Is this really surprising, considering we live in society that operates on the morals of "caveat emptor".

Read your credit card agreement

If you are late 3 times in a 6 month period, they can up your interest rate to 40%..

I know, when my daughter got sick, it happened to me.

I am re-reading "Grapes of Wrath."

The parallels are quite disturbing.

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I'm going to do as Elizabeth Warren Suggests.

I'm also going to suggest a fourth thing to do:  Send  both Senators from MBNA a little e-mail telling them how much you appreciate what they've done for Middle Class America.  This goes especially for Senator Biden, for whom I'd vote for President when a notedly hot place freezes over. 

William Greider called Biden and his ilk (including Joseph Lieberman) "Enron Democrats" back in 2002.  He said

 It is Senator Joe Biden of Delaware, however, who plays tough-cop enforcer for the industry (a role also shared by Senator Robert Torricelli). Delaware is home to six major credit-card operations, led by MBNA America, Chase and Bank of America. Altogether, they process indebtedness of $230 billion. Biden is their guy.

Thanks for the point to the Boston Globe.  It is one of the handful of newspapers which rises to do noteworthy investigative reporting from time to time.

aMike

The "lateness" isn't the only issue. My practice is to put every possible expense on my credit card and to pay off the balance every month; I get money back with the card I have, and that is why I do it. I am careful to NEVER leave a balance or to pay late.

I recently put 5 airline tickets, some furniture, and regular monthly expenses on my account. The charges were close to $6,000 for that month (I had planned for it, and paid it off) BUT!!!!

Guess what the credit card company said my minimum payment was? $20!!!!

They are setting traps for those who are not sophisticated enough to realize the hole they dig themselves once they pay the minimum for even ONE month! After that, the interest just adds up, and it is a profoundly difficult financial debt to overcome.

My point is that the credit card companies are helping to create this problem, and more realistic minimum payments (say 25%) could make consumers/debtors aware of the pathetic downward spiral of spending more than they make and can afford.

...A quick example: I have preached to my children the above message for years. My daughter has a "Victoria's Secret" credit card. I recently noticed that she had a bill of $255, and that she had paid them $10 the previous month. I showed her that of the $10 she had paid, $5 of it went toward interest, and so she had only reduced her debt by $5. She said, "I thought they only charged you interest if you paid late."

This is a smart, college junior (majoring in economics, by the way!). I could hardly believe my ears!

The truth is we all pay a price when people get indebted to the point that they can't pay it back, and although everyone is responsible for his own debts, the credit companies also unscrupulously abet this situation.

Other than for long-term, equity-building expenses, purchasing what you cannot afford TODAY -- NOW -- is wrong. We all need to acknowledge this fact, and also to live with it.

Jan Knaus

But Valdron here are the Democrats from the Senate that joined the Republicans:

Daniel Akaka (Hawaii)
Max Baucus (Montana)
Evan Bayh (Indiana)
Joe Biden (Delaware) senator@biden.senate.gov
Jeff Bingaman (New Mexico)
John Breaux (Louisiana)
Robert Byrd (West Virginia)
Maria Cantwell (Washington)
Jean Carnahan (Missouri)
Thomas Carper (Delaware)
Max Cleland (Georgia)
Hillary Clinton (New York)
Kent Conrad (North Dakota)
Tom Daschle (Sorth Dakota)
Byron Dorgan (North Dakota)
John Edwards (North Carolina)
Dianne Feinstein (California)
Bob Graham (Florida)
Fritz Hollings (South Carolina)
Daniel Inouye (Hawaii)
Tim Johnson (South Dakota)
Herb Kohl (Wisconsin)
Mary Landrieu (Louisiana)
Patrick Leahy (Vermont)
Carl Levin (Michigan)
Joe Lieberman (Connecticut)
Blanche Lincoln (Arkansas)
Barbara Mikulski (Maryland)
Zell Miller (Georgia)
Patty Murray (Washington)
Ben Nelson (Nebraska)
Harry Reid (Nevada)
Chuck Schumer (New York)
Debbie Stabenow (Michigan)
Robert Torricelli (New Jersey)
Ron Wyden (Oregon)

36 of the 50 Democratic Senators at that time voted FOR the bankruptcy reform bill. In all fairness, if you live in a glass house should you be throwing stones?

