Are you being pandered to by personal finance bloggers? Do you bounce from one personal finance blog to another looking for daily validation of your “my debt is not my fault – it’s all the credit card company’s/government’s/lawyers/’fat cat’ banker’s fault” viewpoint? Is your RSS feed reader full of posts that cater to your longing for feeling financially responsible without actually being financially responsible?

This may be uncomfortable but it’s time for your credit card debt intervention. There are three words that you should know about your credit card debt that could very well change your entire outlook on your debt. These three words are not always easy to swallow but as they say, “the truth hurts”. Ready for it? Here are the three words that are true about your credit card debt: it’s your fault.

I hate to be the one to break it to you but it’s true: it’s your fault if you are in credit card debt (OK, I don’t really hate to break it to you because I would hope that someone would be able to tell me the truth even if it is unpopular to do so and I didn’t want to hear it at the time).

Who is NOT to Blame for Your Credit Card Debt

Your credit card debt is not the credit card company’s fault.

Your credit card debt is not the government’s fault.

Your credit card debt is not the “fat cat” banker’s fault.

Your credit card debt is not your parent’s fault.

Your credit card debt is not your credit card’s fault.

Your credit card debt is not Obama’s fault.

Your credit card debt is not “the system’s” fault.

YOUR credit card debt is YOUR fault.

I Hear a Sucking Sound

Are personal finance bloggers sucking up to you because they are afraid to tell you the truth? It’s quite fashionable to blame credit card debt on the evil credit card companies. Who are they to dare to charge us fees and interest – right? Lazy, self indulgent journalism revels in skewering the faceless corporations while salving the conscience of the “spend more than you earn” crowd.

Deception Should be Pointed Out

As I mentioned in an earlier post about usury & interest I absolutely abhor deceptive marketing tactics and dishonesty. I think that any credit card company that makes a habit of lying to customers and using trickery as their modus operandi should be burned to the ground (figuratively and financially and not literally of course).

There are certainly instances where companies (in many different industries) have acted unethically and deserve to shoulder some of the blame for consumer misfortune but those instances are not as likely as much of the kowtowing financial press would have you to believe.

That being said, just because you didn’t bother to read through your cardholder agreement or you were just flat out irresponsible with your money does not mean that you are absolved of the responsibility of having to face the consequences of your actions (i.e. if you make a late payment on your credit card then yes – you should have to pay a higher interest rate and you should get hit with a late payment fee, etc.).

What do YOU Think?

Do you think that there are other factors at play outside of one’s control and that credit card debt is not always the fault of the borrower?

Do you ever get the same sense that I do of being condescended to by a personal finance writer as if we are all just dumb consumers that are not even responsible enough to figure out what words like “due date” and “interest rate” even mean?

Do you think that I am being too hard on borrowers and too easy on lenders or vice versa?

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21 Responses to “Your Credit Card Debt is Your Fault: Stop Reading Self Indulgent Blogs”

  1. GREAT post Joel! Love it! The topic is also very scaleable as well in terms of buying a mega mansion one can’t afford, not studying in school, having little savings after years of work etc.

    Do you notice a lot of PF sites coddle CC debtors? Perhaps the ones that do are worried about upsetting their sponsors or affiliates? Blogging after all is a business to so many yeah?

    • Joel says:

      Thanks! I have thought this for quite a while but it was never more apparent to me than over the past weekend after a few posts/comments just rubbed me the wrong way on some of the various popular/semi popular personal finance blogs.

      I am not out to criticize people for getting into credit card debt because things certainly happen and although of course the best scenario is to never every carry a balance I know that for me personally as a student years ago without any savings to speak of using my credit card was actually a huge help to me as a lifeline of credit. Of course, if I was smarter as a college student I would have maintained an emergency fund to dip into but when you are young things happen and I am glad that I learned a lesson from those experiences.

      That being said, one thing that very much bothers me is when people get into credit card debt or just flat out make poor decisions and then attempt to blame their poor decision making on someone else. If someone gets into debt that is perfectly their right as an American but I am very much opposed to people DECIDING to get a credit card, DECIDING to spend more than they have in the bank, DECIDING to not pay more than the minimum payment (if at all), and then acting as if they had nothing to do with their predicament and it is all some 3rd party’s fault.

      I do not want to appear to be insensitive because I know that things happen as I have seen them first hand BUT I think before the situation can be fixed that one has to own up to their actions and take responsibility.

      I do think you are right that some (not all of course) but some personal finance bloggers tip toe around people with credit card debt because they are afraid to give them some tough love and maybe tell them something that they don’t want to hear.

      At the very least many bloggers tolerate the “It’s the credit card company’s fault that I got into debt” line of thinking that is prominent in some comments.

