# Stupid Debt



## Purple (21 Jan 2008)

How do people on a low income/ with low disposable income manage to run up credit card debts of €10’000 or even €20’000? 
It’s such a stupid thing to do. Given that people are adults and presuming a basic level of intelligence how can they let this happen? 
The reason I am posting is that the sister of a close friend is in the middle of a court case because of debts and moans about having no money but still has the big flat screen TV, the fancy kitchen etc and won’t downsize the 4X4 even though she only has two kids.
People who end up in that sort of a predicament don’t deserve any sympathy.


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## ninsaga (21 Jan 2008)

What strikes me is how low income have high credit limits on their cc's - or is that just down to the cc companies acting someway 'irresponsible'


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## Purple (21 Jan 2008)

ninsaga said:


> What strikes me is how low income have high credit limits on their cc's - or is that just down to the cc companies acting someway 'irresponsible'



Or how they blame the CC companies for giving them the high credit limits. That sort of excuse stopped washing in about second class in primary school. 
If someone ends up in the crud with debt it’s nobodies fault but their own. I say this as someone with a very big mortgage; if things go pear shaped and the bank take the house I won’t blame them, the government or my parents. If I enter into an agreement and I break my end of that agreement then I have to suffer the consequences. It’s that simple.


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## Caveat (21 Jan 2008)

I agree with you but as an attempt to explain (not excuse) this behaviour, I honestly think that a lot of these people are very unhappy, if not depressed.  I think spending whether it's for the home, on a car, a holiday etc is probably a more common way of providing a quick fix for depression than we realise.

If your state of mind is is a little confused/unstable as it is, it's very easy to bury your head in the sand regarding mounting debts.  It's illogical of course but unhappy people do it.


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## pinkyBear (21 Jan 2008)

I have to say I would agree - if we want anything we save for it - we dont really have that much at the moment as we are doing a good bit of work to the house and so far have spent 20K in doing so - no loans - all money that was saved..
But also what is annoying is when some one posts in about having debts or a huge mortgage and advise is offered - and then rubbished.

When we started out we took in tenants and dis what ever we could - 2 jobs at one time to get the monies we needed to get the money together to do the house....

bewildering...


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## homeowner (21 Jan 2008)

Purple said:


> The reason I am posting is that the sister of a close friend is in the middle of a court case because of debts and moans about having no money but still has the big flat screen TV, the fancy kitchen etc and won’t downsize the 4X4 even though she only has two kids.


 
Just out of interest, do the companies that are owed money have the right to seize these goods and sell them to cover debts?  Or is that what the court case is about?


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## Graham_07 (21 Jan 2008)

ninsaga said:


> What strikes me is how low income have high credit limits on their cc's - or is that just down to the cc companies acting someway 'irresponsible'


 
I think I read recently that cc companies cannot now give automatic increases in limits without asking you first. Unlike the situation before where you got a  increase even without asking for it. THat may make some poeple more aware of their limits.


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## BOXtheFOX (21 Jan 2008)

Purple said:


> How do people on a low income/ with low disposable income manage to run up credit card debts of €10’000 or even €20’000?
> It’s such a stupid thing to do. Given that people are adults and presuming a basic level of intelligence how can they let this happen?
> The reason I am posting is that the sister of a close friend is in the middle of a court case because of debts and moans about having no money but still has the big flat screen TV, the fancy kitchen etc and won’t downsize the 4X4 even though she only has two kids.
> People who end up in that sort of a predicament don’t deserve any sympathy.


When Eddie Hobbs had his show on T.V. we had great fun spotting the widescreen T.V., new kitchen, shelves of DVD's, and expensive furniture, in the background as the poor souls wailed at their debt.


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## michaelm (21 Jan 2008)

Purple said:


> . . presuming a basic level of intelligence how can they let this happen?


This may be why you are surprised or perplexed at such situations.  I wouldn't make such a presumption but rather I apply an '85% Muppet' rule; in light of such a rule Stupid Debt is unsurprising.


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## Sylvester3 (21 Jan 2008)

My parents ran up a massive amount of debt (£100,000 stg) on credit cards, and this was after consolidating previous cc debt into their mortgage - overall debt £150,000. My father came clean about it all last year when he was forced to sell the family home to pay for it all. He managed to hide it from my mum for years, even whilst she was racking up a debt herself. I talked to him about it as he didn't actually have much to show from it - and it all came down to snowballing debts over years onto new credit cards, without closing old ones, and getting cash out on the cc's to put in his account to cover regular direct debits. Lots of holidays and restaurant meals accounted for a lot of it as well.

It was a crying shame and they still haven't learnt from it. I discovered, when I was last there, that he had opened another cc. They still have a small sum left over from the sale of the house that is rapidly disappearing as they suddenly decide that they need to fill their new rented place full of new furniture and a new TV. I despair for them really - my wife and I work hard to stay clear of debt. We put off replacing our 14" portable telly for 5 years until we felt sure we could afford it.


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## RMCF (21 Jan 2008)

Although the banks are somewhat responsible for offering credit far too easily to people with not enough income, the ultimate responsibility lies with the individual.

But unfortunately in this day and age, people seem to be addicted to buying things. We are more materialistic than ever before, and people feel they need to have things that they don't actually need. If they get themselves into silly debt then they really have no-one to blame but themselves.

But I remember when I got my first credit card many moons ago, it was very hard procedure to get your limit increased. And you would usually start at around £800 or £1000 max. Now they increase your limit willy-nilly, and they often offer starting limits at £10K. I suppose they want you to spend on it.

