The Debting of America

America is being courted and seduced into debt. Using credit is presented as a good thing, sometimes even like a special priviledge. Recently I began keeping in a stack all the enticements to use credit that I received in the mail. Before six months had passed, the stack had grown to be a foot high. I was amazed at how quickly it grew. They are trying hard to seduce you and me into debt.

Make sure you do not miss the real message here. Compound interest is big business. They, the banks, mortgage companies, credit card companies, and the department stores, all are trying very hard to entice us into using credit and going into debt. Direct mail is expensive. Can you imagine the amount of money that is spent to send you and everyone else those credit card invitations? Just how do you think they are paying for it? If you succumb, you are paying for it out of your hard earned income.

Just think what could happen if you kept that money for yourself and used it to compile compound interest belonging to you. Visit a wealth calculator if you are curious.

They entice you into using credit with 10% off today's purchase if you apply for our credit card, easy pay, and low or no interest for 6 months. What they do not tell you is that if you are late on a payment they will jack your interest up as high as 24%. And they will tack on healthy late fees. If you are late on other payments to other people, they can, and most likely will, increase your interest percentage. Soon, you have lost more than any benefit you may have derived from the original offer.

If you are very anal about paying your bills on time and are never, ever late with a payment, maybe, just maybe, you can escape the trap. However, you will still pay interest on that purchase for longer than you think if you make minimum monthly payments until the debt is paid off. Many people actually never pay off the debt because they add more credit purchases to the account. They took the bait and are now hooked.

I do not recommend the use of credit cards. If you must use one, only use it if you intend to pay off the balance in full when the bill comes and before the due date. They are giving you less time now between when you receive the bill and when the payment is due. Plan ahead to pay the account so you will have the money available. Carefully read your statement and notice due dates. Gone are the times of the due date being the same day each month. They also have a cut off point on the due date. If your payment is processed one minute past that cut off time, you will be charged a late fee.

My favorite credit card alternative is a VISA check card linked to my primary checking account. It acts like a credit card, but I am spending my money. I could elect to charge myself interest. Then I would be funding and benefiting from my own credit card. I do notice that it is easy to swipe that card. It is a little harder to let go of the actual cash I rarely have in my purse. Cash is king folks, and the very best option is to make purchases with cash. This reminds me of another story for another day.

The bottom line, if you have to use credit to buy it, you cannot afford it and should not buy it. Wait until you have saved up enough money to pay for it. Look for more to come about how to handle those emergencies that are sure to present themselves.

Just say no to debt.

Written by Sandy M. Davidson, The Debt Coach, helping you be debt free.