How You Were Enticed With Credit Card Debt
By Sandy Morris on Jan 1, 2009 in Wealth-N-Retirement
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The Enticing Trap Of Credit Card Debt Comes Quietly In The Mail, With Online Approvals and Instant Access Accounts
As today’s society lives with the “I have got to have it now” psychology the credit card companies are all to happy to help provide it now for their reward later of higher interest and minimum payment amounts that will out live you.
It has never been easier for people to live well beyond their means than it is today. Credit has been easy to obtain, and in a society obsessed with material gain, credit is sought and used on a basis that is so regular even financial watchdogs are beginning to sound warning bells. The average savings for the United States and Canada over the next few years have actually gone into the negative figures, as more people purchase what they cannot afford. We have been gradually enticed to live beyond our means until we have reached the alternative. The dreaded “over extended” lifestyle. No longer are we conditioned to save to purchase a new car or home by using money we have saved. We have become conditioned to the “0″ down, no money out of pocket scenarios.
One of the main contributors to this phenomenon is the credit card. Credit cards are very easy to obtain, and most people get them thinking they will be handy in an emergency. This is the case, but what the credit card companies know is that it will not be long before you use that piece of plastic to make a purchase that is certainly not in an emergency situation.
One way that credit cards have succeeded in getting a flood of people to spend beyond their means is to make credit cards available everywhere. The rise of the Internet has fueled a massive increase in the use of credit cards, as it is often the sole means people have to make an online purchase. Anytime you make a credit card purchase, however, there is the chance that you will forget about it. Statements that come out once a month are a great way for credit card companies to make sure their customers rack up the bills to the point where they will not be able to pay them all off in one shot, and thus gain the hefty interest.
Credit card companies also use promotional gimmicks to entice customers to charge all of their purchases on their cards. Most credit card companies have teamed up with auto dealers or some other company in order to give customers points towards future purchases. People can be so tempted by this that they place all their purchases in the Visa in the hopes of getting a prize. The prize, however, is rarer than winning the lottery.
Staying out of credit card debt requires using that piece of plastic frugally. If you dont have the money in the bank to make the purchase, do not do so with your credit card – it will only cost you more money in the end. If you do encounter an emergency and have to make a payment on your card, pay it off as soon as possible. If you can’t do this, look into getting a line of credit from the bank. This may seem like stealing from Peter to pay Paul, but banks often offer a lower interest rate than a credit card, and the advantage of a line of credit is that banks automatically deduct an amount every month out of your other accounts toward your debt.
Credit card companies are just as happy to have that debt grow and grow. These companies know that you will eventually need another credit card and another and another. Where will it end? Good question. There is no push in Congress to help control those same credit card companies because generally they are tied closely to the largest banks in the world. With that comes power over politics.
However, you are beginning to see the turning tide as this article is written. People have begun to shy away from purchases that rely on credit extension but those people are by in large a small amount of the population. Some of their incentives have been the reduction of credit by those same credit card companies brought about by the struggling economy. While others have simply woken up to the fact that a minimum payment will NEVER pay off that credit card.
What can you do to change your credit card ways…? Stay tuned for helpful solutions to a mounting debt problem.
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