I have seen a few TV progs recently highlighting this issue of personal debt. One on a few weeks ago showed a woman who had approx 22 cc's, with £102,000 on them. Their monthly household income was £3k per month, yet their minimum payments were £2k !! This is just crazy, but the woman seemed to be addicted to it all. But when she lined out the cc's, she had 6 Visa's, 7 Mastercards etc. Surely these companies are giving out cc's too easily if an idiot like this can get so many.


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## ninsaga (21 Jan 2008)

Purple said:


> Or how they blame the CC companies for giving them the high credit limits. That sort of excuse stopped washing in about second class in primary school.
> If someone ends up in the crud with debt it’s nobodies fault but their own. I say this as someone with a very big mortgage; if things go pear shaped and the bank take the house I won’t blame them, the government or my parents. If I enter into an agreement and I break my end of that agreement then I have to suffer the consequences. It’s that simple.



Don't get me wrong - I don't blame cc companies for people spending - its more in line with why do cc cos even allow such high limits for people with low incomes.


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## RMCF (21 Jan 2008)

BOXtheFOX said:


> When Eddie Hobbs had his show on T.V. we had great fun spotting the widescreen T.V., new kitchen, *shelves of DVD's*, and expensive furniture, in the background as the poor souls wailed at their debt.



I have always maintained that buying DVDs is one of the silliest things you could do with your money.

I used to do it and have around 40 or 50, but have not bought a DVD to own for quite a few years. Why? Because it dawned on me that I never watched them. Again it was the whole 'I must own that great film'. But after you buy them they lie doing nothing. I realised that if I ever wanted to watch it (usually happens about once every five years if most people are honest) then I could nip along to Xtravision and rent it. So the buying stopped. 

I frequent a Home Cinema forum and it shocks me how much money people have spent on DVDs. Many actually seem to take pride in telling you that they own 1500 or 2000, and that many are unopened. Whats the point? Again I think its the whole materialistic thing. Its like a one uppance over others. Recently I posted a question on the site asking if people think that their DVD collection was a waste. About 95% said yes. Some because they came to their senses, others because they had started to buy HD DVDs and realised that they would have to buy ALL the SAME discs AGAIN !!


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## Purple (21 Jan 2008)

I don't see why the credit card companies should be blamed (or the banks). If people blame them for their troubles then they are admitting that they are too stupid to run their own lives. Should the state then put then into care and take their name off the electoral register? Is god****e a legal term? If not then should it be?


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## csirl (21 Jan 2008)

> How do people on a low income/ with low disposable income manage to run up credit card debts of €10’000 or even €20’000?
> It’s such a stupid thing to do. Given that people are adults and presuming a basic level of intelligence how can they let this happen?


 
One of the reasons these people have low income i.e. poor jobs could be because they dont have much common sense. 



> I think I read recently that cc companies cannot now give automatic increases in limits without asking you first.


 
These people are generally very quick in asking for increases in limits. They regard the limit as a target and once they reach it, they need a higher target. I dont think it ever occurs to them that they have to pay it all back some day.



> I agree with you but as an attempt to explain (not excuse) this behaviour, I honestly think that a lot of these people are very unhappy, if not depressed. I think spending whether it's for the home, on a car, a holiday etc is probably a more common way of providing a quick fix for depression than we realise.


 
I would agree that a lot of these people are very unhappy - wouldnt you be if you were stuck in a low paid dead end job with no prospects. These people have very little to look forward to in their day to day lives. 

One behaviour that I've noticed is that low income people live in 2 x 6 month cycles. They spend 6 months of the year preparing for and talking about their summer holiday - usually some cheap resort in Spain etc. and the other 6 months of the year preparing for and talking about Christmas. Their lives are so bad that all they have to look forward to is these two annual events. They are the types who book their holidays in January and start chrismas shopping in September. They spend 6 months of the year in "holiday clubs" and the other 6 months in "christmas clubs".


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## casiopea (21 Jan 2008)

I think its easy to judge others, a lot of people in incredible debt actually have good jobs and have prospects and a lot of people with lower paying jobs actually have an abundance of common sense and no debt.  There is no generalization debt (stupid or otherwise) effects all types of people. While the debt is stupid more often than not the person isnt.

While I dont think credit card companies are to be blamed that doesnt make them blameless. 

I can see 2 types of people (anyone can fall into debt but in Ireland today these 2 categories that seem to be very prevalent) that are prone to falling into debt and therefore more prone to the stupid debt.  There is the young professional, everyone around him and her are buying houses, cars, xboxs, latest fashions, 2 holidays a year most of the peers have high CC debt.  Unless they hang out on AAM or have a parent or friend who explicitly points out the danger they are in they find themselves owing a lot of money.

The second type are young families, creche fees, cars, kids, pressure to keep up with jones, not wanting to let your kids down at christmas time, Mortgage etc.  slowly and surely bills consume all the salary and living is off the CC.  This group are more savvy than the first but are caught in a debt trap of types.

Getting out of debt is like dieting - every new year you swear you'll lose it this year.  You read testimonials, you follow books perhaps but there has to be a click inside you to make you want to lose the debt to make that ultimate step.


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## Graham_07 (21 Jan 2008)

casiopea said:


> you follow books perhaps but there has to be a click inside you to make you want to lose the debt to make that ultimate step.


 
The best click is the scizzors cutting up the cc !


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## Guest127 (21 Jan 2008)

I have a friend who while he didn't quite snigger or sneer, definitely thought that I was a penny pincher when it came to betting. . When I stuck a £5 on a horse on the tote he  bet at least £100 and usually more with the bookies. more than once he placed bets of £250 'to get out' as he phrased it himself. He just couldn't understand how anyone could enjoy a small fun bet. In the end he too  had to sell his house and downsize. To be fair he now won't go to a dog track/racecourse and avoids bookies like the plague. So he doesn't bet at all anymore. It's an addiction and with internet betting its very easy to get into debt. Personally I  still get as much craic  out of a €2.50  football trixie (cost €10) as ever and if I win so much the better but I also know its a mugs game and you just won't make money gambling, but stand to lose a lot if you get sucked in. Imo internet gambling is going to cause serious debt and I don't know how it can be monitored.


