Lenders keep trying to suck my family into a vortex of debt.
We're standing firm.
Just as President Bush was announcing a deal with the mortgage industry to freeze adjustable rates for up to five years in some cases, Countrywide was aggressively marketing a $365,382 cash-out refinance to my family.
We don't want it. We can't afford it. If anything, we're anxious to dump our 30-year, 6.5% fixed-rate mortgage for a shorter-term loan.
Just after hearing from Countrywide, we were also pelted with "convenience checks" for two MBNA credit cards and a solicitation to open yet another. Nearly every store where we shop has its own credit card with an enticing deal.
The Gap(GPS) offered us 5% in rewards for every dollar we spent on the store's card, plus free shipping from Gap.com. We recently booked a vacation through AAA, which tried to tempt us into opening a credit card that offered 2% off our trip.
A friend recently told me that he never stops hearing from Capital One these days. He said he opened a card with the company last year, but stopped using it after being continually deluged with solicitations to borrow even more money.The greed never seems to stop.
Debt is the root of the country's present economic woes. Americans are losing their homes because many signed on for adjustable-rate mortgages that they ultimately couldn't afford -- loans that were often aggressively marketed. Home-equity lines of credit also tempted homeowners whose property values were skyrocketing. However, the adjustable rate associated with many such loans made the payments harder to stomach as the interest rate increased. Declining property values have left many homeowners who borrowed too much equity with a shortfall on selling.
Easy access to credit-card financing -- which lenders perpetually market to families like mine through seemingly endless snail-mail solicitations -- makes it easy for people to get in over their heads. A quick fix, such as refinancing to adjustable rate mortgage, may take the heat off for a while, the thinking goes.