Quick Answer: Logix Federal Credit Union is legitimate, but the author criticizes their practice of automatically increasing credit limits for financially vulnerable customers without request. The example shows a retiree living on fixed Social Security income receiving an unsolicited credit increase, demonstrating how lenders bear responsibility when extending credit to those unable to repay.
Most of my writing to protect readers has to do with providing advice about what to avoid when getting out of debt. But an awesome reader sent in this mailer his mother received from her most kind credit union. The kicker is she has not worked in 25 years and lives on a fixed Social Security income.
It’s a great example of my old adage “Just because someone will lend you money doesn’t mean you should take it.”
I do have an issue with offers like this where a credit limit has been increased without the request of the debtor. It would be easy for a struggling person to take joy in the increase and get themselves deeper in a debt hole they have no ability to repay. Especially when the offer is received right before Christmas and the Holidays. You know this unexpected gift will result in unexpected gifts, and debt.
Every weekday I read the enforcement actions, filings and fine print the outlets skip, and turn them into the one or two moves that actually improve your position — a rate worth moving for, a fee you can refuse, a deadline to beat before it costs you.
I write Your Money Actually most weekdays — actionable money information you will not find anywhere else, and the small decisions that compound. It is free, I sell nothing, and I take no money from any company I write about.
And this is where the moral argument of “I borrowed the money so I have to repay it” falls apart. Yes, you may have used the credit offered to you but this is a two part process. If a lender extends credit to someone who has no capacity to repay it the consumer is not the only one to bear some liability when things don’t work out.
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Compare Your Real Options: Most debt relief companies won’t tell you about all your options — especially the ones they can’t profit from. Credit counseling has a 21-27% completion rate. Settlement resolves about 1% of enrolled debts fully. Bankruptcy has a 95% discharge rate — and protects your retirement. Take the Find Your Path quiz for a recommendation based on your actual numbers.
This is where I believe that Credit Unions or banks or lenders of ANY kind need to be held responsible. If a lender knowingly issues additional credit then they should be responsible as it affects all who borrow.
I have seen a TEACHER get into $210,000 in debt. How will that teacher EVER be able to pay it back. Yet the creditors kept increasing the line and he kept using it. I am not saying what he did is right but using credit can be a bit of an addiction as we know shopping is.
Financial institutions have a responsibility to the public. People commit suicide over debt problems, that too can be accredited to the financial institutions that extend the credit knowing people may not be able to repay. Like the offers made in the colleges.
This situation highlights the student loan problem. For-profit schools have sold overpriced education which consumers bought and the government funded and it leaves the student trapped with everyone pointing the finger at them. In this case if the consumer had run up the credit that was not asked for then people would point at the consumer as the problem child.