Chase What Matters - How to Stay in Debt for Life

Posted on April 3, 2008
Filed Under Credit Cards, Personal Finances |

Does anyone think credit card companies are their friend because they give you the “privilege” of having one of their cards. The reality is just the opposite for millions of folks tied to those never ending monthly payments.

Check out this commercial that tells us to “chase what matters”. The title just makes you feel all warm and fuzzy doesn’t it? Already we can envision the “important things in life”, and are reminded how “sacrifice is always worthwhile for the long-term good” not to mention the “things that really matter”.

Well surprise, surprise, surprise. Turns out that “what matters” is that super widescreen HDTV, deluxe surround-sound, home theater system.

And then there’s Chase to the rescue, by reminding this guy, who’s already salivating all over himself, that he can indeed “have it all now”. All he has to do to see if there is the least little bit of room on that already maxed out card, is just “text Chase”, and poof, he’ll know his balance in an instant.

Wow, that’s a message we need more of. Let’s hear it for instant self-gratification. Just a couple more doses and this poor schmuck will be buried in debt up to his eyeballs. C’mon put your hands together for Chase, thank you very much.

When you take a look at this commercial, it’s fairly easy to see what the lender really thinks about you. In case it’s not clear, you are simply a cash-flow. The only thing they love about you is your steady monthly payment. And why not, they’re pretty much minting money, especially at the exorbitant rates being charged these days.

But wait they say, “we have to charge these higher rates to allow for our expected defaults”. No doubt that’s a partially true statement, but the real reason the default rates, and thus the interest rates, keep going up is largely due to people getting deeper in debt to the point they can’t keep up.

Combine that with extending credit to people who never should’ve had it in the first place, and you can be sure the rates will continue upward with ever-dizzying speed.

Can anyone say subprime mortgage disaster? Same song, different verse.

Without even broaching the implications that what really “matters in life” is having cool electronics, this commercial violates so many principles of fiscal good sense it’s hard to list them all.

For one thing, it infers carrying a balance is normal and okay. Not even – go read this post on getting a super return on your money to see why credit card debt tops the list of foolishness. Next it shows us a guy living beyond his means with no clue about how much debt he’s already carrying, trying to figure a way to dig the hole even deeper.

The icing on the cake is the voice telling us to “decide what to spend based on our credit card balance“!

Helloooooooo, forget common sense, does anyone really think this even remotely resembles sound money management?

Have words like “budget” or “cashflow” been completely forgotten? For the millions of people wondering why they’re in debt, the answer is obviously a resounding yes! Why is it so difficult to understand that debt is simply spending that exceeds income, and that past that point we’re living beyond our means. Translation - losing ground.

But isn’t it comforting to know that you can just “text Chase” at any time, day or night, to see if that balance has dropped even a little, so you can push it right back to the max. Yeah, baby!

But hey, Chase is just trying to make a profit and return value for their shareholders – nothing wrong with that. No there’s not, but I’d like to see them act more responsibly and not exasperate the already huge debt problems of millions who can’t figure out why they aren’t getting ahead.

As an aside, here’s a way to actually make some money - stop paying Chase interest and buy their stock. Actually it’s JP Morgan stock since they own Chase. You may have heard of them – the guys who with a little help from the Federal Reserve, gobbled up Bear Sterns at fire-sale prices.

Pretty cool deal since the Fed will back about 30 billion dollars worth of the risk, and all that paper can’t be completely worthless. I’m guessing there’s enough there to make for a tidy profit, especially at a cents on the dollar purchase price for Bear.

And no, nothing said here should in any way be construed as investment advice, but for myself, with most bank stocks including JP’s finding ever lower lows due to the subprime mess, the current price plus the Bear deal make JP look increasingly attractive. Besides they even pay a decent dividend.

On the other hand, the fact that getting rid of credit card debt can nearly double the average return from stocks makes it a strategy that can definitely be taken to the bank – no pun intended.

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1 Comment so far

twosense June 18, 2008 3:46 pm

It’s hard to believe just how deep some folks can dig themselves in. Check out this info on debt relief for more on this.

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Chase What Matters - How to Stay in Debt for Life

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