I used to use my cards for FOOD when my check didn't stretch

And I'm SURE I'm only one of MANY.

:grr:

[Nadienne]

18. Ditto (n/t)

[Delano]

39. Yeah. I hate the smugness of the well-off.

Like my wealthy repug Mom who has almost NEVER helped me out since I left home - she didn't even help pay for my college tuition.

She says things like "You should set aside 10% of your income for savings" LOL! If I had anything left over, I'd use it to pay down the damn credit cards!

Many people seem to have no inkling of what it's like to live on less than $30K per year, esp. in very high-cost areas like NYC and SF.

[Deja Q]

51. So seduction is free will? Ditto for our economy? There is no tomorrow.

Many salespeoples' tactics is to suggest you're worse off without it.

Our economy is also based on the spend-more and discard philosophy.

And when I lose my job, I will discard myself. Though my debt amounts to nothing in the grand scheme of things, it's the politics that counts.

Of course, I could bop off right now and leave them hanging with more, but oddly enough I want to live.

But *, terrorists, or peak oil will take care of eveybody's debt problems in the end.

Cheney them all, I'm going to live for today. There is no tomorrow.

[anelson]

2. The debt article hits a huge point...

what i find amazing is the family detailed here in the story are extremely cash strapped, and can barely make their basic payments. Still, they are giving $125 A WEEK to their church!! that is 500 a month!! WTF?? It seems to me that if they are in such bad financial shape, they could do 2 things:

1. Don't do home improvements you cannot afford to pay off in less than 2 yrs...

2. Cut back on the tithes folks! you could even rationalize it by saying that God wants you to be financially solvent and responsible...

These folks really need some fiscal discipline....

[AP]

4. They probably consider both investments.

The don't know when the real estate market is going to crash, so they do the improvements to get a return. (And maybe labor is unignorably cheap right now.)

Lots of people look to their church for not only spiritual returns but as a source for business -- it's a netwokr where everyone helps each other find business. Haven't read the article, but maybe the guy makes 600 bucks worth of business connections for each 500 he donates.

[salin]

23. Not to mention an actual investment

in many churches folks are prone to say over and over again that what you give to the church will come back to you... and many interpret that to mean somekind of financial investment. Have heard the phrasing on various occaisions that tries to make the "financial investment" angle per giving money to the church. Seems pretty superficial and cynical to me. Some how I don't think the idea of sacrifice as demonstrating devotion to God (eg tithing) is meant to be viewed as a self-centered investment tool ("give to God so you can reap biggern financial rewards..!")

[SCDem]

11. damn I hope they are giving equally as much to their kids 529 college

savings (they do have one don't they if they can afford to be giving $125 to their church)

[democratreformed]

17. Actually, in some churches, it is a requirement.

I have never done it, but I have family who "tithe" faithfully. It is a requirement of their church and their faith. My grandma told me once that one of my uncles had his best potato crop ever when he "tithed" his 10% to the church.

I will spare all of you what I think of this practice and the belief that GOD made my uncle's crop good b/c of the "tithing".

[salin]

25. I believe that to stay in "good standing" in the Mormon church

one must tithe to the church. And that in some heavily Mormon communities being in good standing within the church is required for business (eg people frequenting your business), for holding political office, etc.

[DocSavage]

3. Thier responsibility

It is thier money, let them spend it the way they want, however, if they take out a loan with a variable rate interest rate, and rates go up. Well, they signed thier name.

[IrateCitizen]

20. While such a "responsiblity" view works on a micro level...

... it fails to address some of the cascading effects on the macro level.

For instance, this kind of debt-up-to-your-eyeballs described in the article is far from the exception in America -- it is more like the norm. Now, let's say that a few people in such situations experience a home foreclosure due to their inability to keep up with payments (not a stretch, considering foreclosures were up 45% last year).

