I have a friend here who has just moved to the U.S. from Europe. He has a good job, but struggled to get a credit card. When he did get approved for one, his credit limit was $300. He was lucky though - he has some other foreign friends here, who could only get prepaid credit cards when they moved to the U.S.

Tough for them, but seems reasonable right? They have no credit history here, so credit card companies are reluctant to extend them credit.

But this is America, and we love our debt, even after the big credit meltdown. This same friend went out car shopping, and it’s a whole different story there. Some dealerships wouldn’t extend him any credit, sure, but others were more than happy to extend him a 3-year loan with payments over $400 a month. (His salary’s not THAT good!)

The real shock for me was the dealership that he ended up buying from - they approved him for financing for up to $45,000. That’s approximately his annual salary. The payments (over 5 years) would be over 25% of his take-home pay.

I guess the dealerships are happier to extend credit to “unknowns” because there is some collateral involved (the car.) But the size of that offer was crazy. No wonder we have people drowning in debt. When you’re offered a $45,000 loan, it starts to seem responsible to only borrow $20,000!