Would I be overly cynical to suggest the Clinton was the age of caveat emptor. With Bush/Cheney we're squarely into the era of fuck your brother and shoot your neighbor if you think it will make you a dime.

"Liberal" became a bad word because the Great Society and liberal policies on crimeled to an explosion in the criminal underclass, not because of mere propagnda campaign.

If liberals stop (1) hating whites, (2) trying to disarm law-abiding citizens and (3) stay tough on violent criminals, they could probably get a lot more of the progressive agenda passed on issues such as debt collection.

Of course, "conservative" or at least "neoconservative" is rapidly becoming a dirty word because of Fearless Leader's stupid was in Iraq, so the liberals are getting their revenge.

"You say I'm a dreamer.  We're two of a kind.  Looking for some perfect world that we both know that we'll never find." - Thompson Twins, "Hold Me Now"

Liberal became a bad word for many reasons, including the Voting Rights Act. Was that an example of "liberals hating whites"?

Nixon and Ford were President during the rise in crime in the 1970s. It's certainly fair to blame LBJ's economic policies, pursuing the Vietnam War without paying for it, for some of the problems of the 70s.

Crime came down during the Clinton years and is going back up under Bush.

The "liberal blogosphere" has been gung-ho about some candidates who, among other things, do not favor gun control. Hackett for example.

Try to get away from your GOP-induced cliches.

If liberals stop (1) hating whites,

Translation: Opposing lynching, defending civil rights, opposing Jim Crow laws, and not hating blacks enough.

(2) trying to disarm law-abiding citizens and

Translation: Prosecuting drunken rednecks for shooting black people and dragging them behind trucks.

(3) stay tough on violent criminals,

Translation: Put more black people in jail.

Yeah, right. Seen it, heard it, read the codebook. You may not be a racist yourself, but your phrases are straight out of the KKK. I'm not impressed.

Medical bills are over half of all bankruptcies, as has been discussed on here before. I can tell you that both because of the Harvard study and my own practice in bankruptcy law.

I am supporting Dr. David Hunter, the Democrat running for the open 5th Congressional District here in Oklahoma, who is an Ear, Nose and Throat doctor here in OKC. He supports creating some sort of National Health Care system (his idea is to create a Trust like the one that runs the Post Office) and he supports repealing the bankruptcy law if elected to Congress. If any of you can help, his campaign headquarters phone number is 405-297-9807. his website is Dr. Hunter for Congress.

However, there is about a 10-15% market share, if you will, of people who "spend money they don't have, to buy things they don't need, to impress people they don't know." If you include people who are married and live above their means who then get divorced, you might add another 5%. If you include workers who lose their job, who fail to live below their means and fail to plan for contingencies of losing their job by having enough savings, you could add another 5-10%.

Find the Truth. Do Justice.

Elizabeth Warren's my hero because she takes the time to ferret out the little details on how the do-no-work banking/credit industry spends its time maximizing profit by using Americans as voodoo dolls.

Capitalizing on the majority of honorable Americans who believe in paying their debts back, this industry's work is finding new ways to exploit and then abuse that good faith.

What is produced by bankers? Wealth you say? More money to invest, you say?

Not at all. The rule that activates the application of interest to deposited funds does the wealth building. The buying and selling of the many investors does the wealth building. The quality of work of everyday folks who design, build, maintain and protect capital do the wealth building.

And the bankers don't even protect the money. Ex-police officers by and large do that as security for banks, and then, IT guys, armored trucks and companies that build bank buildings with vaults in them. Think about it: banking isn't investment really at all. Banking is a game, no less than casino games, which persuades people to keep their money safe in a particular place so that when the accounts run short and the fees and bouncing checks loom in the coming week, people take out loans or lines of credit to cover themselves.

More later on the "responsibility" question.

Everybody knows the war is over
Everybody knows the good guys lost
Everybody knows the game is fixed
So they roll with their fingers crossed

This is excellent campaign for any opponent when these Senators run for re-election. I suspect it would be very effective, particularly with the middle class who are drowning in credit card debt.