The family in question ends up out on the street, and will possibly be on the road to public assistance -- which means more tax dollars diverted to those purposes. While the family who lived beyond their means certainly deserves some blame for this, some should also be shouldered by both the financial industry's predatory lending practices, along with a lack of oversight by government in legitimizing said practices. Furthermore, if one home on a block is foreclosed, it actually serves to push DOWN the value of all the other homes on the block in turn -- something that can result in other homeowners having mortgages actually in excess of what their home is then worth.

If this happens enough, then it actually becomes less attractive for homeowners to keep up with mortgage payments. After all, if your 30-year mortgage was for $250,000 and has 27 years remaining, but your house is now worth only $180,000 -- what incentive do you really have in remaining, especially if you're stretched tight in making ends meet as it is.

If this scenario plays out, you have a cascading effect on the economy that will be devastating, considering how much our economy depends on consumer spending and making minimum payments on debt.

[gpandas]

5. many americans need to learn...

what delayed gratification means. the amount of interest paid by consumers is stunning. using a credit card to pay for "flesh colored christs that glow in the dark"(thanks, bob)is just stupid.

[AP]

7. Many banks need to do due dilligence on their customers and not expect

government and society to assume ALL the risk for their loans to people who shouldn't have access to credit like this.

Americans are optimists. They think things will get better. They feel like they're making investments in the future (who could blame anyone for thinking that 25K/yr for tuition is going to pay off with a a good job?).

Generally, that's a good thing.

[gpandas]

8. so, do you think it's okay...

to spend beyond your means, because things might get better? do you realize how much these optimists lose to interest?

[AP]

10. No. But I blame banks not doing their due dilligence before I blame people

I grew up thinking that I needed to behave sensibly so that I could get credit. Now they give credit to everyone.

Leveraging growth is one of the most sensible things to do as a business. A business should borrow to the maximum limit that they can and then grow.

But in business, nobody would lend to a business that doesn't have a pretty good chance of paying back the loan.

I think a lot of individuals think that their lenders are applying the same critieria to them -- they wouldn't get so much credit unless banks were pretty sure the risk wasn't too great.

What they don't realize is that the government is not on the individual's side. It's on the bank's side. They have that credit card bankruptcy bill ready to pass to protect MBNA if things get too rough for them. They have Fannie Mae ready for a taxpayer bailout if their mortgages get unpaid. Look at the billions we gave the airines in the last couple years. The message the government gives is: businesses, take risks, because we'll get the taxpayer to bail you out. And they're giving that message with consumer lending (it's outrageous, to me, that student loans can't be dissolved in bankruptcy).

if borrowers get in trouble, taxpayers will bail out the banks and not the borrowers. And that's why banks don't care how much credit they're extending people. It's ridiculous.

[gpandas]

14. but why are some people aware of this and some not?

why do people sign agreements without reading them? why do americans think they need such worthless shit? i'm not talking about school loans, cars needed to live in this automobile centered culture, or homes that need to be payed for by mortgage. i'm talking about the majority of americans that charge every day items such as clothing, buy cars they cannot afford, borrow to maintain an image, get loans with adjustable rates and can't make the payment when rates rise and generally charge any purchase they can't afford. banks and corporations have no conscience, just not part of their structure, profit is their goal. they are greedy and underhanded and have huge interests in government. certainly not the right way to be, but certainly the reality of this soaring indebtedness. as p.t. barnum said, "there's a sucker born..". hope i don't sound freeperish, but there is such a thing as personal responsibility. i grew up in a poor family, and any borrowing was for emergencies only. blaming the credit companies for something that people do is not going to solve this problem. to me, it's like blaming the cigarette makers for someone that smokes three packs a day, or blaming guns for murderous criminals, or blaming roe vs wade for abortions, or,in general blaming anyone except the person doing these things.

[democratreformed]

19. 29.99 percent interest rates are a crime

And that is solely the fault of the credit card companies. So is the $35.00 they tack on if you are one day late.
Yes, people sign agreements. Sometimes, those agreements change without the consent of the original consumer. There have been numerous class-action lawsuits over these things.