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## MissRibena (21 Jan 2008)

At the end of the day, I believe the individual has the ultimate responsibilty for their debt but there are a couple of things that do make it difficult, especially with the first type of debt casiopea described.

Ireland is a very materialistic place, where materialism is encouraged at every turn and I would go so far as to say that if people woke up all of sudden the economy would be in bother.  Every time you turn on the TV, browse a portal website, go to the cinema, stand in a bus queue, watch sport, even in the doctor's waiting room there are constant ads for 'stuff' and experiences/lifestyles are only ever threatened for space by ads from banks on how to finance the stuff. We even had a delivery at work of a stash of car magazines sponsored by PTSB!  No car got anything other than 4 or 5 stars out of 5 - fancy that .  I reckon it suits a lot of big business, banks and the government to have everyone hemmed into jobs that they must hold down to keep their materialistic tastes and debt serviced.

If I can see that, then lots of others should too but many people don't question what they do or what they are told overly closely.  I don't think that independent thinking was ever properly taught to people around my age (30); some people just stumble on it or mature into it.  And lots of people don't have time to stand back and figure it out what with all the running and racing to and from work and gyms and constant entertainment merry-gorounds and buying stuff.  I just don't think they realise that they are not leading their lives but it is leading them instead.


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## Sunny (21 Jan 2008)

This thread is a bit sanctimonious isn't it?


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## Purple (21 Jan 2008)

casiopea said:


> I think its easy to judge others, a lot of people in incredible debt actually have good jobs and have prospects and a lot of people with lower paying jobs actually have an abundance of common sense and no debt.  There is no generalization debt (stupid or otherwise) effects all types of people. While the debt is stupid more often than not the person isnt.
> 
> While I dont think credit card companies are to be blamed that doesnt make them blameless.
> 
> ...


I don’t disagree with your groupings but the responsibility is still theirs. There is no excuse and no situation where living off a credit card for day-to-day expenses is ever a good idea. The first time the grocery shopping is done on a credit card is the time to sit down and cut back or increase your earnings. 
I suppose what bothers me is when people start to blame banks or credit card companies for their woes. We have too choices; we can live within our means and stay safe or we can borrow and gamble. When we borrow we should ask a few what if questions. If we don’t ask these questions or we ignore the answers that’s nobodies fault but ours.

I just don’t buy the “It’s not all their fault” line. It is, 100%. If things don’t work out based on actions that adults took then they have no-one else to blame.


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## Purple (21 Jan 2008)

Sunny said:


> This thread is a bit sanctimonious isn't it?


 In what way?


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## ClubMan (21 Jan 2008)

Sunny said:


> This thread is a bit sanctimonious isn't it?


Hypocritically pious? I don't see how...


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## Sunny (21 Jan 2008)

ClubMan said:


> Hypocritically pious? I don't see how...


 
Good use of on-line dictionary. You should of just asked for a definition!

Purple, I agree with your original post about people living beyond their means but some of the subsequent posts (ok one post) have a sense of self righteousness about them. For example:

"One of the reasons these people have low income i.e. poor jobs could be because they dont have much common sense."

"I would agree that a lot of these people are very unhappy - wouldnt you be if you were stuck in a low paid dead end job with no prospects. These people have very little to look forward to in their day to day lives."


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## casiopea (21 Jan 2008)

Purple said:


> I don’t disagree with your groupings but the responsibility is still theirs. There is no excuse and no situation where living off a credit card for day-to-day expenses is ever a good idea.



Yes I agree, its their responsibility, their fault - no argument.  

However I feel CC are happily exploiting this problem rather than trying to help.  The CC companies are a business at the end of the day (not a charity) however rather than upping limits without question - maybe they should ask customers (who repeatedly dont make repayments) how they are managing their debt? Point out facilities like MABs or AAM to them perhaps. In the first group of people I pointed (the young spender) they actually more often than not dont realize that this is not atypical spending.  They dont believe they are at fault, as they dont realize anything is wrong.  Often times the only people that know their CC balance is them and the CC company, the CC company could (if they wished) plant the seed of debt management.  Not only do CC companies up limits unquestioningly for this group when asked, but the CC company frequently write unprompted with "congratulations, your limit is now 2K higher" type letters.  

I am possibly being marvelously naive here, I just feel while the CC isnt to blame, they shouldnt exploit and profit on the problem.


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## MrMan (21 Jan 2008)

> One of the reasons these people have low income i.e. poor jobs could be because they dont have much common sense.
> 
> Quote:
> I think I read recently that cc companies cannot now give automatic increases in limits without asking you first.
> ...



Nothing quite like a nice bit of snobbery, how do those poor people get out of bed in the morning.


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## Purple (21 Jan 2008)

casiopea said:


> Yes I agree, its their responsibility, their fault - no argument.
> 
> However I feel CC are happily exploiting this problem rather than trying to help.  The CC companies are a business at the end of the day (not a charity) however rather than upping limits without question - maybe they should ask customers (who repeatedly dont make repayments) how they are managing their debt? Point out facilities like MABs or AAM to them perhaps. In the first group of people I pointed (the young spender) they actually more often than not dont realize that this is not atypical spending.  They dont believe they are at fault, as they dont realize anything is wrong.  Often times the only people that know their CC balance is them and the CC company, the CC company could (if they wished) plant the seed of debt management.  Not only do CC companies up limits unquestioningly for this group when asked, but the CC company frequently write unprompted with "congratulations, your limit is now 2K higher" type letters.
> 
> I am possibly being marvelously naive here, I just feel while the CC isnt to blame, they shouldnt exploit and profit on the problem.


