Years ago we were all suckered into the game called ‘buy now, pay later.’ If we followed the rules and had what the bank called good credit, we would no longer be required, like our parents had been, to sweat and save up our money in order to buy that item. Now we just signed on the bottom line and took it home with us.
“Whoopee! Far out! I can get me a new car today!” . . . and away we went, diving head first into the slave masters back pocket. We never even realized how ignorant that was because we were so pumped about the “stuff” he allowed us to buy on his credit.
Last time I looked at a credit card the interest rate was 29.99% if you defaulted and missed a payment. Now this sorta thing would have made Tony Soprano blush, but not the bankers. Hell no, it’s all good business to them, and by the way, you were forewarned . . . right?
Didn’t you remember to read that itsy bitsy print on the brochure? Or were you just too excited to get your paws on that new wide screen TV to bother? Old grandpa would be rolling over in his grave right now if he knew.
The system is rigged because of the interest the bank charges us, not because it loans us money. The whole thing could work pretty good for everybody involved if it were done on the up and up, but it isn’t, it’s a loser bet, more so that a Vegas slot machine.
Well now is the time to get smart and get out of debt anyway you can. I did it by selling out and downscaling. It was easy for me to do because I didn’t use credit cards much to begin with. I had one and paid it off before the month was out. That is smart, it helps you out at times and still keeps you ahead of the game.
From the web:
Credit Card Usage Statistics
Americans are addicted to the convenience of shopping with credit cards. Today 74.9% of all households have a credit card, 46.2% of all families carries a credit balance. The average household has $7,000-8,000 in credit card debt and pays 14.29% of disposable income for consumer debt payments. This debt is dragging down the household savings rate. As long as we only pay the minimum payment and continue to charge, we will never get out of debt.
Here is an example showing how interest rates affect your credit card payment. $8,000 balance. $200 minimum payment.
360 months to pay off
Pay $11,615.32 in interest
218 months to pay off
Pay $3,345.20 in interest
The average household credit card debt in the U.S. doesn’t matter. What does matter is YOUR credit card debt and your ability to pay it off. In the days ahead that pretty much, on its own, makes you a winner or a loser when it comes to the highly touted credit rating system.
You might get this message one of these days . . . “Warning! We’re gonna ruin your credit rating!”
You might say, “Go ahead, who gives a shit. That may be just what it takes for me to wizen up and jump off your rat wheel.”
But if you do that they can also lean your house, and attach your wages, and a bunch of other stuff I don’t even know about.
The smart answer: Research it, talk to them, kiss their ass, do the best you can do to get the things paid off. Then BURN the suckers and start saving like Grandma did. You might just save your house and your sanity, even if you do have to wait on purchasing the newest computer.
Saving up for something is GOOD for you!