". Very very few of those families who have been living a lifestyle above their means are spending the money frivoulously. Mostly, they're living that way so their kids can get ahead. College costs and admissions expectations are ever-rising

This is somewhat true, it seems a real issue is the mortgage. Too much house with too little income. There was an article that talked about why young couples are winding up in bankruptcy and the biggest factor was kids. Couples with kids, generally over extended themselves on the mortgage to live in communities that had good public school system. Because of that the couples tended to be 'house poor' and unable to afford basic living expenses...but their kids were in a good school.

Collection people are aggressive and obnoxious and very difficult to fight. I had to threaten to sue to get them to stop calling me when they had the wrong social security number and a different middle initial yet put a mark against my credit. It took me over a month to get the negative data removed. It was a nightmare.

Yes. This is awful when it happens. One of the new things consumers can do is put a freeze on all their credit, thanks to the identity theft criminals, this is now possible.

No one can open accounts nor solicit you nor can employers or others who wish to perform bkgrd checks, check your credit without calling to ask you.

I hesitate to realize that I also need a new main TV -- what kind of battle will that be to pay for a new one in cash?

I totally understand.

Believe it or not cash transactions, raise eyebrows as though you are a criminal laundering money.  I decided to use cash for most transactions after watching the Oprah Debt Diet program. I could not believe how folks looked at you so suspiciously, in fact, I did not pick up on it at first. Until one clerk said, hmmmm, hardly anyone uses money if they are a good citizen, as she counted the money for a 300 dollar transaction.  I was like WTF?..then I replied "having a problem counting over ten dollars..good citizens learn how to count to a hundred by first grade..guess that register only tells you the amount of change to give, huh...not how to count the amount you receive? Maybe you need to call the manager to come and count it for you."

The nerve of these people.

It is totally ridiculous how people infer you are  not a citizen in 'good standing' unless you use credit cards for transactions. I refuse to succumb to the debt 'worthy' madness.

Imagine allowing such skepticism to deter you from using cash and  force you to use a credit card  (to save face, no less) ..so   now what I do is use American Express travelers checks. 

It's crazy but folks think you must be affluent and 'well-traveled' when you use those...the most common comment now is 'are these left over from a trip...where did you go?

I can't tell you how many 'new places' I have traveled to recently.

If you are late 3 times in a 6 month period, they can up your interest rate to 40%..

Wow. That's horrible!!...there should be some way that consumers could go to court and stop that type of usury. It should be friggin illegal!

Yes it is!

Maybe the Democratic Party could take up the case for reforming Usury Laws.

 "But my car loan is higher than that"; "But I'm paying way more than that on my credit cards." That's right! Banks have separate rules. In fact, due to high inflation, in 1980, the federal government passed a special law which allowed national banks (the ones that have the word "national" or the term "N.A." in their name, and savings banks that are federally chartered) to ignore state usury limits and pegged the rate of interest at a certain number of points above the federal reserve discount rate. In addition, specially chartered organizations like small loan companies and installment plan sellers (like car financing companies) have their own rules.

How much does anyone want to bet that the national banks, small loan companies, and installment plan sellers were major contributors to the politicians who agreed to relax Usury Law?  So let's get out there and smite the usurers hip and thigh.

It is interesting to me that every major religion condemns usury.  Would that the religious right were as interested in condemning this kind of public economic behavior as it is in condemning private behavior between consenting adults.  Visser and McIntosh have a very informative History of Usury Prohibition.  The bold face links to it. 

aMike

Third, post a blog here about what you thought was the most outrageous act

Virtually all the cases are horrendous. However, if I had to select one as the most outrageous I would pick the one where the man was jailed for 28days....nothing is more precious than your freedom. It is unbelievable how that sister called to pay the debt and was told not to bother. Behavior from a court clerk such as that should be a prosecutable criminal offense in and of itself.

All those cars being seized is awful, but folks can get another auto...you cannot get back freedom that is taken away...there is no repayment..it is like murder...no one can bring the person back..so justice is forever denied.

These are awful awful stories...the callousness of the court systems is simply reprehensible. I would like to know if these court magistrates are civil servants paid by our tax dollars. If so, then civic actions should be taken against them for denying citizens their legal rights.