The CC companies are businesses. If what they are doing is causing or contributing to a social problem then it is up to the people, through their government, to change the way they are regulated.
I just don’t accept the “It’s just young people and they know no better” argument. Either they are adults or they are not.


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## Sue Ellen (21 Jan 2008)

cuchulainn said:


> Imo internet gambling is going to cause serious debt and I don't know how it can be monitored.



My thoughts too.  I hate gambling and unless something is done about this it is going to cause many a family a lot of hardship.  We've already seen some very sad posts on AAM where people are badly affected because of gambling, be it internet or otherwise.


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## casiopea (21 Jan 2008)

Purple said:


> I just don’t accept the “It’s just young people and they know no better” argument. Either they are adults or they are not.



I didnt say that - in fact I dont think anyone on this thread is arguing that. The person who gets into debt is responsible for their debt - regardless of age - no argument.  

That doesnt mean businesses should get to exploit and profit from the problem.


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## ClubMan (21 Jan 2008)

Sunny said:


> Good use of on-line dictionary. You should of just asked for a definition!


Huh!? 


> Purple, I agree with your original post about people living beyond their means but some of the subsequent posts (ok one post) have a sense of self righteousness about them.


If the self righteousness is genuine and not hypocritical then surely it's not sanctimonious?


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## Klesser (21 Jan 2008)

Purple i totally agree with you. Its a shame how some posters are ruining your very valid points.  Let them eat cake and all that.
I got myself into a little debt before.  Kid got sick I didnt have health insurance,  had to go on 2 months unpaid leave so ended up living off credit card and taking out loans to pay for private appointments.  I couldnt stand seeing my baby in pain and was getting no joy from the public system.  Anyway thats the choice I make by working part time.  Its not always black and white greed.


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## MrMan (21 Jan 2008)

> The CC companies are businesses. If what they are doing is causing or contributing to a social problem then it is up to the people, through their government, to change the way they are regulated.
> I just don’t accept the “It’s just young people and they know no better” argument. Either they are adults or they are not.



I would agree, I saw it on a regular basis in a past life selling electrical goods, tv etc and all outr high end stuff was flying out the door because of finance 'deals'. People were paying 29% interest and basically paying for the appliance twice over two 5 years. The funny thing about it is that most of these people didn't have cc's cause they couldn't trust themselves which is just aswell. Very few people are willing to work towards something and want it straight away. I've felt it myself when I see the houses and cars out there at the moment and you think 'do they own it or are they up to their necks'. I don't understand the mindset of people who use cards and then ignore the bills and the consequences, but I don't think it comes simply down to poor intelligence. There will be a lot of people falling on hard times in the next few years because of things like this and I don't see how things will change unless the cc companies are made to operate in a more harnessed fashion.


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## Purple (21 Jan 2008)

casiopea said:


> That doesnt mean businesses should get to exploit and profit from the problem.


 How does the business pay its costs and continue to trade if it is not allowed to profit from offering credit to people?
How is the credit card company exploiting people by requiring them to honour the terms of the contract they signed?


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## ubiquitous (21 Jan 2008)

csirl said:


> One behaviour that I've noticed is that low income people live in 2 x 6 month cycles. They spend 6 months of the year preparing for and talking about their summer holiday - usually some cheap resort in Spain etc. and the other 6 months of the year preparing for and talking about Christmas. Their lives are so bad that all they have to look forward to is these two annual events. They are the types who book their holidays in January and start chrismas shopping in September.



I'm afraid I'm guilty as charged on all these counts (except that I don't like Spain as a holiday destination). Thankfully I earn enough not to be classed as "low income"


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## Purple (21 Jan 2008)

ubiquitous said:


> I'm afraid I'm guilty as charged on all these counts (except that I don't like Spain as a holiday destination). Thankfully I earn enough not to be classed as "low income"


Right, we can all look down on you now, thanks for the info


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## Luckycharm (21 Jan 2008)

casiopea said:


> The second type are young families, creche fees, cars, kids, pressure to keep up with jones, not wanting to let your kids down at christmas time, Mortgage etc. slowly and surely bills consume all the salary and living is off the CC. This group are more savvy than the first but are caught in a debt trap of types.
> 
> Getting out of debt is like dieting - every new year you swear you'll lose it this year. You read testimonials, you follow books perhaps but there has to be a click inside you to make you want to lose the debt to make that ultimate step.


 
Agree with this - having a young family in this country/esp Dublin is expensive, I keep a tight budget but just living day to day is expensive especially if you have creche fees etc


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## casiopea (21 Jan 2008)

Purple said:


> How does the business pay its costs and continue to trade if it is not allowed to profit from offering credit to people?
> How is the credit card company exploiting people by requiring them to honour the terms of the contract they signed?




No where have I implied or said that credit card debt shouldnt be paid, and I believe CC companies are entitled to run a successful business. Anyone who builds up credit card debt should pay the debt.  The credit cards companies lent the money and are owed the money - the debt should be honored.  My concern lies with how the CC companies look to encourage debt with some customers who are clearly struggling.  A simple example being pushing up credit limits continuously.  They arent a charity, I am not saying they should wave the debt, or the late payment fee but nor should they encourage gross over spending where the customer cant afford it.   Just because they aren't to blame doesn't mean they shouldn't act responsibly.

I agree with your earlier point, the responsibility does come back to the people (those both in debt and out of debt) to ensure these companies are correctly regulated.


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## Purple (22 Jan 2008)

casiopea said:


> Just because they aren't to blame doesn't mean they shouldn't act responsibly.


