Announcing CR1 (Credit Revolt I)

Parallel to our coverage of TR2 (Tax Revolt II), we’ve noticed that an interesting aspect of the financial crisis, and the flip side of a rising savings rate, is consumers spurning credit card companies – some in creative and demonstrative ways. From the WSJ:

When Fred Wilharm decided to ditch his credit cards, he reached for the chainsaw.

The real-estate investor from Franklin, Tenn., sliced, drilled and shredded his credit cards in his YouTube video “The Tennessee Credit Card Massacre.” Mr. Wilharm says he had just paid off $3,000 in credit-card debt after the card issuers jacked up his interest rates, and that making the video helped him deal with his anger.

His only regret about the video: “Explosives would have been nice.”

…Mr. Wilharm is one of at least several dozen people who have posted an online video of a “plasectomy,” a term credited to Dave Ramsey, a radio talk-show host with Fox Business News. Some depict cards being chopped with scissors, shredded in blenders or chewed by lawnmowers. Others show cards set on fire, or doused with liquid nitrogen and then shattered with a hammer.

It’s interesting to note that some subjects of the article sound like credit worthy borrowers, rather than folks who’ve overextended themselves. Of course, it’s not unusual to hear of banks contracting credit availability in an economy like this one – that’s a very natural outgrowth of the deleveraging process, as the banking industry withdraws from the excesses of recent years - but it will be interesting to see what kind of long term backlash this provokes among consumer credit users of all stripes (if any) and what it could mean for credit card companies.

Speaking of backlash, we’re considering a moratorium on cute, thematic acronyms, lest we inspire a reader revolt against our blog (RR1, anyone?).

URLs:

http://online.wsj.com/article/SB124528467015725739.html