Then, also, people do not expect to not be able to pay payments on time - be it due to lack of money or whatever.

That is what happened to me. My mother died suddenly and unexpectedly. My dad lost it. I was running his business. My personal stuff got lost in the wash. I made payments late. My interst rates skyrocketed from 10 - 15 percent to 24 - 30 %.

I still pay my payments. But, it gets very frustrating trying to make headway on debts that, conceivably, with making minimum payments, will NEVER be paid off. Seriously, I put my info into a calculator and it said they will NEVER be paid off.

I did pay off one last year. I took money that I should have saved for our business to operate on and paid one off. Now, our business struggles with cash flow on a monthly basis.

Anyway, as our business grows, I WILL eventually get them paid off. On that day, I will have the biggest party you have ever seen.

[IrateCitizen]

21. It's not entirely the fault of the credit card companies...

... it's also the fault of the legislators and regulators who allowed such practices to flourish.

I still think back to the days in college in which credit card companies would be out every nice day on campus. When I was in school, most of my fellow classmates didn't have full-time jobs that should have been necessary to qualify us for credit cards. But yet, it was perfectly legal for the companies to offer up cards to college kids with no appreciable income.

That is a perfect example of predatory lending.

[democratreformed]

22. So that's why their interest rates are so outrageous?

So they can pay for the ones who don't pay their debts? And that's why late fees and over-the-limit fees are the fastes growing segment of income for credit card companies?

For the longest time, the best part of living in Arkansas was that we had a law limiting interest rates. Then, they did away with that. Ugh!

[gpandas]

29. good luck paying off credit cards...

any agreement i've had with a ccc has stipulated that if i make late payments, the rates are subject to change. i'm not defending actions of lenders, i'm trying to say be aware of their tactics, and DON'T BORROW MONEY for things you can't afford. my mother died suddenly also, and dad was a complete mess for a long period. i still paid my bills, because i know how they can fuck your eyes out. i find it somewhat curious that you don't address any of my points, but choose to rerun your same, "it's the lenders fault" lament.

[democratreformed]

30. No, sir (or ma'am)

I am making no excuses for my behavior. The position I am in is entirely my own fault. But, yes, sometimes, life does deal us some blows that we are unable to deal with. For me, it was the death of my mother and the subsequent life events that happened as a result of that.

Again, many of those events were entirely my own fault. I expect no sympathy for the position I am in.

However, neither do I excuse credit card companies for making thousands of times what I originally got from them off of interest.

Why is it that sensible loans (house, car, etc.) can have interest rates and methods of computing interest that allow the consumer to someday pay them off while credit card companies can make $10,000 off a $1000 debt?

I do not excuse any particular person or group of persons in this fraud. Yes, it is the consumer's fault for getting into debt. It is the systems fault for allowing such outrageous interest. It is the companies' faults for taking full advantage of the system.

Yes, I need luck. But, I also was brought up to depend on pure hard work. And, with that, I WILL eventually pay them off.

[gpandas]

43. no teacher like experience,again,best of luck..

and you sound like you will have success.

[democratreformed]

44. Thank you!

for the wish of luck.

[AP]

35. It's ridiculous that the banks get such a huge cut of you trying to better

your economic situation.

You need to find a locally owned bank which has a greater interest in your economic success, and you need to get rid of that credit card debat and finance your economci development locally.

[democratreformed]

36. I know what I NEED to do

Knowing it and finding someone to help me accomplish it are two different things. Trust me, I have been trying for a couple of years now.

Someday, we WILL accomplish our goals. When we do, these banks around here can be damned. I will go to a different one.

Believe, I am seriously working on my debt. I am seriously working to solve all the problems that I created. And I have full faith that, someday, it will work. Another year or two - depending on what happens in this election - that's what I believe right now.

And, I cannot leave out my hubby, who is working his tail off as well. He's a great man.

So sad, that after 19 years of perfect credit, that we find ourselves in this position. Sad, but our own fault.

