The Media and the Recommendations and Warnings of Consumer Credit

I always find it amazing to read news stories and commentaries about personal finance put out by the mainstream media. Many of them seem to lack any focus in their messages to consumers, if they are not openly schizophrenic. This may be due to the fact that these large media corporations are attempting to appeal to the broadest audience possible, but conflicting stories serve no real purpose but to keep up the appearance that everything is the same even if the world and economy are radically changing around us.Take, for example, a couple of the stories posted by MSN Finance recently. One is titled “The Credit Card Party is Officially Over,” which discusses credit card companies jacking up interest rates and the overall drying up of consumer credit. Even for consumers who have a perfect credit history, banks are cutting down on the limits offered to them on new lines of credit and are trying to discourage people from opening new credit cards in order to transfer balances from old credit cards. Overall, the article is somewhat cautious about consumers using credit and advocates them taking care of their own personal financial situations without borrowing more.However, just a few stories down is another article published on MSN Finance, although it is taken from Bankrate. This one is titled “Why You Need Multiple Credit Cards” and deconstructs the arguments against having multiple open credit lines. The wonders of using consumer credit are boundless if used correctly, according to this article, such as the feeling of financial safety and the lure of rewards for using the card. People who use their numerous credit cards wisely will also boost their credit scores, which means that they will pay overall lower rates of interest on other debt, such as housing or auto loans.So, the message is… what, exactly? Maybe the message is that credit may be used wisely to rack up rewards and feel safe, until the bank jacks up the interest rate and lowers the credit limit. That does not seem very reassuring, and the average person will have to decide between heeding the warnings of the dangers of credit or continuing to do their best to keep on top of a mounting pile of debt. The fact that the second article aims to reinforce spending through credit cards is not surprising: consumers should use more credit, so that they can qualify for lower interest rates on more credit. The circle only ends when the homeowners are in foreclosure or the consumers are in bankruptcy.But of course, finding oneself in bankruptcy or foreclosure can not be blamed on the poor decisions of the consumer or the misguided advice of the financial gurus. People who do not save for a rainy day have a brain disorder is all; or at least that is what CNN Money has to say about it. An article titled “Can’t Save? Blame Your Brain” discusses the psychological differences that humans feel when given a choice of instant gratification compared to waiting for a larger reward later in time. So all those home buyers who are now trying to stop foreclosure before they lose their overpriced homes that were bought at the top of the market can put the responsibility for their situation on the physiological makeup of their brains, not on their lack of ability to control the thoughts and feelings that go on in that brain.The only solution offered in a recent article, of course, is to trick oneself into saving money now. CNN Money has an article about this, as well, titled “Fool Yourself Into Saving Smarter.” Saving up a few thousand dollars and then spending it on more consumer goods like iPods or big-screen TVs, though, is little better than just applying for another credit card to use “wisely” and rack up “points.” Much more effective would be a change in attitude about the role of money in one’s life; whether or not it is to be used just as a blunt object to score points and more stuff to keep up with the neighbors. Money represents energy and the ability to do work, and it is doubtful to me that anyone should just expend energy to keep up an appearance of having more money.The large mainstream media corporations are not there to provide consumers with the most important information about the nature of money and law, though. It should not be surprising that they encourage people to continue consuming far beyond their means through credit cards, while quietly warning them of the dangers of this activity. But even those who end up in foreclosure or bankruptcy can not be blamed for ignoring these warnings — they are just responding to the chemicals in their brains that tell them to consume until they lose it all. Of course, the media and banks also can not be blamed for the propaganda; after all, they issued a few perfunctory, half-hearted warnings, right?