Tighter credit policies are good for us!

Their has been a lot of talk about the fact that credit for most people is harder to get these days. Some say it is a bad thing and will hurt our economy and others disagree. I too disagree as having less access to credit keeps us that much more out of debt. The banks are getting hit hard with defaults and really pulling back. I am glad!

Rewind a few years and think about all the different credit card and personal loan offers we got. Also remember the housing prices skyrocketing and banks lending to practically anyone who had a paycheck. Fast forward to today and look at the mess they are in. Credit limits are dropping, interest rates on consumer debt skyrocketing upwards, and foreclosures are left and right. Both banks and people got in over their heads and this is the fallout.

Based on these events it is now more difficult to obtain credit. I like this because it forces us to save for what we want and not senselessly borrow for it. I cannot think of a better reason to accelerate our debt repayments (aside from saving on interest) than the very fact that it is now a lot harder to get more credit! I hope it stays this way for a long time.

America really needs to get their savings rate up. We cannot rely on government bailouts and social security to carry our weight forever. If we lose at least some access to credit we will be forced to save or go without which I think is a great thing. Get out of the paycheck to paycheck rat race and act like we have a future to save for!