I would like for future coverage to focus on how actions can be taken against the court personnell for their failure to be accountable to the public. I want their jobs taken and pensions denied for the inhumane treatment they have subjected people to.  Let their be no compassion for these clerks and magistrates who have been so inhumane to others.

I thought the reference was to moralizing about divorce

hmmm...could be...I missed that angle

Not if you lose your job due to being late/absent, no. This isn't the 1940s: the vast majority of jobs are _not_ within walking distance of public transportation anymore

I totally agree. And think those actions were terrible especially in that they seem to prey on single females with kids.. As well as it seemed that a good number of those names sounded like ethnic minorities.  It is all quite terrible.  Nevertheless, an auto is property and you can replace it..and you also can find new employment....but being placed in jail is simply not redeemable, in terms of your freedom being taken..which would also probably result in losing a job as well.

Please do not think I am unsympathetic to assets being siezed cause I am not,. I certainly think that was outrageous as well. I was only trying to describe reasons for selecting one as the most outrageous  as Liz Warren asked. 

 As one poster has already said, he would choose all of them rather than pick any one...and I agree with that as well.

So, they were living within their means, but the catastrophic event of divorce sinks their boat is what you are saying? Because, you know, everyone who gets married is actually planning on getting divorced.

Ugh. You completely missed the point. I am speaking from experience as an attorney in private practice who does about 70% bankruptcy and 20% family law. I am referring to a certain number of people who make $24,000/year who then, literally, go out an buy a Hummer. The justify it by saying that they want a "safe car for their kids." No they don't. They actually want a car that will impress their neighbors. Hondas are safe cars. They may not impress the neigbors, but they are safe. They may not be roomy on a long trip, but they will get you there.

I am also talking about people who make $40,000 household income who buy a 4000 sq. ft. house. They don't need a 4000 sf house. They could easily make do with a 2000 sf house, but they want to impress people.

Give me a break. Most Americans are living paycheque to paycheque and that's all. Here's a statistic for you: Real wages have dropped 21% in the last 25 years. That's right, Americans are falling behind, not keeping up. In order to preserve a declining standard of living, most American families are doing two things: They're taking second or even third jobs, with both spouses working. And they're going into debt. Basically, they're all working their asses off to tread water.

You know, I am not even disputing that workers are underpaid, that wages have not kept up with inflation and that companies are culpable in all this. The finance companies, banks and other lending institutions are guilty of excessive usury, in my opinion. However, at the same time, given the fact that we cannot change this under the present political climate, we need to sound the warning bells to working class people to not buy things on credit at excessive interest rates. There are certain rules of personal finance that are, in fact, being ignored.

Then eventually, you hit a speed bump. The price of gas goes way up, or there's a medical emergency, or there's a divorce or someone loses a job and suddenly, there's nothing but debt.

I know that. But it is just these contigencies that need to be planned for. It is simple personal finance. Even as we are pushing for corporate responsibility for the welfare of workers, you cannot escape the obligation of personal responsibility to manage your own finances.

I blame the lending institutions for overcharging interest given the risks entailed (that is why we need national usury laws) because they understand the math. They know how the "Rule of 72" works. Very few workers do. But workers can understand the need to save money. As a general rule, a person should have at least 6 months of savings for living expenses at all times. American's savings are now negative. Part of this is due to the Baby Boomers starting to retire and part of it is due to overconsumption -- but it is still bad.

Find the Truth. Do Justice.

But here's the thing. Sometimes you don't have the luxury of planning for contingencies.

You take a family of four, with two parents making minimum wages, a buck doesn't stretch very far. You start on the treadmill, debt cushions an emergency a crisis or a bit of desired luxury, and you're on the treadmill.

Sure, there's a lot of self-inflicted harm out there, and I'm not disputing that you've seen it first hand. But I am saying that in the real world, these 'personal responsibility' sorts of solutions are all very well and fine, but it doesn't solve the problem if the entire system is rigged against you.

This ain't no how, no way a level playing field.