      Blogging is definitely a business to many but I also think that the best long term approach is honesty (for both moral reasons and also secondarily for economic reasons) because people may not like to hear it at first but I think people definitely respect and appreciate someone telling them how it is (Dave Ramsey is great at this and I love 98% of what he says because of course the Dave Ramsey and credit cards stance is that he thinks you should cut up all of your credit cards but for me I think it is somewhat ridiculous to not buy things with my cash back credit card and just pay off the balance in full each month and get free money rather than just use cash but to each his own).

  2. Yes, all good points. You may have to e-mail me privately those comments/articles that perturb you so I can check them out myself!

    I don’t understand why PF bloggers would “suck up” to their readers. Isn’t it usually the other way around, as some readers feel a particular blogger is like a saint to look up to?

    Guess I don’t read many credit card related articles, since I don’t understand the concept of paying expense debt to someone else, when there are loads of other cheaper ways to borrow money. They only credit card related site I read is yours frankly!

    Glad you are telling it like it is!

    • Joel says:

      Yes, I think you are right to some degree that readers can sometimes look up to their favorite personal finance blogger. Maybe “suck up” isn’t the best word to use but I think that pandering describes the relationship of some personal finance bloggers and especially a lot of personal finance writers as they will do anything to gain more readership and so they hesitate to tell people like it is for risk of offending them and losing a reader.

  3. Nice post Joel. Right on the money.

    Once people accept this responsibility, hopefully they can move on and work on correcting the problem.

    Sadly, too many sit around whining and complaining about those nameless, faceless companies.

    There is so much great information on the internet out there on earning extra income and improving yourself, there really is no excuse to be stuck.

    • Joel says:

      Thanks Leo. I agree with you wholeheartedly that often the only time real change can happen on a personal and lasting level is when someone first owns up to their own actions instead of playing the blame game. Thanks for the comment!

  4. I agree, and don’t forget thepast government’s part in this! They encouraged this level of irresponsible behaviour too. But in the end, the fault lies with the consumer. After all, the banks nor the government forced us to apply for that credit card and to use it to an extreme.

    • Joel says:

      Yes, I would submit that even if someone has the government, the banks, their mom, their dad, their uncle, and their neighbor encouraging them to do something irresponsible that if the person actually goes through with the irresponsible action then the fault still lies the individual and not anyone of the outside forces. It’s easy for anyone to find some kind of encouragement for any possible course of action but just because someone else encourages one to do something does not mean that the individual is required to follow along like a sheep. Thanks for the comment!

  5. Sandy L says:

    I have mixed feelings here..okay, for me, I totally agree. Any financial dumb move I make is 100% my fault and that holds true for most of my friends too.

    But what about the least fortunate? People with low IQs, learning disabilities, the uneducated. Do you still feel that all responsibility should lie on their own ability to decide how much money is ok to borrow?

    • Joel says:

      That’s a good question. I think a lot of it probably depends on each person’s individual situation. Technically speaking if a person is over the age of 18 and legally able to enter into a contract then they are responsible for any of the choices they make when it comes to signing a contract or entering into some kind of agreement. That being said, I am sure there are circumstances similar to what you have mentioned where I think the responsibility would lie at least in part on their caregivers to watch out for them and make sure that they don’t get themselves into something that they don’t understand. What do you think?

  6. BeyondWeird says:

    The concept of “Personal Accounability” for one’s actions is far less palatable than that of Big-Bad Company made it toooo easy for me to get credit an put myself in hock up to my eyeballs! Yeah, its NOT someone else’s fault.

    Where I look as situations very differently is when someone is deeply in CC debt due to medical bills and/or protracted job loss. We have systemic problems in this country at the root of this debt origin.

    Overall, its the instant gratification, me-me, direction contemporary culture has taken which contributes greatly to the tendency to believe its someone else’s fault for one’s irresponsible behavior. Also, there is not the stigma associated with financial irresponsibility and bankruptcy that there used to be. The hushed whispers & sideways glances, once reserved for those who committed such financial folly, are now relegated to bygone eras.

    Interestingly, the increasing rate of bankruptcy seems to trend with decline of corporate citizenship and “loyalty” to the employee, community, and the country…. as if the scandalous irresponsibility shown by corporations has set the example — “Take what you can get while the gettin’s good.”
    I doubt the example set by the Charles Keating’s (S&L scandal), Enron’s, Bernie Maddoff’s, et al, has had anything but a long-term negative impact on committment to personal financial integrity and sense of responsibility!

    Yet, in the end, that is indeed what it comes down to. Even kids clearly understand you can’t buy more than you can pay for. “All gone” IS a concept they DO understand. Very few of those burried in credit card debt are there as a result of compromised cognative ability, but rather the stubborn refusal to Just Say No when it came to spending and buying.

