I'm going to take a sidestep here in my financial postings to talk about something I feel very strongly about. That would be the used of credit. Let me put it right out on the table. In general, I don't believe in the use of credit. If you can't afford to pay cash for an item then you can't afford the item. (I am not talking houses and cars) Or you spend your cash on unnecessary things so when that emergency comes up you suddenly have to use the credit card because your cash is gone.
If you look to the past it seems to me people's financial stability has gone down over the generations as their reliance on credit has gone up. This can't be a coincidence. When we start buying on credit we start down the path of spending more than we have. And lets be completely clear about one thing. Credit card companies are not your friend. They are not going to look out for your best interests. In fact, most of them are designed to get you sucked in to them for life. If you didn't already know this, that minimum amount due? That nice low number that seems so simple to pay...how nice of them!.....yeah, not so much. Those minimum amounts are designed so that you'll essentially never get your card paid off and they end up making tons of money off of you in the interest you pay.
Credit card companies are notorious for their draconian policies. Read all that fine print some time. That lovely 5% interest card? See what happens if you are one day late on one payment. Suddenly you're paying 29% interest.
Buying things on credit because you can't afford to pay cash is a childish behaviour. Children demand instant gratification. Adults set goals and plan for the things they desire. Its called financial responsibility people. Its a value that has been lost over the last couple generations.
Every person, company, entity you owe money to owns you. Personally I don't want to give up that kind of control of my life. I'm told they get very nasty too if you don't tow their line. Fortunately I've never had to deal with a creditor or debt collector but I know others who have and it ain't pretty. But I'll be writing another post down the road on how to handle those kind of calls.
For now though, think about your use of credit cards. Is what you're doing responsible? And no, you don't need a credit card to reserve a hotel room, rent a car or buy airplane tickets. A debit card will do just fine.
My next financial post will be about the nitty-gritty of how to go about paying off debt.
If you look to the past it seems to me people's financial stability has gone down over the generations as their reliance on credit has gone up. This can't be a coincidence. When we start buying on credit we start down the path of spending more than we have. And lets be completely clear about one thing. Credit card companies are not your friend. They are not going to look out for your best interests. In fact, most of them are designed to get you sucked in to them for life. If you didn't already know this, that minimum amount due? That nice low number that seems so simple to pay...how nice of them!.....yeah, not so much. Those minimum amounts are designed so that you'll essentially never get your card paid off and they end up making tons of money off of you in the interest you pay.
Credit card companies are notorious for their draconian policies. Read all that fine print some time. That lovely 5% interest card? See what happens if you are one day late on one payment. Suddenly you're paying 29% interest.
Buying things on credit because you can't afford to pay cash is a childish behaviour. Children demand instant gratification. Adults set goals and plan for the things they desire. Its called financial responsibility people. Its a value that has been lost over the last couple generations.
Every person, company, entity you owe money to owns you. Personally I don't want to give up that kind of control of my life. I'm told they get very nasty too if you don't tow their line. Fortunately I've never had to deal with a creditor or debt collector but I know others who have and it ain't pretty. But I'll be writing another post down the road on how to handle those kind of calls.
For now though, think about your use of credit cards. Is what you're doing responsible? And no, you don't need a credit card to reserve a hotel room, rent a car or buy airplane tickets. A debit card will do just fine.
My next financial post will be about the nitty-gritty of how to go about paying off debt.
Post a Comment