 Their responsability is to return maximun value to their shareholders in the medium term while acting within the law. They are doing so. If their actions cause a social problem then the law should be changed. Without some sort of self regulation this is the only option and in my view self regulation results in groups restricting access to their markets and a corresponding lack of competition with the inevitable high prices this brings.


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## casiopea (23 Jan 2008)

Purple said:


> Their responsability is to return maximun value to their shareholders in the medium term while acting within the law.



Again, showing responsibility to their customers (incl. people in debt), doesnt preclude them from making a profit, being a successful business and returning maximum value to their shareholders.


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## Purple (23 Jan 2008)

casiopea said:


> Again, showing responsibility to their customers (incl. people in debt), doesnt preclude them from making a profit, being a successful business and returning maximum value to their shareholders.



What are you suggesting they do (which does not give their competition a competitive advantage)?


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## casiopea (23 Jan 2008)

Purple said:


> What are you suggesting they do (which does not give their competition a competitive advantage)?



As I said up in #37 I agree with you that it begins with the customer themselves (including those of us not in stupid debt) to ensure via their government these bodies are correctly regulated.  This would effect all CC companies so their competitors don't have some competitive advantage.


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## Lauren (23 Jan 2008)

csirl said:


> One of the reasons these people have low income i.e. poor jobs could be because they dont have much common sense.
> 
> 
> 
> ...


 

Appalling snobbery.......Generally people in 'clubs' are actually planners and savers. They save to be able to afford the nice things in life like a nice holiday and a good Christmas......I have to say that if your income is on the low side and you join a 'club' to save, that would make you one of those WITH common sense.....


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## Peadar (23 Jan 2008)

> Appalling snobbery.......Generally people in 'clubs' are actually planners and savers. They save to be able to afford the nice things in life like a nice holiday and a good Christmas......I have to say that if your income is on the low side and you join a 'club' to save, that would make you one of those WITH common sense.....


 

Agree with this, surely joining a holiday club and Christmas club show long term plannng and an ability and willingness to save for the good things.


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## ney001 (23 Jan 2008)

csirl said:


> One of the reasons these people have low income i.e. poor jobs could be because they dont have much common sense.


 

 Doesn't sound like you were first in the queue for common sense either!.  People can end up in low income jobs for any number of reasons, lack of education, family responsibilities etc - it does not mean that they are stupid or lack common sense!

I also fail to see how going on a 'cheap' holiday to spain indicates a lack of common sense - would you feel better if they went to a 5 star resort in the South of France?

Yours is the most ridiculous and snobbish statement I have heard for a long time.


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## room305 (23 Jan 2008)

ney001 said:


> Yours is the most ridiculous and snobbish statement I have heard for a long time.


 
Give the chap a break - he said "could be". As a denizen of many a low paying job I can say that many (but by no means all) workers in such jobs do indeed lack common sense.


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## annR (23 Jan 2008)

I would say that there is a much bigger story behind many debt problems than is obvious.  The topic would probably be a very interesting social pyschology survey.

More and more I think that our society is about living through spending.  I know this sounds superior but spending has become so emotional when it comes to stuff like designer handbags and wide screen TVs that people are really childish about it (as in being totally emotional and not rational).  I think people like this have emotional issues and need to grow up.   They must be a salesperson's dream.  Of course I don't mean people who buy a handbag, I mean people who get into debt because of buying crap.

Of course, then there are people who are genuinely trying to cope but are struggling with the complexity of outgoings vs incomes and just how to manage it.

I think there are also people who have fallen on hard times and had bad luck or bad health and get into trouble.  This could in fairness happen to any of us.  However I don't think the OP was referring to these people.


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## MissRibena (24 Jan 2008)

I totally agree with annR.  

I really think that there is way more going on sub-consciously when people end up in the kind of 'stupid debt' the thread is about.  I think advertisers know exactly what buttons to push and some people are lucky (or a bit older/wiser) enough to see through it and others don't see it until it is too late, if at all.  I think that to credit card/financial institutions almost wait in the wings for the taste to kick in and get in on the act themselves at times (like the PTSB car magazine I mentioned earlier).  I think a lot of the "ads" use techniques that are very subtle and difficult to regulate.  Some programs are basically just infomercials but are still scheduled like a regular program and it's easy to see how after a hard day some of the stuff would seep into your head as fact rather than a sales pitch.

I look at shows like Expose (not often!) on TV3 and half the time it's actually an ad for luxury goods from BTs or wherever and it comes across that a) every "girl" obviously wants it (so is there something wrong with you if you're not bothered?) and b) every "girl" is worth it no matter how expensive it is.  Often it's a profile of just a single product, not even an attempt at comparing a cross-section of what's available.  And the show is mixed in with celebrity stuff that society seems to be obsessed with as if you can somehow buy your way into the glamour too.  I know it's just a TV version of magazines like "Now" but I think a lot of the show's content should be clearly labelled as an ad to remind people.

I also think the Overseas Property Show (I think that's the name of it) again on TV3 should have a similar warning because I can't see how it is any different to an ad because it's just a showcase for developments rather than the more usual format of following someone on a househunt.

I think the whole 'because I'm worth it' thing has a lot ot answer for.  How can any of us _not_ be worth it.  It's a pity they don't make it clear what the 'it' is though.


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## BOXtheFOX (24 Jan 2008)

Having previously worked in a financial institution that decided to launch a credit card I noticed that the credit assessment of an individual was left to a junior staff member with little or no banking experience. I was concerned about one of my customers who on a monthly basis was forcing debt on their credit card. She would simply ring our head office and ask for a further increase that was immediately granted. It had got to the stage where her monthly spending on her credit card was more than her monthly income. I was able to check her statement where over 90% of her spend was in Brown Thomas cosmetic department or Boots chemists. Despite my years experience in banking my recommendations to my head office fell on deaf ears. I insisted that my concerns be noted on her account but to no avail. I later moved on to another branch so this customer was no longer linked to me.
I don't know whatever happened to this account or this customer but I say that the actions of my head office was almost "criminal" in their total irresponsibility.


