CHESSNOID

I had perfect credit and a great credit score, but in this economy I don’t think FICO no longer applies.  I have had credit limits reduced and inactive credit cards canceled.

Creditors are not using the traditional 3 C’s in determining who is credit worthy.  (The 3 C’s of credit refer to Character, Capital and Capacity).  The banks, mortgage companies, and other lenders have made such poor decisions in the past that they really don’t care how you look on paper. They just can’t afford to lose anymore and don’t want to take on any risk.

Even though they have used trillions of taxpayer money, these creditors are just using the money to stay afloat.  That is why the credit crunch is still here and no progress has been made.  I still get a ton of comments from my American Express posts about credit limit reductions and card cancellations, yet AMEX has converted into a bank and will be getting tax dollars from TARP.

NEW YORK (CNNMoney.com) –

American Express Co. announced Tuesday that it had received preliminary approval for a $3.9 billion government bailout investment.

The capital injection will come from the Treasury Department’s $700 billion Troubled Asset Relief Program, which in part provides capital to banks in exchange for preferred shares and high-paying dividends. If approved, American Express would be the ninth biggest capital investment of the more than 100 Treasury has made in banks so far.

Amex like the other financial institutions should be allowed to fail.  They should not be bailed out using tax payer money.  Some may argue that it would be worse if we allowed these companies to fail.  They base that on nothing which is the same argument Bush, Bernanke, and Paulson used to try to scare Americans to support the bailouts.

The majority of Americans do not support the bailouts because we know the tax money spent will not be allocated to what it should be used for.  The perfect example is Paulson spending $350 billion in less than 3 months and not a penny used for what he originally claimed was needed or the recession would get worse.  Funny thing is it has become worse and now he is asking for the other $350 billion. Is this another Madoff Ponzi scheme just to get free tax money?  Let me see, Amex cut our credit lines, then asks for our tax money to keep it afloat and pay for its bills? Why would we agree to this?