Chase Freedom

OK, I must be going crazy, I admit it. Last night I think I saw an ad for Chase Bank about a new product they have (a credit card) called Chase Freedom. Oh my gosh, am I going nuts or is the financial industry really selling "freedom" with their humongous debt-inducing product?

Actually, I believe it's true. I watched and was incredulous at the presumption but obviously their marketing department trusts that people will continue to buy-in no matter how big the lie becomes. Who knows, maybe the bigger the better!

And darn right you'll be chasing freedom for a long, long time if you take them up on using their product to achieve your fantasy life. Now that's something you can count on!

But hold on to your seats, there's more. A recent CNN Money article reports that Americans are not only spending every red sent but more. Read the article: http://money.cnn.com/2006/12/21/news/economy/savings_rate/index.htm?postversion=2006122116

"Friday morning the government will report on personal income and spending for November. For the last 19 months, the report has shown a negative savings rate. That means American consumers are spending more than they're taking home after taxes. The savings rate was a negative 0.6 percent in October. In other words, the typical American spent $100.60 for every $100 of take home pay."

So what does this tell us? Typical family budget expenses are outpacing incomes.

"The savings rate compares after-tax income to the money spent on a wide range of items. It turns negative when people take on additional debt such as home equity loans or other credit, or sell assets, so they can spend more than their take-home pay."

Notice how the subtle way the "victim" is being blamed here. No mention that the cost of living is going through the roof and families are struggling to fill the gap. This assumes that all people are spending on things they do not need, which is not true at all.

" Before the current streak of negative rates started in April 2005, only one month on record back to the late 1940s had a negative savings rate. As recently as the second quarter of 1985, Americans were saving more than 10 percent of their paychecks."

Well, duh, there was more value to each unit of currency in 1985 which meant people actually could save if they chose to. Notice again, the undercurrent of blame aimed at you the consumer for your lack of prudent money management.

Now here's the kicker. Dean Baker, co-director of the Center for Economic and Policy Research said this negative savings rate will only end when consumers cut back on their spending but since consumer spending accounts for about 70% of the gross domestic product, spending cutbacks could spell recession as soon as 2007!

The article goes on to then blatantly blame the consumer for thinking they didn't need to save due to the easy money of home equity lines of credit. This is the party line for sure and of course as with all half-truths, there is some truth to it.

However rarely does the whole story get told because for those involved in any aspect of the financial industry, it would be biting the hand that feeds them.

Here the part of the story that almost always is left out: All money is debt-based and as such, in 2006, now carries more debt than equity. This shows up as exponentially compounding interest that must be added to the cost of goods and services that, in turn, raise the cost of living at an exponential rate to cover debt service costs. Individuals and families, as a result, are failing to be able to meet skyrocketing basic expenses with their incomes and by default turn to credit. This does not mean Americans are not overspending, they are, but that's only part of the problem.

Time to get real, folks. If you put your trust in the corporate financial industry to give you the tools you need to insure your financial stability and security going forward, think again. I'm afraid you will be left to suffer the consequences of Chase Freedom for a long, long time.

Time to think for ourselves, learn new tricks that work for us and get empowered. Trust me, the economy can thrive without having to feed the furnace of the mega-corporate financial beast.

Susan Boskey is author of the book, The Quality Life Plan: 7 Steps to Uncommon Financial Security available at http://www.AlternativeFinancialNow.com where you can also sign up for the free e-course to learn more. Her book presents a unique personal finance formula to help everyday people create and sustain a debt-free lifestyle