I remember when I was young, my parents had credit cards, but they rarely used them. I never really asked them why, but my guess would be it was because they viewed Credit Cards as something you used in an emergency or so that you didn’t have to carry large amounts of cash. My parents rarely bought things on impulse, so the Credit Card wasn’t a burden, it was a monthly payment and that was about it.
Fast forward to today, when I think I have in my possession over 10 different “credit cards” of varying types and sizes. I really only use 1 consistently, and that is because I like their rewards program, but I rarely ever have cash on me. I buy most things on the credit card and then pay it off (which makes for a very thick monthly statement, I admit), but my rationalization is that I would have spent the money any how, so getting the rewards from the credit card is an added plus.
However, since the credit card is part of my psyche (as it were) I am very guilty of “impulse buying” and not being careful enough with my spending. I longingly look in the Best Buy and Future Shop flyers at DVRs and big screen TV’s (like I deserve them), and I am sure somewhere along the way I will buy one of these, when maybe in my parents time, that type of luxury would have been not even thought about.
What brings on this philosophical bend for today’s article? Not sure really, but given that carrying cash seems to be passe, maybe it’s time to start doing that, because the amount of credit debt the typical consumer carries these days, what will happen when interest rates finally do take off?
The Medium Is the Message. Or, have credit card, will travel. With cash, people were much more attuned to how much they were spending; they had to hand over the cash.
To answer the question you pose at the end, a lot of people are going to be crushed into dust. The average American has something like $9000 in credit debt at a given time.
Even at low interest rates, I know people who are barely keeping their head above water by paying off minimum balances. When they miss a payment, their credit rating takes a hit, and then their minimum payments consist of even higher interest.
I used to be careless, but some hard knocks wised me up. A fool and his debt are soon compounded.
Credit cards are temptations and makes you spend on items which you would have avoided. But still as you say, can we escape it?