    • Joel says:

      Yup, it is very easy to just say that some big faceless non personal company is the one that “made” someone go into debt rather than taking a good hard look at the choices that were made by the individual.

      I would agree in some part with you that yes there are certainly systemic problems in these uncertain times that could make someone more prone to overextend themselves but in to be brutally honest and without trying to sound too insensitive no matter what the circumstances are we all still have to make the decision to spend more than we earn and go into debt. No one forces us to swipe the credit card or take out the home equity loan.

      Wouldn’t you agree that regardless of unfortunate or fortunate circumstances it is still ultimately the responsibility of the individual to either get out of debt or stay out of debt?

  7. BeyondWeird says:

    Agreed, Joel! Even in the case of unfortunate circumstances individual responsibility prevails. Assuming one has the ability to work, absent medical situations, getting out & staying out of debt comes down to individual choice.

    Not so sure there is as much ‘choice’ in the case of necessary medical treatment. But that is a far different case, in most cases!

    • Joel says:

      True, true although I think that in the case of medical treatment that the issue is not so much as to how one reacts to the medical treatment but in how one prepares ahead of time long in advance for any potential large medical bills (comprehensive major medical health insurance, emergency savings, health savings account, etc.) wouldn’t you agree?

  8. Beyond Weird says:

    Unfortunately too many people wind up in a crisis situation where one’s own medical or a child’s medical emergency, is compounded by job loss, and necessary treatments run up exhorbitant bills and skyrocketing expenses.

    Its not unusual, I understand, for some employers to terminate an employee who is diagnosed with a serious medical condition, or whose child is. This is part of the utter folly of having one’s medical insurance coverage contingent on who one’s employer happens to be.

    So get cancer, or have a preemie baby,heart disease, hit by a dump-truck, and despite the best laid plans, comprehensive insurance, etc., it can all vanish overnite. This is compounded by the the sharply higher rate of divorce in the case of parents of children with serious medical conditions, and finances can quickly spiral out of control. Its really not a case of not planning for routine expenses & deductables, but those far more serious situations.

    Responsible, careful planning is a great hedge against such situations, but not bullet-proof, particularly in this economy. These are the types of catastrophes originally indended to be resolved (appropriately) through bankruptcy protection.

    For some time I purchased additional disability coverage for myself, as the coverage I had in place through my employer was deemed somewhat inadequate, based on my family’s specific situation. Wow, did my questioning the level of coverage & weekly payment amounts ever raise suspicions at first, until I was able to explain the basis for my questions. Gosh, I would have thought EVERYONE would want to ensure they had adequate coverage! LOL, there….

    • Joel says:

      As long as someone does their research and chooses a trustworthy and reputable insurance company like United Healthcare, Humana, Blue Cross & Blue Shield, etc. to purchase a full major medical health insurance plan then even in the case of cancer or other very expensive medical issues then their maximum out of pocket costs are usually limited to under $10,000 a year as opposed to the hundreds of thousands of dollars in medical bills that can be wracked up without insurance.

      As for employers dropping someone from their coverage or other things happening outside of one’s control the Federal HIPAA laws are in place in all 50 states to protect people who lose health insurance coverage through no fault of their own by forcing insurance companies to accept people onto their special HIPAA plans regardless of pre-existing conditions and they have to cover everything. Sadly, most people (and even agents) are totally clueless about the HIPAA laws and the protections they offer.

      Very true though that careful planning can only go so far because anything can happen. As far as health insurance goes though there are definitely things that one can do to guaranteed that ones exposure is limited to a very manageable out of pocket cost no matter what happens from a medical standpoint though.

  9. Beyond Weird says:

    HIPAA is great, but most people don’t “choose” their insurance company with this country’s peculiar employer based plans. Some years ago I discovered the lifetime max on a policy through one employer was $100,000. Uhhh… that won’t go very far with a major situation. (Glad my son wasn’t born prematurely then) And since we had an employer plan, I couldn’t find a catastrophic that would cover from 100k up. Glad I read the policy & we are all healthy.

    The other issue is nursing home care costs if someone becomes disabled…. stroke, car accident, etc. There is much that can be done, but I personally look at medical situations very differently. HIPAA coverate only lasts for 18 mo. or so, I believe, and costs in excess of $1,000 per month in many cases for family — unaffordable for many unemployed families.

    Yes, its about prudently limiting one’s exposure. It is fairly simple to greatly reduce the risks, but guaranteeing one’s exposure is limited to manageable costs? Not a chance! Life can be too unpredictable…

    …and the list of causes in extreme situations is limitless. But these ARE the exceptions, & the reason why laws include bankruptcy protections for what should be the extreme, rather than the irresponsible situations.

