Dear Mastercard… (Request for Personal Debt Ceiling Increase)

by | May 26, 2011 | Schaef Report | 22 comments

Do you LOVE America?


    The following article is republished for your entertainment pleasure with permission from long-time SHTFplan contributor The Schaef Report.

    I often think about what would happen if I was in the same financial situation the US government finds itself in today. Then I imagine writing my credit card company and asking them for an increase on my credit limit. I bet it would go something like this…

    Dear Mastercard,

    I am writing this letter to request an increase in my credit limit. As you know, I have been a lifetime customer of yours and in all that time I have never missed a payment. Unfortunately, it seems as though I have run into a rough spot in my finances lately and have been forced to max out my credit limit with you. I know this was a rather irresponsible thing to do, but I only did it because I was counting on these troubles being temporary. I was sure that I would be back on my feet and able to pay all of my debt by now. However, this rough spot is lasting a lot longer than I thought it would. Now that I find myself out of credit but still in need of funds, the recent debt I have accumulated is causing me to have trouble making even the interest payments to you.

    I want you to understand the gravity of this situation. It is not only I who depend on your credit so that I can make my BMW payments on time. I also use your card to pay for my sick mother’s medicine and for my son’s education. In addition to that, my wife just lost her job and I have been using your card to buy her all the food and clothing she needs. So you see, if you cut off my credit now my entire family will be devastated. Not to mention the fact that my credit score will be ruined if you don’t do this for me. Please don’t let that happen, because if my credit score gets ruined, not only will it affect my ability to borrow more from you, but it will also likely cause Visa and Discover to cut me off as well.

    Anyway, I don’t really see what the big deal is. You know that if you increase my limit I will then be able to make my minimum payments to you, and if you don’t then I won’t. It’s quite easy to see what the right thing is to do here! I don’t want this letter to get nasty, but I would be foolish not to point out that you need me as much as I need you. You know it is in your best interest to grant my request. Not to mention the fact that my mother, my son, and my wife all have credit cards with you too and that cutting off my credit will result in them defaulting on their payments to you as well. Can you really afford to let that happen? In my opinion, this is a no-brainer.

    I anxiously await your decision. By the way, I need to hear back from you immediately. The quicker I hear back, the quicker you get paid, know what I mean?

    – Schaef

    Mastercard response:

    Dear Mr. Schaef,

    We sympathize with your situation. However, it is not the responsibility of your credit card company to provide income for you. We provide credit, which is much different from income. Credit provides liquidity to you in situations where you need something immediately, but don’t have the funds to pay for it. In return for our services you pay us back the money we lent to you along with a finance charge (also called “interest”). That’s how credit is meant to work. It’s NOT meant to work like an ever icreasing stream of loans that mushrooms to the point where the interest payments alone will cripple you and force you to come back to us asking for perpetual increases. You talk about not being able to afford the interest payments, but do you ever plan on paying back the principal?

    Also, why are you worried about your credit rating? That is just a fictional number which doesn’t really have a true bearing on the credit-worthiness of a borrower. The fact that you consistently have lived outside of your means for so long speaks more to your credit-worthiness than some arbitrary number would. Besides, we have cut off credit to borrowers with much higher credit scores than yours before.

    And we are very sorry to hear that your entire family is now dependent on credit to maintain their current lifestyle. However, the blame should be put on you for letting your financial situation come to that point, not on us. We understand that food, clothing, and medicine are basic necessities in life, but BMWs and college aren’t. Perhaps you should trade in your car for a less expensive one and tell your son that college will have to wait for now.

    I’m sorry, but we are cutting you off. We hope that you are able to continue to pay us with the current level of income you now have, but if you can’t perhaps you can sell some of the items you have accumulated over the years and use that money to pay us back. Doing this may help you maintain that important credit score that you seem to be so concerned about, and since you bought most of that stuff on credit it never really belonged to you in the first place. Also, in the future, perhaps you should try saving your money and then paying cash for things whenever you can. It helps build character and keeps you from believing the lie that you can have everything you want whenever you want it without ever having to work for it. Just a suggestion.

