Dialogue: This gift horse is a three-legged lemon

LOUISA HERD* wonders if banks provide too much encouragement to spend up large on credit, given the frailties of human nature.

I got a nice letter from my bank recently. The blokes at head office felt that, as the old man and I were such valuable customers, we could have another grand on the credit card limit.

That's good of them, I thought. Handy, a bit of extra boodle, come in useful if I have to go home to Britain in a hurry or our decrepit washing machine gives up the ghost after Saturday soccer, 12 strips to be washed and the laundry basket full of stinky socks.

I have a good relationship with my bank in spite of recent media exposes of financial jiggery-pokery and I felt touched that the suits in Wellington should think so kindly of us.

Being Scottish and gifted with a genetically superior outlook on money matters, I mulled over this fiscal gift horse and decided to look him in the mouth. He's a three-legged lemon.

I like to look over the property pages in the Weekend Herald. It's fun reading about luxury penthouse apartments or elegant lifestyle blocks and planning which one we'd buy if the lucky numbers came up.

Leavening this frothy mix are the notices of mortgagee sales. They appear to be ordinary family homes, mostly, in ordinary suburbs. Frightening when you read closer.

They're people like us, trying to make a crust, look after their kids, have a bit of weekend rest and recreation. Then redundancy hits, sickness strikes or the marriage goes klunk and the whole innocent Kiwi dream falls apart.

Yet how many of these people were offered more money on the plastic fantastic by their caring bank while everything was going great? How many - human nature being what it is - spent up large on the credit account?

Banks and finance companies remind me very much of the doting grandma who feeds your 4-year-old lollies on demand, then does a haka when he vomits on the shagpile. They seem to fall over themselves in dishing out cash on loan.

It appears that the more you borrow, the more these guys are willing to lend. There's a considerable danger, though, that they might just pull the rug from under you and there you are, like a nun who's ambled into an orgy, wondering just what the devil happened.

These financial whizzes are supposed to be clever jokers. Surely they must realise that people do daft things, that nine out of 10 otherwise intelligent folk will, on being offered extra dough, go out and have a leer up.

Man, I find it hard. Here we are, trying to restore a rundown dump of a house and that extra grand, well, that's a fifth of a roof, wallpaper for four rooms, a new hot-water cylinder. A fridge that doesn't freeze the lettuce, for goodness sake.

The card lies in the sideboard drawer singing siren songs. Light fittings ... paint ... a mirror door wardrobe ... I put my fingers in my ears.

I've never been self-employed but have heard plenty of tales, possibly apocryphal, about small businessmen who get in a bit over their heads, borrow a lot of money, borrow more money, go down the gurgler in a slow spiral and, at an arbitrary point determined by the bank, the heavy artillery is called in and the guy gets his little world sold out from under his nose. Classic good cop, bad cop scenario.

Surely the so-called business managers could step in before this and offer a bit of help to the budding tycoon along the lines of how to manage his affairs a bit better.

I would feel a bit miffed if the bank manager said "no" to a request for extra dollars, but I'd also feel grateful, in a way, that the bloke was being like my mum - practical.

Is there a reason for lending us apparently unlimited amounts of cash without seeming to inquire too closely into our ability to repay it easily? Do these money companies act as agents provocateurs encouraging ordinary people to live beyond their means?

I don't know. There's probably some complicated explanation for it involving the balance of payments to Pluto and the need to have every home in New Zealand equipped with DVD and a giant telly. Buy now, pay later. No repayments until January. Secretly, I have a sentimental yearning to hear, "You'll have to save your pocket money for that."

I know the civil libertarians will squeal and the anti-bureaucracy wallahs gnash their teeth, but I'm sorry. Sometimes we need a bit of big mummy. It's all for our own good.

* Louisa Herd is a Wellsford writer.