We focus so much on "corporate greed" but what about consumer greed?
We have a credit card problem in North America. People say they need credit to buy basics but I know for a fact (experience) a lot of the debt goes to buying needs and not wants. Consumer greed is something we should discuss more. Banks may make credit loose but it's not them that walks into Apple to buy the latest gadget you can't really afford.
Remember: If you have solid cash flow to justify the purchase to pay the bill then by all means...go ahead. If you're in school and don't work and buy furniture for an apartment to rent? That's a tough situation so you'd better go and find a job. If anything to cover the minimum balances and a bit of the principal or else you will sink. If you don't your credit score will be ravaged.
Think about this before you sign on for credit. When I was a teller living at home, they approved me for a $30 000 line of credit. I never used it and when I did, I made sure I saved some money in case I needed to pay it down. An RCL is beautiful because the interest is ridiculously low and you can get away not paying it down for a long time.
You can't with credit because of the criminal interest they charge.
My advice for anyone starting out is to get a job,, prove income, show your stable, and get an RCL. That's the only way to start off on the right foot - that and saving as much as you can where possible, I understand expenses play a role but ask yourself: Which expenses can I take on at this time?
Contemporary faux leaders believe the problem starts elsewhere. They think this because it's an easy target and good for votes.
Personally, I think it starts with the individual. Government intervention and regulation is useless. You can't legislate against greed, ignorance and stupidity. You can't.
There's a fundamental lack of understanding of how credit works in modern society. We're more financially illiterate than we've ever been - but boy we can sure download things!
It doesn't help that the government has all but eliminated "cash business" now that it sticks its coercive, greedy, robbing hands (I love doing that) into the affairs of the economy. I honestly believe the fall in wealth is linked to the demise of cash business.
They control all the purse strings now. And people don't realize it.
The government likes to enslave.
Well written and well thought out. I say that because I agree with much of what you say, not because I am softening you up before I hit you for a loan.
ReplyDeleteI would disagree only about the "criminal interest"... Paying down your credit card is actually quite easy. If you start off doing it and make it a habit. If you pay the credit card bill in full each month, the interest rate is effectively 0% (if you use a credit card which charges interest from date of purchase, stop using it). If you don't pay it off fully each month, you will soon find your "minimum payment" amounting to the same figure you once thought was too high to pay.
Self discipline is all it takes.
I agree. Good point.
ReplyDeleteI don't know why they have to charge so high an interest to begin with.
I know fraud is an expense that adds to it.