It is very easy for people to get into debt with credit cards. It really is a little too easy. Why shouldn’t it be? After all, you only need to turn on your TV to get bombarded with all sorts great products and services you can buy with your plastic. These ads really know how to get into people’s heads. They hire some of the smartest marketers in the world after all. Many of these ads show actors and actresses ‘living the good life’ as they enjoy stuff they can’t afford trying to impress people they don’t care about.
Ahh… the perfect consumer paradise. More stuff for the sake of, well, getting more stuff. Make no mistake about it – modern culture is all about defining happiness and personal worth by how much stuff you have and how much stuff you own. It is not just a symbol of wealth, but also a social symbol as well. In this age of 24/7 news and entertainment and thousands of cable channels, consumers are constantly programmed to define their happiness by how much they own. No wonder, most people can’t resist going into debt with credit cards. These media images and cultural programming in general has given them the following warped views of credit cards. To use them to buy luxury items they do not need.
Treating credit like income ‘you’re waiting on’
One of the most common ways people think about credit cards is that these cards contain income they are ‘waiting on.’ In short, you think the money is coming so you use your cards to spend ‘future money’ in the here and now. In the mind, it is not really a loan or debt. It is more like an advance on a salary. What is wrong with this picture? Well, you can drop dead tomorrow. That’s how uncertain life is. If you can go belly up tomorrow what more losing your job or suffering a serious financial setback? Life, after all, is all about uncertainty. Sadly, that’s hardly the impression you get with most consumers who think their credit cards are basically ‘salary or paycheck advance’ cards that deliver instant satisfaction with tomorrow’s income. Well, tomorrow might not come. You can lose your job sooner than you think.
What if you suffer an emergency situation where you need to use a huge sum of cash? Money that you simply have to spend without avoidance. Having to spend that emergency money coupled with your debt, you could quickly go under. These financially unfortunate things happen to people from all walks of life all the time. So avoid being a statistic.
Using credit as income ‘extenders’
Another group of people look at their credit cards as magical devices that ‘extend’ their income. Talk about ridiculous. If you are making minimum wage, you are making minimum wage. No amount of ‘extending’ will make that reality go away. Still, people who think of credit cards as income extenders easily spend money they don’t have because they think credit cards give them extra purchasing power. It never registers with them that there is no ‘extension’ if you have to pay off the ‘extra’ cash with interest.
This mindset is usually helped by the lender granting a credit limit 2 or 3 times the individual’s monthly income. It feels good to know that you are receiving your salary again at the end of the month and that you have 2 months worth of credit in your wallet. No wonder you feel rich. But surely at some point, you will realize that that is an illusion?
Credit cards prey on impulse buys
One of the most evil aspects of modern credit card culture is that they enable impulse buys. This is precisely why many people have a tough time maxing out their credit cards. They easily charge to the credit limit of their cards because they ‘just had to buy’ something. I hate to break it to you, but there is really no such thing as something you ‘just had to buy.’ Savvy retailers also get onto the instalment payments bandwagon. Making products or services that someone cannot afford… affordable.
Unless, of course, we’re talking about a kidney transplant or something crucial like that. Next time, you hear yourself thinking ‘I just have to buy this,’ do yourself a favor and tell yourself to shut up and put the credit card away. Believe me, you’ll thank yourself later. When you get into a situation where I can say “I told you so”, it is already too late.
If you wish to avoid the sad, frustrating, and pathetic cycle of paying your cards’ minimum only to see your balance balloon bigger and bigger, you need to stop the thinking patterns described above. People get into debt with credit cards slowly at first. As they begin to think along the lines outlined above, they get worse and worse. They only realize something’s wrong when it is too late.