I was on a radio show this morning with two other industry experts. The conversation pretty quickly turned to bankruptcy, foreclosure, horrible credit card rates, predatory lenders, debt and the general idea that the financial services industry really wants to see consumers fail. It was pretty depressing.
I’m can be a big pessimist but honestly I don’t feel that things aren’t quite that bad out there. Yes, there are major problems with the mortgage world, debt levels are high, and the government has been siding with the industry for the past decade or so. But there are also some really good things happening when it comes to personal finance. It’s time for another "count-our-blessings" session:
- Online companies are empowering consumers. Free services like Mint.com make it easy for anyone to manage their money like a pro. Sites like Credit.com
and CardRatings.com let you compare credit card offers in detail. ING
Direct gives you a really high savings rate. Prosper.com facilitates
peer-to-peer lending. Fool.com, FannieMae.com, FTC.org, etc. all have
huge libraries of free educational tools you can use to learn how the
systems work. - You can borrow money inexpensively. Credit cards, even high rate cards, are an affordable way to borrow money on a short term basis. Borrowing $1,000 for a month on a 13% APR card would cost you a measly $10 bucks, you can’t even get lunch for that anymore. And thanks to the fed rate, you can still find historically low rates on auto and home loans.
- Banks are scrambling to be the "good guy." Some of the giant banks have made it clear that they don’t care. But this leaves an opportunity for smaller banks to compete to be different. Washington Mutual has been pursuing this and Wachovia is solidly in place as a consumer friendly bank.
- Regulations are coming. Finally! Hopefully, the new credit card rules are going to be just the tip of the iceberg. The mortgage fall out has created an atmosphere where regulators are finally returning that setting rules is good for consumers and the industry.
- The financial service industry does not want you to fail. Honestly. Consumers are much more profitable to banks and lenders when they are paying their bills and managing their money. This is the reason why it is so hard for someone with a low credit score or a low income to get approved for a loan or credit card. Banks don’t want you to foreclose, file for bankruptcy or go into collections, it’s as simple as they lose money when this happens.
- Free annual credit reports. That this actually passed is a miracle in itself. Consumers can get a free credit report from each of the credit bureaus every 12 months through www.annualcreditreport.com.
- Consumers are smarter about credit than ever before. When I started in this industry 7 years ago, you were lucky if you could find someone who had even heard of a credit score. Now, pretty much everyone knows the basics of credit reporting and scoring. People are blogging about personal finance and talking about credit, it’s amazing!
What are you thankful for in the middle of this credit crunch?
Emily Davidson – A former TransUnion insider and a member of Credit.com’s expert team. Emily writes about credit reports, credit cards, loans and personal finance as the CreditBloggers.com editor.
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If you want to go run around screaming the sky is falling, nobody is stopping you. I think people are coming to their senses that they don’t need credit to survive. I’m doing just fine if not better even though everything is so ‘bad’ out there.
Frugal is back in! People are realizing that wasteful spending (think plastic water bottles for one) is bad for the environment as well as our wallets.
And as you point out, there are still many opportunities we haven’t tapped yet. The founder of the Internet recently said it is still in its infancy, and oil magnate T Boone Pickens is investing $10 billion in a wind farm.