    Good luck to you.

    Visit The Schaef Report for financial, economic and political news and updates.


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      1. If you or I attempted to manage our personal family finances the way that the US Government manages the finances of our country …… then you and I would be in jail serving a long sentence for fraud and writing bad checks.

      2. This is great. It puts the National debt in perspective, real terms all can understand.

      3. LOl…are you kidding? Have you ever been maxed out on credit cards before? I have and guess what…they just keep increasing it. I have filed BK in the past and guess what? I got a new credit card offer within two weeks of having the case closed.

        Heck my cat could get a credit card!

        In reality the banks would be like this:

        Dr Mr or Mrs John Q Public;

        We are please to increase you credit line as you are noted as a excellent customer who never missed a payment no matter how much we charged. We would also like to enroll you in some additonal programs for your own protection at only $20.00 a month. This insurance would pay your min monthly balance if you were ever injured or sick. We also would like to extend a life insurance policy to cover you balance in the event you die before you ever actually pay off you balance. (Which we know you never will.)

        We are also pleased to inform you that you can get addional cards for every member of your family to use at no extra charge.

        And we also would like to enroll you in our automatic dedustion, paperless, priceless, over the top, payment system. Never worry about ever missing a payment with your enrollment. We will simply snatch the mony right out of your checking account. Or better yet…You can charge it to another credit card.

        As a special gift we would liek to send you these mailing adress labels free of charge. Please note your address may not be correctly printed on the label.

      4. That’s correct, my ‘debt ceiling’ is the same as my
        ‘income ceiling’: when my paycheck is spent, I’m done.
        Not so with our politicians. To them, money simply
        grows on trees…it’s everywhere, and it’s free! No
        worries, we’ll just borrow (or print!) more. There is
        a neverending fountain of money flowing upwards into
        the politician’s hands, to be spent freely any way they
        so desire. Tra la la la la, being a politician is so
        much fun!

      5. What lunatic would put tuition (or a BMW) on a credit card?

        Ah, but it’s more insidious than that. You see, Joe Modern doesn’t get buried because he bought huge-ticket items on plastic.

        Oh no… it’s because he bought, over the years, all of his daily $6 Starbucks triple lattes on it – at 9% interest. He also bought all of those little items like mp3’s from the online music store for the smartphone he bought (and pays bills on), all with the same card. He buys neat bits for his wife on that card at least once a week. He used it to get his new 62″ plasma-screen TV. He sees that he’s nearing his limit, so he asks for the ceiling to increase, and the CC company happily complies. He then bought an XBox with it, and the dozens of $50 games that go into that XBox. He buys neat but over-priced toys and distractions for the kiddies with it, and insures that they have the absolute best and in-style clothing for school with that card. As the monthly bills went up, he eventually started using it to buy groceries, and pay his electric and gas bills. Then the card company, seeing that he’s only paying the minimums, jacks the interest rate on the principal to 15%. He then misses a payment (whether it was his fault or not), and the CC company uses that as an opportunity to jack the interest rate to 23%. The minimum monthly bill becomes big enough to match the monthly grocery bill. His other cards are starting to do the same… and his mortgage is already an astounding 35% of his monthly bills.

        All of these things added up to a point where Joe Modern is now fully enslaved to the debt machine. “No worries”, thinks Joe, as he can keep up with the payments, he gets raises on a regular basis, and he has a ton of stuff.

        Then, Joe loses his job due to layoffs. Suddenly, Joe can’t possibly handle all that debt, not on unemployment.

        I think you can see where it goes from there. Now multiply it by approximately 20 million times.