[AP]

34. A bank vs an individual. Who is in a better position to know about risk?

Of course an individual should have a sense of which direction their finances are going. But do you blame individuals for being optimistic?

Why are banks extending so much credit? Is it because there isn't a risk? No. It's because they know the gov't will get taxpayers to bail them out.

I will blame banks and Republicans before I blame an optimistic American trying to leverage their economic power.

I personally wouldn't take the risk, but then again, I think I suffer from being too cautious sometimes. I'd be a lot richer if I had taken a risk or two that others might have been more comfortable taking.

Incidentally, I think a lot of Americans don't appreciatiate the time value of money and the true costs of financing debt, but they really don't have ANYONE on their side -- the government is totally tilted on the side of people trying to make huge profits off the middle and working class.

You're going to do way more good with a government that more neutrally protects the interest of consumers than if you sit around waiting for people to realize what's going on economically on their own.

[democratreformed]

37. You have told it like it is.

My dad tried to tell me for years about the costs of consumer debt. At one point, I was pretty much out of debt. Then, my mom died. None of us dealt with it well. It was my first experience with someone so close to me.

I did things that I should not have done (a BIG understatement, by the way) and now I find myself in this position.

I don't want anyone to feel sorry for me. Neither do I feel it is right for them to be able to take advantage of my situation (which, I feel, these credit card companies have done).

For the record, none of my credit cards were new. I have had them for 15 years or so. I just never had much debt on them before. No, I didn't sign any papers way back then that said I would someday have 29.99 percent interest rates if I didn't keep a perfect record.

The interest rate hikes generally were announced to existing customers with a little letter that said "Hey, guess what..... and if you don't agree, you are welcome to close your account."

Like I said, there were numerous class-action suits regarding those - most notably (for me) Sears. In the Sears case, I think I received about $20 as a settlement for them hiking the interest rate on existing debt just b/c they wanted to - not b/c of late payments.

In short, I agree with you. Consumers have noone on their side. That's the way it is. That's the way it will most likely stay.

[gpandas]

50. lending institutions play dirty because...

they can. lack of proper regulation is a great unsung demon of the repugs. the financial disaster of our infrastructure is a looming tragedy, abetted by repugs who don't think we need to pay taxes.

[Delano]

38. Yes, but there are many of us who have used credit just to survive...

not to consume. The cost of housing is through the roof, especially here in the SF Bay area. I'm in no position to buy a house, rent is outrageous, groceries and gas cost 20~30% more than in other regions.

We very seldom treat ourselves or buy cheap plastic crap, much less durable goods. Even if I never bought any unnecessary items, and limited all Christmas present spending to say $200, we would still be in almost the same amount of debt.

The cost of living is only affordable to normal people in places like tthe midwest now.

Friends here in SF are amazed at our income. They ask, "how do you get by on less than $30k/year?" and I tell them, "We don't. We're in hock and slowly sinking."

I drive an 8 year old paid for car, and my rent is $1300 for a very modest 2 bedroom.

I wish I had the time or energy for another job, but with 2 kids, it just doesn't seem feasible.

[democratreformed]

40. I am sorry for you.

I wish I could say the same. But, unfortunately, most of my debt is the result of stupidity.

I realize that there are MANY people who use their credit cards to survive. Survival is not the easiest thing these days - and hasn't been for several years.

You are right - prices are going up on everything. I can't imagine having to pay the housing costs in alot of areas. I am lucky. My house payment is $261.00 - very cheap compared to many many people's costs.

I really do think it's crap that CC companies are allowed to prey on hard-working people.

[Delano]

41. $261 A Month!!!!!!

I could live like a king and pay off my debts in no time if my rent was that low!

Of course, I could never find a house payment like that here in SF, even 15 years ago...not even a 1 bedroom condo...

[democratreformed]

42. Yes!

Unfortunately, the wages go along with it here in Arkansas. Uneducated people are lucky to make $6.00 - $7.00 and hour unless they have connections to one of the few remaining manufacturing plants.

