Tom Richardson, an academic who studies the intersection of debt and mental health, recently spoke candidly about his own experience with credit cards. He told us the harrowing story that started right in his hometown’s guitar shop. His story is a reminder of the dire consequences that can stem from predatory lending practices, especially for those who live with mental health conditions.
Richardson, who has bipolar disorder, opened up about a particularly traumatic manic episode. It was during that time that he wildly spent money he never truly possessed. “I just came in for a bit of a look. There wasn’t anything in particular I wanted,” he explained. What began as an innocent trip turned into a life changing financial hardship. He spent the time and his refund on tons of musical equipment including an electric guitar, speakers, guitar pedals and even a trumpet.
At the moment, Richardson felt like he was making the smart decision by restricting himself to a single credit card for emergencies. Unfortunately, the reality was far different. This didn’t stop him from accumulating nearly £5,000 ($6,600) of debt. Even after paying hundreds of pounds per month, he was getting nowhere on the principal balance. “When you’re manic, when you’re impulsive, it just doesn’t feel like real money,” Richardson noted.
The initial reaction of lending institutions to Richardson’s plight is, to put it mildly, shocking. And without any warning or consultation, he was sent notice of a $5,000 increase in his Santander credit limit, bringing it to $5,000. But automatically he’d chosen into a program that permitted for automatic increases when he first signed up for the card. Because of that advocacy, the increase was able to happen. It was astounding,” recalled Richardson, about the cavalier manner in which credit was issued despite his deepening financial distress.
Richardson’s story should give anyone serious pause on how lenders treat our most vulnerable borrowers. While trying to pay off his debt through responsible means, he was surprised to receive deluges of unsolicited credit offers. “It would be offers in the lines of, ‘your credit card approval rate has increased’, inviting you to look at lenders,” said Amanda, another individual who has navigated similar financial challenges.
Even though he tried his damndest to pay down debt, Richardson was made to feel like a failure for failing to relaunch new credit every quarter. When you’re already having difficulty, the worst thing you can offer is additional credit. What you need is someone to say: ‘Stop and get help,’ picturing Michael, one of our mental health champions, who has advocated on behalf of those experiencing the same financial distress.
Richardson’s case reminds us all that there is a dire need for responsible, nondiscriminatory lending practices. This is all the more urgent for those suffering from mental health crises. His odyssey unearths the problem with managing money in high-pressure situations. It sheds light on a persistent problem across the credit industry which often prioritizes profit over the health and well being of borrowers.