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## REMFAN (24 Jan 2008)

Banks should reward good payers with a decent limit and set a lower limit for those who don't have the means. When I was a student I had a student creditcard with e2100 as the limit. The limit on a student credit card is e600  Reward good payers, punish poor payers.


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## DrMoriarty (24 Jan 2008)

Banks/CC companies _hate_ "good payers" who clear their balance every month.
The more their customers rack up debt, the more profit they make. At rates of up to 18%/20%, in many cases compounding very nicely indeed, thank you.

My wife used to work for a large Irish bank and frequently came across exactly the phenomenon that BOXtheFOX describes.

Which is not to say "evil banks", but rather ...easy money?


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## tyoung (24 Jan 2008)

"Banks/CC companies _hate_ "good payers" who clear their balance every month."
Is that really true? I thought that banks get about a 1% fee for all cc transactions. While the best customers are those that carry a balance, banks still do well from those that pay off each month.
 In a broader sense I see the rise in debt and the fall in savings as a reflection  of changing nature of money. It just ain't what it used to be!
Negative real interest rates and the sense that somebody ( central bankers, governments) will bail  us out in a crisis  certainly discourages saving and promotes excessive borrowing.


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## diarmuidc (24 Jan 2008)

DrMoriarty said:


> Which is not to say "evil banks", but rather ...easy money


How does that phrase go? "a fool and their money ..."


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## Bronte (21 Feb 2008)

I've been out of Ireland for quite a few years and here's what I've noticed.  One of the biggest changes was all these teenagers driving brand new shiny cars.  New houses with top of the range kitchens and furniture and white goods as a right not a thing to earn or save for.  I had been wondering how everybody was able to afford it until I joined AAM and discovered everyone (lot of people) is buying everything on credit.  Last xmas I went into a furniture shop by accident and what was advertised was not the couches but the buy now pay later finance.  Truly shocked at this and I've concluded the Ireland is coping America and it's cut across all social classes.  People seem to be rolling over the debt again and again (consolidating) but an end will come.  One day there will be no equity left.  I also agree in relation to banks and credit cards.  The banks best customers are those who are constantly in debt and pay back something but not all every month.  They actually don't want people like me who pay on time and topload the credit card before I go on holiday.


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## BillK (21 Feb 2008)

How do you go into a furniture shop by accident?


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## diarmuidc (22 Feb 2008)

Bronte said:


> I've been out of Ireland for quite a few years and here's what I've noticed.  One of the biggest changes was all these teenagers driving brand new shiny cars.  New houses with top of the range kitchens and furniture and white goods as a right not a thing to earn or save for.  I had been wondering how everybody was able to afford it until I joined AAM and discovered everyone (lot of people) is buying everything on credit. ..


While I do agree people in Ireland are way too fond of credit  the Irish economy is in a pretty strong position, our gpd growth has been phenomenal and the job market is still pretty strong.



BillK said:


> How do you go into a furniture shop by accident?


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## Carpenter (22 Feb 2008)

This is a very interesting debate; gullible credit card holders with "little common sense" or "greedy" banks, who's to blame? Surely at the heart of the matter is personal responsibility, we are each personally responsible for our actions and inactions- be that running up a huge CC debt or failing to succumb to a salesman's pitch. I suppose a good starting point for each of us as consumers would be to ask ourselves: "do I want this or do I actually need this?".


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## csirl (22 Feb 2008)

I'm not sure that its all on credit. Ireland has a lower unemployment rate and higher average wages than most of the world. Unlike other EU countries, including UK, relatively young people in Ireland can earn a decent wage fairly quickly. I'm not saying that there hasnt been an increase in debt, but the increase in the % of people working and the wages they earn is probably the biggest factor.


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## Welfarite (22 Feb 2008)

Debt is fine once you have the ability to repay it, Bronte, and Ireland has earned that ability obviously since you were away. But, in the future .....

And I too would like to know how you can go into a furniture shop by accident?


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## ClubMan (22 Feb 2008)

Bronte said:


> I had been wondering how everybody was able to afford it until I joined AAM and discovered everyone (lot of people) is buying everything on credit.


This is a gross and inaccurate generalisation.


> People seem to be rolling over the debt again and again (consolidating) but an end will come.  One day there will be no equity left.


As an slight antidote to this diatribe:

Indo: "One-third of householders enjoy a mortgage-free life"


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## Bronte (22 Feb 2008)

Clubman there are an awful lot of people here on AAM who are rolling over their debt, I've personally know of plenty of people.  Remortgaging to fund lifestyle.  I take your point that there are many (generally older people who have no debt/mortgage or otherwise who own their own homes.  But this one third isn't going to help the rest are they?

Welfarite I'm not saying there is anything wrong with debt.  But I also believe that one shouldn't purchase what one cannot afford.  

Re the furniture shop....... it's a long story and ye wouldn't believe me but it's linked to the new 'Americanised' Ireland.


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## ClubMan (22 Feb 2008)

Bronte said:


> Clubman there are an awful lot of people here on AAM who are rolling over their debt


And lots who are not. You said "everybody".


> But this one third isn't going to help the rest are they?


Eh? So what and why should they? My point was a rebuttal of your point about "everybody buying everything on credit".



> Re the furniture shop....... it's a long story and ye wouldn't believe me but it's linked to the new 'Americanised' Ireland.


So "Americanisation of Ireland" made you go shopping? Give us a break. Do you not have a mind of your own...