I am lucky there, too. College educated, I am - so I have a pretty good job. My hubby does too.

But, yes, I am lucky to have that kind of house payment. My house is nothing great - we bought it from my uncle 17 years ago and he built it himself. It appraises for $40,000.00.

It's a house, though, and it has all the amenities of normal houses - it's just nothing fancy.

[gpandas]

49. i'm talking about people that could have a decent living...

but are not satisfied, and still get in debt, not the unfortunate ones such as yourself. i had to leave my home town to get a decent job. it was tough at first, and i missed old friends. i've lived in ohio for 38 years now and it is my home. have you considered moving from sf?

[IrateCitizen]

12. Embracing the American Way of Life -- a lifetime of debt

Did anyone here happen to catch the segment on NOW this past weekend where David Brancaccio interviewed Elizabeth Warren, author of The Two-Income Trap?

Prime among their topics of conversation was the re-installment of Alan Greenspan to a 5th term as Federal Reserve Chairman. Warren did a good job at highlighting how Greenspan viewed American families -- that his primary concern was not that families attain some sort of economic solvency, but rather than they maintain the ability to keep on making those minimum payments while taking on more and more debt. She also showed how this highlighted Greenspan's real constituency -- the Banks and Wall Street. In fact, during many of his Congressional testimonies, Greenspan actually promoted ideas like "borrowing against home equity" as a means for families to maintain consumption patterns in order to grease the skids of the consumer economy -- and he said it with little concern as to how families are actually going to get out from under this increasing load of debt.

Warren cited the statistic that home foreclosures have gone up 45% over the last year. She also explained that more and more people were getting variable rate mortgages, which were based on their ability to just barely make the payments at the time of the mortgage -- and how they will be priced out when their rates increase.

This story also makes me think of something I read just this morning out of the book The Affluent Society by John Kenneth Galbraith. JKG may have written this book in 1958, but the following excerpt from pages 159-160:
Viewing this process as a whole, we should expect that every increase in consumption will bring a further increase -- possibly a more than proportional one -- in consumer debt. Our march to higher living standards will be paced, as a matter of necessity, by an ever deeper plunge into debt.... One wonders, inevitably, about the tensions associated with debt creation on such a massive scale. The legacy of wants, which are themselves inspired, are the bills which descend like the winter snow on those who are buying on the installment plan. By millions of hearths throughout the land it is known that when these harbingers arrive the repossession man cannot be far behind. Can the bill collector be seen as the central figure in the good society?

My grandfather, a man of an 8th grade education who worked in the steel mills of Western PA, talks about how he has not purchased ANYTHING on credit since the early to mid 1950's. When he had his home built, he paid for it all as he went. I think that my parents -- retired public schoolteachers of modest means -- have paid cash for every car they purchased, in full, for the past 20 years. I am thankful that as I have grown into my early 30's, I have come to realize the wisdom of such an approach and strive to emulate it. However, I also realize by looking around that this attitude is more the exception than the norm in today's society. The norm is more along the lines of the family profiled in the article, and a serious reckoning is looming on the horizon for people who have incorrectly bet that their wages will increase faster than their ballooning debt.

[Nadienne]

24. I saw it!

It seems to me that Greenspan's constituents would prefer an America full of indentured servants.

[redqueen]

26. I think they would

and the constant pornography of wealth on our teevees confirms it.

It makes me so sad ... all the lottos and half the shows on the Travel channel... we're too primitive... too easily seduced by pretty shiny things.

:(

[gpandas]

46. carl sagan once wrote that he was amazed...

by how american people were so easily misled

[IrateCitizen]

47. Speaking of Carl Sagan (and other scientific geniuses)...

I'm often amazed at how they are so consistently liberal, even socialist in their attitudes and beliefs, when the rest of America so readily accepts the slow drift toward quasi-fascism.

I wonder if there's anything to consider in such a trend???

