Neither a borrower ...
September 7th 2010 23:21
The US Federal Reserve surprised a few people in mid-January with a new set of rules on credit cards which were firmly skewed in favour of the consumer. The Fed's 1,155 pages of rules were welcomed by consumer groups which have long been pointing at the modern phenomenon of mountainous personal debt.
An economic realist once said: "When you get a credit card, technically you’re borrowing money from a bank. In reality, though, you’re borrowing money from yourself." We thought it would be interesting to collect a few more perceived wisdoms and salient facts on the subject.
More than 175 million new credit cards were approved in China in the first 11 months of 2009, up 33 per cent year-on-year.
US credit card defaults (defined as credit card debt more than 60 days behind on payments) rose steadily throughout 2009, finally reaching record levels in September. At that point, defaults were more than double the average levels of the previous decade.
In Britain, about one million families used credit cards to make mortgage or rent payments in 2009.
Australian mortgage, credit card and personal loan debts stood at A$1.2 trillion in December 2009, up 71 percent from five years ago and, for the first time, exceeding the country's GDP. "It’s a terrible, terrible sign," said University of New South Wales economics professor Steve Keen.
"He looks the whole world in the face for he owes not any man. (Henry Wadsworth Longfellow)
"The only man who sticks closer to you in adversity than a friend is a creditor." (Anonymous)
"Who goeth a borrowing, goeth a sorrowing." (Thomas Tusser)
"Before borrowing money from a friend, decide which you need most." (American proverb)
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