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## so-crates (23 Feb 2008)

I am pretty certain that most banks in this country have bought into the whole corporate citizenship thing and while I entirely agree that debt is the responsibility of those that incur it, I do wonder how unsolicited mailshots telling you you have "pre-qualified" for a loan amount of say €10,000 but must avail of it by a set date aligns with good citizenship. They had to be persuaded to give up on the "Congratulations, you have qualified for a limit increase. You new limit is..." approach to making valuable customers, again this doesn't ring true in my mind with good citizenship. The subtle message of these methods is that it is okay for you to take on extra debt, the bank believes in your ability to repay. While this may not convince everyone, people believe in banks and trust their pronouncements on a persons fitness to carry debt. Historically debt would have been more difficult for an ordinary citizen to incur because they would have had to try harder for a loan and would have been harder pressed to repay it. Susceptible people find it easier nowadays to fall into debt, it does not mean they should be mollycoddled but perhaps lending institutions do bear a social responsibility towards their vulnerable customers and it would seem from anecdote (and probably evidence but I can't quote anything so I won't) that this is not being exercised.

Also, we are more exposed to debt in every day transactions, cashless systems where you are not handing over notes and coins can mean that people are less aware of what they are spending and less conscious of and connected to debts that they owe. Sudden prosperity, cashless systems and easy credit has resulted in a generation of avid consumers and willing, perhaps unaware, risk-takers. Although it is most certainly not confined to that generation, it is most prevalent there. I think part of the problem certainly was (and maybe still is) a lack of basic education on money management, their parents would have had for the most part a much smaller set of credit options and a more limited opportunity to avail of them and it wasn't a core part of the school curriculum. This puts naive people in a disadvantaged position.

Of course there is always the small number who appear to view the world as their oyster and the bill as someone elses problem, but not all people in trouble in debt are these people. 

The founder of the Grameen Bank, Muhammad Yunnus, believes that credit should be a human right, I would agree but we need to ensure that the correct education is provided early in life teaching that credit is a tool and not a habit.


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## annR (26 Feb 2008)

> So "Americanisation of Ireland" made you go shopping? Give us a break. Do you not have a mind of your own...


 
<rant>
It's not that simple.  I'm all for people knowing their own mind and personal responsibility but I personally find it difficult not to notice the commericalisation.  I'm sick of ads, shops, being marketed at with total rubbish statements some marketing droid made up.  It's pervasive.  You'd have to be a droid yourself to be immune.  You can talk about common sense, money management - unfortunatley as so-crates pointed out we're not all as on top of things as we ideally should be.  I notice this particularly if I have to do or buy something I've never bought before, or find myself in a situation I've never had to deal with.  If you are not informed about the intricate ins and outs of whatever it is, it can be a very confusing experience and I can easily see how people who are time pushed or confused are pressured.  A good example would be anything to do with health or "wellness".  It's all very well saying "be sensible" but sometimes you do, in spite of your common sense, find yourself in a health situation where you feel you have to do / buy something and are not equipped to make the right choice.  It feels like everything combined is pushing you to buy something no matter what just as long as you buy it.   Why why why do we still allow marketing and advertising to children?  Has to be the most unethical thing going.</rant>


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## Purple (26 Feb 2008)

annR said:


> Why why why do we still allow marketing and advertising to children?  Has to be the most unethical thing going.</rant>


I'd put the trade in organs from executed Chinese prisoners ahead of it but you are entitled to your opinion.


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## annR (27 Feb 2008)

It was just an expression .  .


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## tyoung (27 Feb 2008)

[broken link removed]

Here's a look at global credit card use, Ireland included.


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## Raskolnikov (28 Feb 2008)

You simply can't generalize a segment of the population.

For example, I have two friends, both in their mid-twenties, both university educated and both earning about the average industrial wage. 

The first friend is as canny as you can get. Lives comfortably without splurging and never buys on credit. Has his cash spread from high interest deposits, right up to sensible equities. He even saw the gold bull run a few years back and is all set to cash in. Prides himself on not owing anyone a single penny and from what I can gather, would have well over €100,000 (like a true Canny McSavvy, he keeps his worth close to his chest). Other than getting luck with one stock purchase, he accumulated everything earning a modest enough salary.

The other friend despite his education, is completely hopeless with his money. His only asset is his rapidly depreciating Hyundai Accent. Yet he has three maxed out credit cards, his bank personal and car loan and a credit union loan. Probably €40-€50k in debt with absolutely nothing to show for it. With him, I don't think he realises the gravity of the cash that he owes, whenever I mentioned it, he just shrugged his shoulders and said that that was life.


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## z104 (29 Feb 2008)

Maybe he's had a blast and has some good memories and experiences

The balance needs to be had, you can't expect people to work hard 5/6 days a weeks and save every penny. Of course you work to feed, cloth and put a roof over your head but you've got to enjoy some of your salary totherwise, what's the point. You will probably be dead by the age of 75 or not fit enough to enjoy life so when are you going to enjoy life. You should do it while you are fit and healthy enough to enjoy it.

Balance is good. Squirrling away every penny and not enjoyng yourself is bad as is spending without considering how much you'lll  have to work to pay it back.


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## so-crates (29 Feb 2008)

Niallers said:


> Balance is good. Squirrling away every penny and not enjoyng yourself is bad as is spending without considering how much you'lll have to work to pay it back.


Not to be a spoilsport but I would definitely disagree with you there. I don't think one is as bad as the other. Squirreling might seem a bit joyless but it does have the advantage of a more likely, tangible, long-term, benefit (bungee jump, great fun, but not exactly something you can live off in your seventies). People are too apt to assume that their own instant gratification (which is generally what we enjoy most) has more importance or relevance to their lives as a whole. 
Balance is good, yes, but great memories of fun that lasted for a few minutes which you pay financially over several years is not balance, that is craven consumerism. 
I can't advocate saving at the expense of living but I would advocate living within your means and if you are buying today's fun at tomorrow's price you simply aren't doing that. Why ruin a great memory with bitter regret?


