Oh #@&! The Credit Card Company Held a Gun to My Head and Forced Me to Use the Card!
Posted by Cap in Personal Finance |
While in class a couple of days ago, I overheard a few college classmates complaining about their credit card bills.
“Freaking evil credit card companies,” says one person, “I’m riddled in debt because of them.”
“Yeah I totally know what you mean, I keep paying my bill but it’s just not going down.” says the other.
Two things I’ve learned from this conversation:
- Constantly eavesdropping on people is bad for your blood pressure level.
- Apparently, credit cards company can magically force you to spend money.
It’s no secret that credit cards generally come with a hefty interest rate. It’s also true that a credit card debt can be significantly harder to pay off than other types of loan. But blaming a credit card company for the debt you incurred and calling them evil is just plain stupid.
Now, don’t get me wrong, credit card companies are hardly saints; there are plenty of them out there with unscrupulous practices. But even with all the negative aspect of a credit card, when was the last time you saw a credit card pull out a gun and force it’s owner to use it?
If you have a credit card debt, you most likely have a problem. One of the first step in fixing a problem is to examine the cause of the problem.
When I was in debt, the reason for the debt was fairly obvious.
No body forced me to buy the mountains of Japanese comic books, computer hardware, and automotive parts. Sure, the credit card made it easier for me to spend money I didn’t have — but the reason why I spent frivolously was because I was a complete moron.
That’s all there was to it. There was no mystical force from New Jersey, telepathically forcing me to spend.
Accepting personal responsibility for the financial choices you make can go a long way. We’ve all screwed up now and then, the important thing is to realize how the screw-up happened and what can be done about it.
If at the end, you realize that a credit card is just not the right financial product for you (because it makes it too easy for you to spend) — great! Don’t use it!
It’s as simple as that.
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October 5th, 2006 at 5:32 am
Haha, the two-word mystical phrase that seems to evade so many of us: “personal responsibility”.
October 5th, 2006 at 5:49 am
Note that they seem to think that just paying the bill (ie the minimum payment each month) is supposed to do the trick. No, it’s supposed to make the debt go away in ten to fifteen years. You want it faster than that, you better throw more than $37 a month at it. Math isn’t magic.
October 5th, 2006 at 7:18 am
Helloooo, with colors and names like GOLD, PLATINUM and BLACK credit cards, doncha ya know I’m going to let my friends know I am SOMEBODY special? [/snark]
October 5th, 2006 at 6:30 pm
Drunken college nights + new-found independence + excessive on-campus marketing = BAD idea.
October 5th, 2006 at 7:25 pm
Yes, personal responsibility is important. Many young people, however, have never been taught thing one about managing money. They simply don’t understand how it works. The companies take advantage of that. There are thousands of people who sit in their offices all day thinking up new ways to take advantage of that.
And they take advantage of us in many other ways: http://www.bloggingawaydebt.com/2006/10/did-you-hear-that-it-was-my-jaw-hitting-the-floor/
October 6th, 2006 at 5:38 am
To not-so-fast:
To think that you expect young people to be put in a classroom and taught money management (then master all the details) is comical at best and tragic at worst.
Do you advocate banning all credit cards?
October 7th, 2006 at 12:40 am
K: Looks like you’re misinterpreting Not so fast. NSF didn’t say anything about a classroom, and even said personal responsibility is important.
Noe one is fully to blame, the credit card companies or people who don’t know any better. The world is full of companies trying to sell products, and the information provides fills in holes left by parents, independent thinking, and decent teachers. Regular schools have way too much information to try to provide to students than to spend time on money management.
The biggest problem is probably parents who do not teach (by example or otherwise) their kids money management skills when it is important for them to learn them. But it’s not just about money management, it’s about learning how to be independent thinkers and not responding so easily to the media, which is a huge influece even for intelligent kids.
The media is a huge influece on everyone, and the message is spend, spend, spend. That message is not meeting any conflicting knowledge…
So yes, there needs to be more personal responsibility, but something has to fill the void before the credit card companies (and insurance agents, boardwalk carnies, gurus/hucksters, politicians, etc.) start filling people’s heads with misinformation.
October 7th, 2006 at 12:43 am
Ugh, it’s 3:45 am where I am and that comment did read quite as I had hoped. Try this in the second paragraph:
“The world is full of companies trying to sell products, and the information they provide fills in holes left by parents who don’t teach, the lack of independent thinking, and schools that need to focus on other subjects. Schools have other priorities fighting for attention and don’t have the resources to spend time on money management.”
October 7th, 2006 at 10:23 pm
Flexo has it exactly right on the messages we receive from the media and the lack of information from other sources to counter that.
It’s pretty much how I got into debt before too. You should note though that I’m not blaming the spending culture for my actions.. but merely stating that they had a definite influence. The one who made the eventual choice was me, of course.
(which was great, because I realized I can totally have control over the spending, seeing as how it’s my fault).
K: I’m not sure how you interpreted not-so-fast’s comment that way too, but both you and Flexo pointed out something interested to me.. the possible reasons why we dont have mandatory money management courses in school, and the fact that.. even if we do, will the precipitants of the info even care?
Thinking back.. I might have slept through my money management class, if there was such a class anyway.
October 9th, 2006 at 7:01 am
In my high school (1980s) we had a “consumer math” class that was supposed to teach us how money worked, about credit and interest and taxes. But it was only for the kids who did not do well in the regular math classes, so if you failed geometry you’d get bumped down with the dummies to the dreaded consumer math. I took it for one semester after not doing well in a class and I learned a lot more useful info there than in algebra or geometry, or most of my other classes. I don’t understand why they made that class only for the lower levels, like if you passed geometry you should just automatically be able to understand compound interest. I think a class on personal finance could really help people in school. It helped me.
October 9th, 2006 at 6:20 pm
I said it before, and I’ll say it again:
Magnum vectigal est parsimonia.
(”Economy is a great revenue”, for those of you who’ve not kept practsing their Latin! tsk tsk).
Happy saving,
Tully
P.S. some young chap called Elvis asked me to send his regards to your readers, but I think he needs some good old fashioned thinking and a sober Roman haircut.
Tully
—-#
P.P.S. Some folks save it, some folks lend it
but as for me I want to spend it! -Thanks verra much, love Elv.
October 17th, 2006 at 1:37 pm
I don’t disagree that everyone needs to take responsibility for their spending, but the card companies have gotten much worse at helping people along.
I look at my bill and the minimum payment is often about 2% of what I owe. People pay the minimum by default, even if they could pay more of the bill. They just see…”pay this amount now” and do it and don’t think about it again.
We each need personal responibility for our spending but the card companies should acquire some social responsibility rather than digging for bigger profits.
Catch A Gideon