No problem. I tend to overreact. I remember way back when, before all this happened, that I has an account with First U.S.A. Credit, and they sent me an addendum stating that "if you're laate 3 times in a six month period...etc" First time I'd ever seen THAT, must have been 15 years ago. Well, I cancelled that account. I got a call about a month later from some poor customer service person aking why I'd cancelled. I said that I thought that "clause" was immoral and I wanted nothing to do with them.

Now all the banks do that. And worse.

I apologize if I was rude. I like your posts, and I think you're on the side of the Angels.

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The other dirty trick they pull, is even worse. Suppose your limit was $20,000, and you had charged up $9,000. Every payment you make, say $500.00, they lower your limit to $8,500.00, so that after the interest is charged, youare "over your limit" and subject to a $40 additional charge, then you pay $300.00 and they lower your limit again to a few cents over what you owe.

Yes. I had this happen with Providian. My balance was 4K with a 5K limit. I decided to pay off the card..and paid them 2K for the first payment. They immediately lowered the limit to 3K and now since there was interest charged, I was over the limit and they charged me an over the limit fee. I went to my credit union and took out a loan to pay them off, I was soooooo pissed. I ranted and raved on the phone to get those 'over the limit fees' taken off. It just incenses me that they charge interest then charge fees to increase the interest they earn.

I learned on Oprah's Debt Diet show that the last thing you do is threaten to close the account. They hate that and will do just what you and I experienced...lower the limit...to make more money.

I sooo wish I could sue these companies and make then pay me!!

If nothing else I wish I was wealthy enough to tie them up in court with legal motions to the point that they would make a big settlement out of court just to end the legal hassles.

But then if I were wealthy I wouldn't have a use for their stinky ol cards.

I hate plastic.  Instant debt.

I work exclusively with low-income clients, and when I talk to my more affluent family members about how they get by, it's like I'm telling tales about a remote jungle tribe. It's really hard for some people to understand that other people just don't have enough money.

It's really hard for some people to understand that other people just don't have enough money.

Yes, Oprah did a show on this also, a couple decided to live on minimum wage for a month to see what it was like. It was really scary how difficult that was for just the two adults not having enough to rent a place and buy groceries, then they threw a couple of kids in the mix...and boy did it get even that much tougher...just going to the movies was like an entire days' pay.  The guy hurt his hand at work and that resulted in this huge ER visit bill and time off from work because he refused to go initially to see about the injury so of course, the continued use of the wrist just made the injury worse and prolonged healing.

Which started the downward spiral to homelessness for this couple.

Also, since both of the people had to work 2 jobs to make ends meet they had very little time together as a couple or family time which showed how there was even more tension and aggravation which creates domestic turmoil and the families breaking up. The wife was mad when the husband splurged to buy stuff for the kids since she had saved money by walking to work and  not catching the bus. She felt that was a poor use of their money for something frivolous like candy and popcorn for the kids. While the dad, it was clear, was just happy to be able to do something to make his kids happy, knowing how much they all struggled just to eek out their daily existence. I thought this was a very interesting dynamic.

Living above one's means takes on a new meaning when it is something as simple as buying refreshments for your kids at the concession stand in the movies. It was not as though this dad had the ability to buy an X box or even a bike for his kids. Being a dad though he just wanted to see his kids eyes and faces light up with the joy of getting something small they desired. The little joy in his life was to the kids hearts happy. Momma was furious about him 'wasting' that money so whatever joy he derived from seeing his kids smiles was short lived.  That is what I call living in despair.

 Not having enough money to live on causes many more problems than just being hungry or not having shelter or clothes since it puts such a strain on  the relationship dynamics between family members. You can easily see how families wind up breaking apart, even from acts of good intention.

The couple that was portrayed were not actually homeless as they had decided to do this to show others how precarious life is on a minimum wage and they are using it to advocate for a higher minimimum wage in the country

It was really very sad.

Citibank relocated their credit card operations to South Dakota after getting SD to basically repeal the usury laws in that state. The return was the additional banking industry jobs. Court cases followed that allowed the usurious interest rates to be applied to customers even though they resided outside of the state.

Two classics, one pretty well known, the other deserving to be better known are

Nickel and Dimed, by Barbara Ehrenreich

The Working Poor:  Invisible in America , by David K. Shipler

Ehrenreich's is probably the more famous, but I rather like Shipler's book a bit better, perhaps because it doesn't rely on a gimmick to make its points. 

