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As the mortgage crisis has led to a deluge of foreclosures, the mushrooming credit card crisis is soon to deliver the sound of the second shoe dropping. The US Treasury is hoping to educate consumers with its online game named the Bad Credit Hotel. Owning a Bad Credit Hotel Easy credit has made it acceptable to check into the bad credit hotel. After all, mortgages could be had on a signature, numbers were fudged across the board and with a wink-wink nudge-nudge attitude, lenders underwrote home loans for borrowers who simply could not afford the amount of house they were buying. As the government (Mr. and Mrs. Taxpayer) comes to the rescue and helps distressed home owners to keep their homes in spite of being unable to make the payments, another crisis brews. Investing in a Bad Credit Hotel The stock market crash of 2008 has shown that those in charge of protecting the American economy were too buy seeing to their own fiscal health to have time to worry about everyone else's, too. This left tens of thousands with retirement and college savings accounts that virtually overnight lost ¼ to ½ of their worth. Once again Mr. & Mrs. Taxpayer were called to the table as the government issued a $700 billion bailout for distressed companies. Checking into a Bad Credit Hotel Today the New York Times reports on an online game devised by the US Treasury that is supposed to help consumers learn about the proper use of credit and how to maintain a good credit rating. Known as the Bad Credit Hotel, the property is a bit of a mix of a Gotham meets Psycho kind of venue. At issue is the mushrooming credit card debt that is occurring concurrently with a bank initiative to roll back the issuing of easy credit cards and also the hiking of interest rates on even the good customers. The New York Times states that in the first six months alone, credit card issuing banks had to write off about $21 billion in credit card debt that was no longer getting paid off. There is talk that the bad debts still expected to hit the credit card companies in the next 18 months could add another $55 billion to that. Capital One has taken to reducing consumer credit lines while credit card applicants already carrying debts are no longer seen as good credit risks. Bad Credit Hotel or Hotel California? The immortal Eagles classic "Hotel California" speaks of a hotel that is much like the L.A. lifestyle of the mid 1970s: excess and consequences nipping at the heels of despair. Today, consumers who have bailed out homeowners and Wall Street are left holding the bag, and while many live from paycheck to paycheck, the little security blanket that is their credit card is now turning on them - in more ways than one. When the Eagles wrote Hotel California and more or less depicted American society as one where excess is leading to nightmarish consequences -- who knew they were prophets? Sources: http://www.nytimes.com/2008/10/29/business/29credit.html?em; http://www.controlyourcredit.gov; http://www.rollingstone.com/news/story/6595894/hotel_california |
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