Life in Debt: How the US credit system works

How to get a loan in the United States? And what happens if you don't pay it? Says the correspondent of “Vesti FM " Andrey Khokhlov. To take out a loan in the United States, you need to open an account with an American bank and get a social security number – it is asked here almost more often than a passport. It can also be obtained by non-residents of the country, if they have a work permit or they only want to get the right to work legally in America. As proof, the status of an intern or exchange student is suitable. Another option is a green card or buying a property. If you have any of this, you can enjoy all the benefits of the US credit system. Many of our compatriots are delighted with it. I especially like the rates on loans, says blogger Anton Zanin. ZANIN: Credit in America is the thing that people don't live here without. The loan here is very affordable, you pay almost no interest, that is, if we are talking about some big purchases like a car, a house, well, you pay 1% there. I know a person who pays 1.5%, he took out a loan for 6 years. I came to buy a car at a car dealership, and they sold it to him for half an hour on credit for 6 years. The credit history here plays a decisive role not only in the issue of taking out a loan, but also in matters of employment and obtaining other privileges. It is also called “financial reputation " there. Without it, you may not be hired, it is required when connecting electricity, buying insurance, a cell phone – yes, almost everywhere.

To start your credit history, you need to get a credit card. They give them out here on every corner – in stores, at gas stations-you collect as many as possible. You start using them, and after a couple of months, you can apply for a loan not 100, 200 or 500 dollars, but more, and already directly to the bank. At the very beginning of the "credit path" here you can get a loan. 1 000 – 1 500 dollars. The most important thing is to have time to pay off debts on time, says Maxim. He has lived in the US for more than 5 years. MAKSIM: As soon as your balance becomes negative or you have a day of delay, very large interest rates automatically start to “drip”. And the worst part is that you lose your hard-earned credit points. These points are called credit score. You earn them by paying off various loans. Any delay or non-payment reduces them, thereby blocking the way to an increase in the loan, or even cause the loan to be refused. In America, there are no collectors in our traditional sense. Here, no one will force the debt out of you by force. You can only go to prison for 20 years if the lender proves that you knowingly knew that you would not be able to repay the debt. And this is quite difficult. However, it is precisely with the non-payment of debts that the collapse of the American dream begins. A bad credit history and low credit scores mean that you are no longer a person here. Insurance companies, banks, employers will close their doors to you, and no one will rent you a run-down apartment. Without a chance to get a legally good job, your debt grows like a snowball. Many in this case begin to sell the property to pay off the loan, says radio host from Tennessee Dave Ramsey. RAMSEY: We started from scratch. We created a credit history, we had a property worth $ 4 million. I was 26 at the time. And I lost everything. I know what it's like to count pennies, I know what a lawsuit is, I know what mortgages are, and I know what it's like to have your bank hanging by a thread. We sold our Jaguar. I was upset, because, in fact, it was just taken away from me. And it was rightfully my car. They take things away from you if you don't pay for them. That's how it works – society puts pressure on you if you need something and can't get it. The addiction to credit in the United States has reached huge proportions. According to some reports, the average American even pays for soda and hamburger in a cafe with a credit card. As long as you have a job, it's fine, but if you get fired, the debt increases at an incredible rate because of non-payment, says consumer rights activist Bud Hibbs. HIBBS: When I started doing consumer protection in the ' 80s, we were paying a $ 15 fine for late payment. Now the amount is almost two or even three times more. For example, take a fine of $ 43: if you forget to pay, plus $ 43 for a loan over the amount of the credit limit – this is $ 86 already before something is done. And then the interest on the loan jumps to 21.9, and then even to 28.9. They just sleep and wait for you to be late with the payment of the loan. And the person who has already sold everything, it remains to declare himself bankrupt. But that's all lenders need, says Elizabeth Warren, a Harvard law school professor. WARREN: Do you know what are the most popular customers of credit card companies? Those who went through bankruptcy. And the reason, as the vice president of MasterCard once explained to me, has to do with two things: first, you can't be declared bankrupt twice, and second, you have a "taste of credit". I asked: “What does that mean?”. He replied: “You will willingly pay the minimum monthly payments for life. This is how we earn our money." A lot of people are driven by debt to live on the streets. So, according to the latest data, in Los Angeles, the official number of homeless people exceeds 60,000 people. They build whole tent cities right in the middle of the main streets. Some areas, you can say, are simply occupied by them. And every day there are more and more such people, said local resident Tatiana in an interview with Voice of America. TATIANA: This is not what it was before – for example, homeless. Yes, we all felt sorry for him-he was lying on a cardboard box, asleep. No, now people have made it a way of life – they put up a tent, a heater, charge their phones, right there – a dog. And many of them are no longer able to live because of this. Every year in the United States, there is an increase in suicides among middle-class people. According to some estimates, almost every tenth resident of the United States at least once thinks about death as a way to get away from paying off the loan. And according to the company Credit.com, 3/4 of the country's residents die without paying off their debts.