        I can tell you that it doesn’t even have to be credit cards or reckless spending of debt. Confession time: In my own case, my missus wound up with a medical condition that got her sent to the ER. As a fully-covered disabled vet (first Gulf War), the VA normally covers any and all medical costs she has. However, all it took was one trip to civilian hospital ER (plus a weeks-long hospital stay), and the VA screwing up the paperwork, and suddenly life ain’t fun anymore. The total came up to $75k (including surgery, ICU, doctors fees, and all various fees in total). My insurance company wouldn’t touch it (“You need to talk to the VA – she’s not covered on your policy”), the VA totally screwed the pooch (“I don’t care what the ambulance driver said, our ER was not full that day, so we aren’t paying it!”), and the civilian hospital demanded minimum payments that would qualify as a mortgage in its own right. The civilian hospital would not wait for anybody, and submarined a garnishment that blew the actual mortgage payment for two months before I could correct it. This caused a chain reaction with the bank, who promptly slapped on massive fees and demanded that I pay roughly double the usual mortgage payment, plus a $500/month late fee for the previous month, until things got caught up (this is where I discovered just how evil BoA really is).

        My answer to them all? Chapter 13. The medical bills dropped to less than 10% of original, the bank ate a loss on the house and got nothing else (we were restoring it at the time, so whoever bought it at auction is in for a nasty surprise if they didn’t inspect it first), and everything was wrapped into a tidy, but manageable package that gets paid off over five years.

        This is the funny part – the only brand new furniture I’ve ever had in our house is the mattress, the couch, and a pair of stools. *everything else* I bought from Craigslist, Goodwill, etc. Recently, I broke down and bought a new TV (a 32″ LCD), with cash. I have no credit cards. Even my computer consists of parts bought here and there, and assembled in a case I’ve had since 2003.

        The whole thing taught me a lesson or two:

        1) Never trust the VA for any damned thing unless you only go there.

        1a) Use private/work medical insurance first, before contacting the VA, and avoid an HMO if at all possible. Make sure it covers you and the family. (I assumed that the VA would cover her well enough that she didn’t need to be on my insurance. Big mistake on my part).

        2) F**k Bank of America and its legion of money-grubbing con artists. If it ever comes to SHTF, and a refugee arrives saying that they worked for BoA’s mortgage department, I’m still not so sure if I’d be charitable about it, or if they’d be escorted off the premises with flying lead (I think my wife would save me the dilemma and shoot first, aiming for his testicles).

        2a) Credit Unions are far, far better institutions.

        3) Even ordinary credit card usage (not excessive, but ordinary) will create a pile of debt that, while easily manageable in good times, can become a hazard in even a personal SHTF situation. I only have a debit card now.

        4) Save up for emergencies! Not just food, ammo, and such – but money. So far, I have two months’ income backed up in the bank… I want six.

        5) Stock up on the tangible goodies, too. Food stocks, ammunition, water, etc.

        I know… long-winded. Felt good to let it out though. 🙂

        • Wow did you ever get the broken shards of glass in the a$$ treatment! I didn’t have a medical situation, I had a divorce. And my ex did me a number financially (I’ll spare you all of the details). It took me almost 10 years to fully recover financially -the debt I was saddled with was astounding and smut on my credit report could have made anyone weak in the knees (and like it or not, our credit scores make a difference in many things).

          Fast forward to today- I don’t see me getting hitched any time soon. While there are lots of great people, I am not interested in the state deciding I can be shafted by a spouse again (filing for divorce does not protect you from the financial shaft, I learned the hard way). Being married by state standards and being married in the eyes of God are two seperate issues. My financial management is unchanged. I have no debt, have a year worth of money set aside tangible, not in the bank(just in case) and do not plan on changing a thing.

          And hey, long winded is sometimes just what we need. I hope everything stays on the good for you OQ.

      6. I get amused when I remind all the dems who complained about Bush’s deficit spending and their response is Obama had to spend money to help the economy recover. Deficit spending is bad when both sides do it!!!!