There are a number of websites devoted to issues of class.  

The Working Class Majority is maintained by The Center for Working Class Studies at SUNY Stony Brook

Inequality.org provides a variety of .pdf reports, including one on credit card debt which fits right in with this discussion.

Finally, PBS produced a pretty good documentary, People Like Us on issues of class in the United States.  It's worth looking at, and the accompanying website has some useful and interesting links on class-related issues.

aMike

I used credit cards to pay for part of college. Not a great idea actually. I finished with a bacholars of arts and now hold a masters degree. I knew the credit crunch would catch up, it did. However, there is one step no one has mentioned except partly this previous thread.

DON'T SPEND OUT OF YOUR MEANS PEOPLE!

I got off credit cards two years ago, now when I spend something I know I will not pay $1.99 plus tax, plus interest!

Get it under control. Who the hell would wants to own a Hummer anyway?

You're talking about Morgan Spurlock's FX network series "30 Days." The second season is going on now. It had a Minuteman live with an illegal immigrant family for 30 Days and a NY programmer who lost his job to outsourcing live with a Bangalore middle-class family (who do outsourced jobs there) for 30 Days. It's worth watching. You can see people learn a totally different perspective.

10PM Eastern time on Wednesdays. Repeats at 11PM.

Based on what I've seen happening the past few years, our Bill of Rights and our Constitution is being systematically dismantled.  Laws are being made that allow creditors the ability to contractually avoid the constitutional rights of their borrowers.  At the same time they are lobbying for more laws.

I Think this all started in 1913 with the passing of the Federal Reserve Act.  That law was passed under false pretenses, and since then the banking industry has been successful and chipping away at the law to get what they want.  It is tantamount to conquering a country without firing a single shot.  It is done through the loopholes in the system, and the greed of those in power.  I would not be surprised if this takes us down the path of a fascist government, where people are regularly thrown in jail for not paying debts, while banks generously let people borrow to their hearts content.  They know how it will end up - and they'll simply accumulate power over more people.

It boils down to a single truth:

Prov 22:7
7 The rich rules over the poor,
And the borrower becomes the lender's slave.
NASU

When the rich hoard their wealth, those who live on minimum wage are "assisted" by allowing them to borrow with credit cards, payday loans, and rent-to-own arrangements.  This is touted as helping them, by giving them access to credit.  Then when they can't pay, they become slaves, in a vicious cycle.  That seems to be the norm for our society now.  God have mercy on you if you aren't rich.  If you're middle class, downsize you lifestyle to avoid ALL debt or you will be lulled into this cycle.  Don't tolerate it, or it will catch you when you get sick, lose your job, or your business.  Oh... and you say those living on minimum wage can't even afford basic things for life.  That is a consequence of inflation, which has been fueled by our increased borrowing.  The damage is done, and the trap is set.

If you do get into debt.  You'd be wise to know the law.  Originally, it was intended that American citizens would defend themselves in court.  That is frowned on today.  But try to find an attorney that will defend you if you are in debt.  You'd be lucky to find one who won't defend you against unfair interest charges and late and overlimit fees.  If you don't have money, you don't get justice.  But if you know the law, and how to litigate (understand court procedure), you can fight them off.  A controversial but effective way is to follow the methods of Richard Cornforth to fight off third party collectors.  (that is who you are up against after your debt is written off)  Handling them properly from the very first contact gets them running the other direction because they almost always don't have the proper evidence to show they can collect damages in court, unless of course you follow the shortcut methods of justice most attorneys and judges prefer these days.  That is why you have to know the law.  Short of that - you're out of luck.

Isn't it wise to avoid debt to begin with?  Not just avoid - ban it from your finances. 

Jim Anderson

The Truth About Credit

Let's face it. The Democratic Party wouldn't support the Civil Rights acts of the 60's today. Sure, they'll vote for them because they're institutionalized now. But if these were brand new pieces of legislation? Forget it.