[gpandas]

48. definitely. imho that brains=liberal

[IrateCitizen]

27. "an America full of indentured servants"

Yup, you hit the nail on the head. Otherwise, why would he be touting strategies guaranteed only to further sink people into debt in order to maintain spending habits, as opposed to approaches geared toward minimizing debt and establishing financial solvency.

Greenspan and his ilk know that the current US economy depends on citizens continuing their profligate consumption habits. Should that consumption dip, they are fully aware that a lot of bills will come due -- many that stand to significantly hurt their ability to make unfettered billions.

Greenspan is NOT a friend of anyone residing in the bottom 98% of wealth-holders in the US. It's a shame that the only member of Congress who consistently lays bare this fact during Greenspan's testimonies is Bernie Sanders.

[Nadienne]

28. Makes you wish more people watched

"Now", eh?

:)

*sigh*

[redqueen]

31. It's a shame yes, and also very telling

We cannot relax once Kerry is in office.

[IrateCitizen]

13. KICK!

:kick:

[Maestro]

16. Stay away from credit cards and unnecessary

car debt, but investing in your home is something different. The value of the home will certainly go up and if it is an equity loan that allowed for the improvements a portion of the cost can be deducted for tax purposes. I have no credit card debt, but I am in debt with my house including improvements, but I don't see that as a problem since I can comfortably make my payments and my house value has gone up. I just need to stay on top of the increase in value and protest any appraisals that seem out of wack!

[MadHound]

32. The consumer debt bubble that is about to burst

With the average American having credit card debt averaging $2900.00, rising interest rates very well could be the straw that breaks the camel's back. With no real manufacturing base, and an anemic tech and service, the US economy has been forced to increasingly rely on consumer spending to fuel the economy. During the go-go '90s when mass media was touting millionaires made every minute(at least paper millionaires), there was a feeling of trying to keep up with the Jones. The latest car fad, food fad, clothing, tennis shoe, the list of material mania was endless. The economy was supposedly great, inflation was supposedly defeated for good, and hey, everybody was charging it. And the bills just rose.

The idea of consumer credit is instilled at a very young age now. Back in the eighties, it was the big thing that credit card companies were papering campuses with card apps. Now my fourteen year old niece can get a card:eyes: An entire generation is being raised on plastic, and it is only going to get worse.

But I think the bust is just around the corner. Those who are in charge, those rich elites, are just looking for a buying opportunity. With the passage of the bankruptcy restriction bills in Congress right now, companies, corporations, and certain individuals will soon be able to put the screws on indebted people in order to extract land, goods and concessions from them at greatly reduced rates. This is simply a repeat of scenarios from the Great Depression, but on a much grander scale. Yes, these people want to make Americans into indentured servants, bound body and soul to the land and it's lord. Pulling the rug out from under Americans deep in debt is but one tool in their bag of tricks.

So my suggestion to you is to stop playing the credit card game. Cut them up and throw them away. Pay them off as soon as possible. The storm is coming, and you are being warned now. It is up to you to take the actions needed in order to survive it.

[democratreformed]

33. I've been aware it is coming for a few years now.

What are all of us going to do who get "caught"? There's no way I can get mine paid off in time. I've already made it better, though. Hopefully, this year, I get get another one or two taken care of.

[Deja Q]

52. I would rather die.

I am servant to nobody.

I did what was expected of me.

What those in power are doing right now are merely springing the trap they led the ignorant sheep into.

Which is what I will do when the time comes. I already know I'm mutton. It's only a matter of when.

There is nobody as free as a dead man.

And if they take the goods I purchased, then the debt is gone. It's bull pattie that they can have things both ways. Big smelly bull pattie. Cheney them.

[Maestro]

45. Well my financing of our home improvement

is at 4% over ten years with a credit union. It is a very comfortable payment, my house goes up in value and I have money left over. It was no-brainer for me. Although I do not have any credit card debt. Credit card companies are simply raping the young. When I was in college there were so many companies offering pre-qualification for poor students. Just ropin' in young and keeping them enslaved with interest rate cards. Yuck!