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## z104 (18 Jun 2008)

With the way inflation is going it might be better to buy the fun at todays prices.


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## so-crates (19 Jun 2008)

3 and a half months Nialler - you been out enjoying yourself? 

That was exactly my point, pay cash (today's price) not credit (tomorrow's)


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## Bronte (19 Jun 2008)

I didn't think when I wrote back in February that the easy money was going to go so soon and the equity is gone for lots of people.  It's only been 4 months since and how quickly things changed.  
Anyway back to the furniture shop.  All the new big shopping estates look like America to me.  I went into a shop called Reeds I think, I was looking for bedcovers for a rented property and was truly amazed at the instore advertising for credit.  
AnnR - I don't do shopping, not in the conventional sense.  The last time I bought clothes for the kids was xmas, in Dublin, Penneys, nobody there, kids in middle of floor and tried on everything there and then (very relaxed it is in Ireland) purchased millions of clothes for about 150 Euro.  The rest of Ireland as far as I could tell were shopping in BT, I don't think they will next xmas and it's probably going to kill them.


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## Firefly (19 Jun 2008)

AnnR - I don't do shopping, not in the conventional sense. The last time I bought clothes for the kids was xmas, in Dublin, Penneys, nobody there, kids in middle of floor and tried on everything there and then (very relaxed it is in Ireland) purchased millions of clothes for about 150 Euro. The rest of Ireland as far as I could tell were shopping in BT, I don't think they will next xmas and it's probably going to kill them.[/quote]


I agree - better get to Pennys in November this year too!


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## annR (20 Jun 2008)

I was listening to the radio and they were talking about the crazy money people pay out for First Communions.  The St Vincent de Paul guy made the point that often it's not well off people spending this money on tiaras and marquees etc but less well off people.  I've noticed this myself, it sometimes seems to be that people who aren't well off or can't afford it are the ones buying the most crap.  Wonder why that is.


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## Purple (20 Jun 2008)

annR said:


> I was listening to the radio and they were talking about the crazy money people pay out for First Communions.  The St Vincent de Paul guy made the point that often it's not well off people spending this money on tiaras and marquees etc but less well off people.  I've noticed this myself, it sometimes seems to be that people who aren't well off or can't afford it are the ones buying the most crap.  Wonder why that is.



Anyone who gets into debt to finance this sort of thing is a fool.


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## ClubMan (20 Jun 2008)

Purple said:


> Anyone who gets into debt to finance this sort of thing is a fool.


Hey! Bit of respect there... It's a well known fact that mystical beings place great store in what you wear when presenting yourself in front of them to receive special magical vibes that they send down to (through?) you.


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## Bronte (17 Nov 2010)

This is an old thread but still relevant.  

Well yes in December 2009 things had really changed in Ireland and Firefly's advice to get to Penney's in November was so right.  It's now the shop of choice for some and many by necessity.  But certainly it's now full of hoards of people and hard to get to the till on many occasions.  Still my favourite shop along with the pound shop (nowadays the 2Euro shop) which are springing up everywhere much to my delight.   Lidl and Aldi are often mentioned in conversation as good places to shop whereas before you wouldn't be seen dead there nor boast about the bargains to be had there.  Restaurants are descimated in general but not everywhere.  There is still plenty of money in Ireland and I see a widening gap between the have's and have not's.  Many wealthy people are still very wealthy, they may have lost out millions on property values in leafy Dublin but their spending power has increased.  There was no seat to be had in Roly's Bistro when I dined there this year.  An upmarket East cost holiday village was theming and full of money, not celtic tiger days but plenty of money all the same, just more carefully spent and more hidden in keeping with the times.   The talk now is of emigration, loss of jobs and debt in hushed terms, but becomming more open about it.  Talk too of where to put any money if you have some, is it safe in the bank or that credit union and ending with the under the mattress decision.  Plenty of talk too about bond markets.   Depression, resignation and despair in some quarters and anger too.  Strange times indeed.


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## RMCF (17 Nov 2010)

I think I read recently that in a survey Ireland may well be the 2nd highest spenders this Xmas.

If true, does it show there is still plenty of money out there?


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## Sue Ellen (17 Nov 2010)

RMCF said:


> If true, does it show there is still plenty of money out there?



Or people still not copping on and maxing out the credit cards again


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## Leper (18 Nov 2010)

Great subject this and resurrected from the depths of the forum. Shows some of the people on here really think occasionally. More than one poster suggested that we educate people on how to manage debt along the way. Somebody else suggested that it was the 'under-achievers' were the people who couldn't come to terms with the reality of credit-card spend etc.

When I saw some people going wild during the Celtic Tiger and through false confidence taking financial risks (purchase of high-rise apartments in Bulgaria for example etc; tradesmen becoming self-employed within their apprenticeship also). The stories were good, but the reality was stunningly catastrophic.

We are told by alarmingly high earners on RTE that we should all bear the brunt of this crazy spending as if this will happen. Well, it won't and there will be squeaky bums around for years to come. Many will never recover.

And believe it or not the population is educated now to 3rd Level when even a 6th class primary school student could tell you that something borrowed must be repaid sometime. Good God, are 3rd Level Educators failing us?


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## Bronte (18 Nov 2010)

Leper said:


> More than one poster suggested that we educate people on how to manage debt along the way.


 
On that very point.  I remember recently some article about educating young people on debt management in Irish schools and it was a picture of students with one of the leading credit card companies sponsoring and I believe mentoring the students.  (Akin to McD teaching kids about healthy eating were my thoughts on it) I couldn't believe Irish parents would go along with it.  Has that changed?  Any AAMer's experience of this.


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