Um, the Democratic party was home to the Dixiecrats in the 60s most of whom defected to the GOP...you have to read LBJ Master of the Senate for a detailed bkgrd of how he was able to get the Civil Rights legislation passed. I do not think President Kennedy could have done so. It is no coincidence that the major pieces of legislation supportive of blacks in this country have been passed by Southerners.  It takes one to know one and especially to know where the bones are buried to get the work done. Robert Byrd typifies what the democrats were like in the Senate during the 60s.

Thou must observe whether thy brother hath present or probable or possible means of repaying thee, if there be none of those, thou must give him according to his necessity, rather then lend him as he requires (requests). If he hath present means of repaying thee, thou art to look at him not as an act of mercy, but by way of commerce, wherein thou art to walk by the rule of justice; but if his means of repaying thee be only probable or possible, then he is an object of thy mercy, thou must lend him, though there be danger of losing it.

 John Winthrop, Governor of Massachusetts Bay, is an excellent example of the principle behind the point I am making. Lending should be an act of Charity.  This principle goes back further than John Winthrop.  It is found in the Old Testament, in the book of Nehemiah.            

Neh 5:1-18 

About this time some of the men and their wives raised a cry of protest against their fellow Jews. 2 They were saying, "We have such large families. We need more money just so we can buy the food we need to survive." 3 Others said, "We have mortgaged our fields, vineyards, and homes to get food during the famine." 4 And others said, "We have already borrowed to the limit on our fields and vineyards to pay our taxes. 5 We belong to the same family, and our children are just like theirs. Yet we must sell our children into slavery just to get enough money to live. We have already sold some of our daughters, and we are helpless to do anything about it, for our fields and vineyards are already mortgaged to others."  6 When I heard their complaints, I was very angry. 7 After thinking about the situation, I spoke out against these nobles and officials. I told them, "You are oppressing your own relatives by charging them interest when they borrow money!" Then I called a public meeting to deal with the problem.  8 At the meeting I said to them, "The rest of us are doing all we can to redeem our Jewish relatives who have had to sell themselves to pagan foreigners, but you are selling them back into slavery again. How often must we redeem them?" And they had nothing to say in their defense.  9 Then I pressed further, "What you are doing is not right! Should you not walk in the fear of our God in order to avoid being mocked by enemy nations? 10 I myself, as well as my brothers and my workers, have been lending the people money and grain, but now let us stop this business of loans. 11 You must restore their fields, vineyards, olive groves, and homes to them this very day. Repay the interest you charged on their money, grain, wine, and olive oil."  12 Then they replied, "We will give back everything and demand nothing more from the people. We will do as you say." Then I called the priests and made the nobles and officials formally vow to do what they had promised.  13 I shook out the fold of my robe and said, "If you fail to keep your promise, may God shake you from your homes and from your property!" The whole assembly responded, "Amen," and they praised the LORD. And the people did as they had promised.  14 I would like to mention that for the entire twelve years that I was governor of Judah — from the twentieth until the thirty-second year of the reign of King Artaxerxes — neither I nor my officials drew on our official food allowance. 15 This was quite a contrast to the former governors who had laid heavy burdens on the people, demanding a daily ration of food and wine, besides a pound of silver. Even their assistants took advantage of the people. But because of my fear of God, I did not act that way. 16 I devoted myself to working on the wall and refused to acquire any land. And I required all my officials to spend time working on the wall. 17 I asked for nothing, even though I regularly fed 150 Jewish officials at my table, besides all the visitors from other lands! 18 The provisions required at my expense for each day were one ox, six fat sheep, and a large number of domestic fowl. And every ten days we needed a large supply of all kinds of wine. Yet I refused to claim the governor's food allowance because the people were already having a difficult time. NLT 

Instead, lenders today are unforgiving, and lend for profit.  So they are compelled to extract every cent due.  If lending is an act of charity, it builds a strong nation.  If it is a for profit business, it destroys the country.  That is why Nehemiah forbid charging interest, and expected debt forgiveness.  We have forgotten these principles.  So as individuals today, it is wise to not just avoid debt, but ban it from your finances.  Otherwise you will be left at the mercy of the lender when something unexpected happens.  As for the poor, if they are not given charity, they will starve, and grow like a cancer in society.

Jim Anderson

The Truth About Credit