        • There is really no significant difference between the two parties. There is only one party, owned by the corporations that profit by war (etc.). There is only one war party. Trillions have been flushed down the military industrial toilet. What have we to show for all that expense – lots of death and destruction, torture, and a collapsing economy.

      7. Hi all,

        It’s the second day of the silent protests. People in major Greek cities are out in the streets.
        We demand dignity and change of the current political system.
        All robers to leave the country now.
        I’m leaving home to go to the gathering again.
        I’ll take my credit card in case of emergency 🙂

        be safe people.

        • Manos….Be safe and keep us posted.

      8. Manos- please be careful at the gathering. We’re like yout second family here and we don’t want anything bad to happen to you. Stay safe and keep us updated.
        OddQuestioner–I loved the part about your wifes probable response to BofA refugee showing up at your house! I know what you mean about being in a big debt hole. Mine was almost 20 yrs ago and it was more stupidity on my part than anything else. It took 4 yrs of living like a hermit but we paid it all off. Now, I’m a cash only kind of guy. Must use a bank to cash paycheck so we keep a running balance of about 30$ in a checking account. But never use credit or any other bank services. I got a debit card(which is fine for most people)when I opened the account 12 yrs ago and have never used it. Pay as you go–Cash is king. I only wish the paper money actually represented something besides gov promises, but at least it still works. For now.

      9. I remember back about 7-8 years ago the two credit card companies I had kept increasing my debt celing about every 6 months. Both cards had been raised to about $16,500 each even though I would usually only spend about 1k a month on one of them. You never had to ask back then and how times have changed.

      10. @manos: Take care and good luck. Getting the EU to behave itself, from what I hear, is a pretty rough job.

      11. Is there not any more countries we can bomb for humanitarian reasons #1? Our military members have to have a Bank of America government credit card to deploy. Think about that for a moment.

      12. Manos, take care out amongst them. Somebody please copy this article and send it to Tiny Tim (Geitner).

      13. credit cards are evil…what needs to change is the lifestyles of the college grads who cannot find a job, the parents who give their kids everything they want, and anybody else who wants everything and wants it now.

        • I’ve noticed you post a lot about the entitlement attitude and “gimmie” lifestyle. I agree that many college grads would not know what to do if they couldn’t get what they want RIGHT NOW, but you may as well just say Americans. I am always amazed at how much most Americans take for granted, and I catch myself doing it from time to time thought I have seen how absolutely poorly others live in other places of the world. We could all use a daily reminder to be more greatful for the gifts in our lives! I’m glad there is a kindered sould out there who seems to feel the same!

      14. BJ,

        None of these, thank you. I’m much more handsome as my wife tries to persuade herself 🙂
        I live in Crete, so here is a small youtube from the 25th protest. I also have videos and photos from yesterday. I’ll send them to Mac and he could post them here.

        something is starting all over Europe. People are getting of their couch and start to shout: No more.
        Our government has shit its pants, and today (the 27th) they called up a meeting of all political parties. They want to get an aboslut vote of trust for their actions.
        If they don’t get it, we are heading for elections within the summer.

        Be safe everybody. I pray for all of you to be safe. Terrible things are happening to your country also. Is it natural, is it manipulated, who knows?

      15. Feudalism never left this world. In what is known as third world it remained obvious. But in what we see as the developed world it went in stealth mode. So in simple terms what is feudalism (I know it is not the dictionary version but just trying for people to see it differently) – people living on land they don’t own and will NEVER come to own and working for a master that pays them very little for their labour. This goes on for generations. For a very short while people actually started to break the shackels. They owned their own land and they started to work in their own businesses. But now all is being reversed. Any thoughts?

      16. Thanks for the video Manos. I haven’t heard anyone speak Greek since I was a kid… friends, George and Pete Toubekis dad, Spiros Toubekis used to speak it all the time with his wife and parents who knew no English when they moved to America in the 70’s

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