Our New Cash Based Debit Card Society

The good news is that those who have chosen to financially survive the times we live in have already paid off their credit card debt and basically stopped using all their credit cards. Or they pay their credit card debt off completely every month on a regular basis.

The bad news is that those who haven't or can't do this may not survive the present economic crisis because who can ever pay off credit card debt at 31% compounded monthly. I can remember the 500 dollar credit card debt that my family incurred in the early 1980s. We paid the minimum payments but put no other charge against the card and wound up owing more than the original 500 dollars after one year of minimum payments. This caused me to get very angry and just pay off the card when I could and to cut it up and throw it away in the trash. Unfortunately, many people now only have credit cards because they are out of cash and are in a catch 22 situation.

We should all be mindful of their predicament. Easy credit is not easy now nor was it ever. To think otherwise is just to live in self delusion.

So we see people using their debit cards(their bank accounts with a visa or mastercard sticker on the plastic card in place of their old credit cards. In this way they know what they can spend and when it is gone every week or month they just stop spending until they get another paycheck. In the long run this is one way to stay financially solvent.

So maybe this financial downturn has some very good things in it to teach us all. Maybe it will increase our savings as well as what we put into our safety deposit boxes or bury in our yards, in our walls, under our mattresses or even as the news reported recently in our cracker boxes with 100 dollar bills.

It sounds to me more like what people did in the 1930s when all the banks failed last time. Only this time most banks haven't failed, they have just stopped loaning us the money we need to run our businesses or buy our cars.

Once again just like the turn of the 20th century in 1900 we are a cash based society once again.

What was interesting to me was that the only retailers that really made a profit this Christmas season were Wal-Mart and Amazon.com. This says a lot about how serious the changes have been already in the last couple of years and the really intense changes caused by oil prices spiking at almost $150 dollars a barrel and the subprime debacle.

It is my belief that if our governments had listened to people like myself who all along warned everyone about the danger of subprime loans defaulting we would not be where we are now.

I think our governments were not capable of changing fast enough to survive what we went through because of the interconnectedness of globalization. A whole new system must be devised or we will go through this over and over again every few years. The present system just doesn't work anymore!