    • Joel says:

      I think that you are confusing HIPAA with COBRA. HIPAA can last essentially forever (until the person turns 65 and becomes eligible for Medicare) while COBRA usually lasts 18 months (and then when COBRA expires if someone is unable to get regular coverage then they are eligible for HIPAA when certain requirements are met).

      As far as your concerns with an employer based health insurance system I am with you on that front. I personally have an individual health insurance plan with United Healthcare that I bought on my own and I am very glad that I have it. I would hate to have to only take the plan an employer was offering. One option is for someone to just purchase their own individual health plan on their own and not take their employer provided plan if their employer provided plan is not a comprehensive plan (especially since individual plans are so much cheaper than group plans although if the employer is paying all of the cost of the employer plan then the downside is that you miss out on that perk of course).

      I would still submit that if someone really knows what they are doing then they can guarantee or at least come close to guaranteeing that their exposure is limited to manageable costs (only in this area of health care costs and not in all areas of life of course). The unfortunate thing is that many people simply are not educated and don’t care enough to educate themselves AHEAD of time on the various safeguards that they have like HIPAA, COBRA, etc. that by the time they need it it is too late because they did not prepare ahead of time.

  10. BeyondWeird says:

    You are correct in that I did mix COBRA & HIPAA up.

    Good luck getting HIPAA, btw… this quote is from a HIPAA discussion:

    “Though this is right, there is no easy way to get this coverage. Insurance carriers for one do not want you on a policy through HIPAA because that means you most likely have some kind of pre-existing conditions. If you didn’t, you could have just gone through medical underwriting on any carrier. Insurance, by definition, is the avoidance of a unknown catastrophic loss. A carrier knows there going to suffer a loss if you have a condition, and they don’t want that if they can avoid it.
    A Carrier will deploy many different techniques to try and get you to not take a HIPAA Plan. Unless you know exactly the right forms to fill out and how to fill those forms out correctly, you will still get denied, though the law is on your side.
    “The law has nothing to do with right or wrong, fair or unfair. The law is about which side can afford to make the other party do that it wishes.” Carriers have loopholes, and only by experience can you MAKE a carrier take you, and even then its not easy, but it is possible.
    P.S. There is only a 63 day window that you can get a HIPAA Guaranteed Plan, and even one hour over and you can be disqualified if the carrier chooses.

    Step carefully through the minefield…. and whatever you do, DONT have an medical condition which impairs your cognative function, or need medication or chemo, or some other treatment that would result in possibly not completing the extensive paperwork perfectly and on time….

    BTW, the monthly cost for coverage? At my age, with spousal coverage, and one child: $1,800 to 2,200 per month…..

    Its the rare person who has been ill & out of work for 18mo + , and has paid COBRA for that time at about $1,000 per month, that can afford costs such as this for coverage and medical care, too.

    I wonder if I could put my HIPAA insurance premium on my Credit Card….?

    • Joel says:

      Yup, you are exactly right in that it can be difficult to get a HIPAA plan if one does not know what they are doing (or work with an agent that knows what they are doing). Most agents have no clue how the HIPAA laws even work (even though most health insurance applications have a question about HIPAA eligibility).

      The 63 day window is just one of the 6 requirements that must be met by law in order to be eligible for a HIPAA plan. The 63 day rule actually makes a lot of sense because the purpose of the HIPAA laws is essentially to protect people who through no fault of their own have lost their health insurance even when they have done the responsible thing and tried to keep continuous coverage. In other words, people that go without health insurance coverage for 63 days are acting irresponsibly and therefore the HIPAA laws will not (and should not) step into to protect them.

      You are right in that HIPAA premiums are very expensive as they are right on par with group health insurance premiums like COBRA (the whole premium not just the employee paid premium). This is because HIPAA plans and group plans must by law accept everyone on the plan that applies regardless of health conditions and HIPAA goes a step further and even requires that all pre-existing conditions be covered right away. Contrast this to a regular individual health plan and HIPAA is often 2-3 times more expensive because with an individual health plan one must pass through medical underwriting to get approved for the plan.

      Moral of the story is to buy adequate health insurance before one needs it and always keep coverage in force and then if something happens outside of your control that causes you to not be able to keep your health insurance then the HIPAA laws will step in as a plan of last resort (essentially already existing true universal healthcare but most people just want something free and easy without bothering to do their own research or actually pay high premiums for high quality health care).

  11. The plan had its flaws, which the government has addressed by devoting $250 billion of the $700 billion rescue package to direct equity investment in banks, rather than purchases of debt under the Troubled Asset Repurchase Program (TARP). But the plan was never intended to bail out feckless investment bankers. It has not done that, and will not have that effect. If it bails out anything, it will bail out a profoundly compromised credit market and a financial system in which every bank, savings and loan, and money-market fund must operate.

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