New Year’s Resolution’s

Soon 2005 will be arrive. In a recent survey published by Quicken 2004, the top six New Year’s resolution issues were given. Doing something about personal finances finished second only to spending more time with loved ones. An old favorite, losing weight, finished third.

Consumer Credit

It is no wonder. Howard Dayton of Crown Ministries recently reported that during 2003, according to the Federal Reserve in January 2004, revolving debt – much of it from credit cards – in America was $735 billion dollars. His analysis indicates that Americans paid $85 billion in interest alone on consumer credit during 2003. According to the American Bankruptcy Institute, American’s use of consumer credit has quadrupled since 1990 until 2003. The group with the worst credit ratings use of credit is increasing even faster, for instance 45% annually during the 1990s.

Bankruptcy Filings Escalate

Once considered shameful and humiliating, bankruptcy is becoming somewhat socially acceptable as more and more Americans seek relief from the grinding agony of being overspent and harassed by creditors, due to financial illiteracy and easy credit. The people most susceptible to the easy credit and marketing campaigns of the credit industry and retailers are also the most profitable group. These people usually pay higher interest and tack on monthly fees that repeat for being over the credit limit and making payments late. Changing values and credit industry forces are combining to cause rapid increases in the number of bankruptcies being filed. According to the American Bankruptcy Institute, in 2003, the number of personal filings exceeded 1.6 million in 2003, which 1 in 18 or 6 per cent of the total population of America. This is an all-time high for Americans.

College Students Targeted

The use of credit cards has proliferated among college students so that their burden of debt far exceeds that of any previous generation of students. Consumer Reports recently posted information that the average college student leaves school with $17,500 in student loans, $3,500 in credit card debt and a car loan. Anecdotal evidence indicates that while parental approval used to be required, card issuers have found that if a student uses a credit card someone will pay the bill, therefore the cards are issued routinely with nothing but a student signature on the application.

Financial Literacy Education and Equipping

There are a few organizations, both non-profit and for profit, working to prepare the American public to deal with this crisis of cascading credit marketing and consumer overspending. Founded in 2002, Biblical Principles, Inc, a Georgia non-profit funded by donation offers seminars, workshops, counseling and literature at no charge to educate and equip the public. Contact Biblical Principles at 1-866-362-4253. Also see www.biblicalpriinciplesinc.org

Bill Prince, Executive Director, Biblical Principles, Inc. October 21, 2004

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