In my opinion, one of the dirtiest four letter words in the English language is ‘debt’. It is both insidious and deadly. However, an even more dangerous phrase could be ‘credit score’ or ‘credit ranking’ or credit rating’. Let me explain what I mean:
In order to qualify for any big ticket item, whether it be a big screen TV, new car, or the biggest ticket item of them all, a new home, it takes a high credit number in order to qualify for credit to then obtain that bright shiny object. And, once this is established, you can now sign on the dotted line for that shiny new bauble.
Interestingly enough, in order to establish a high credit score in the first place, you must have already had some debt incurred that was paid back in a timely manner. This is akin to the individual that has difficulty landing a job because they have no previous experience. The outcry goes something like this: “How can I get any experience if I can’t get the job to then get the experience necessary to then get the job?!”
The usual manner in which both are accomplished is by getting someone else to vouch for us, either in the form of co-signing for the loan or putting in a good word for the job. That person is usually someone who has been able to establish a high credit ranking or has an inside track to the person doing the hiring. And, this is pretty much how it goes.
Now, as to the title of today’s posting.
There is a story that goes something like this:
A mother and daughter were shopping at the local mall and, as is often the case, whenever a purchase was made, mom would slap down the credit card and charge the purchase. At the end of their shopping, as they were leaving the mall, a representative of the mall handed the daughter a sucker as a ‘thank you’ for shopping with them.
At that point, the mother looked at the daughter and asked “now, what do you say?” To which the daughter looked up at the representative and said “charge it!”
This mindset has had great success making great inroads into the very fiber of our society today. Most everything we purchase is increasingly paid for with a little piece of plastic called a credit or debit card. The prevailing thought is, once we receive the bill for purchases made with those cards, we will pay them. In full.
However, as is often the case, we tend to forget we made some of those purchases until the bill arrives and, as such, we aren’t always able to pay them in full. The money we thought we would have on hand to pay that bill in full has gone elsewhere.
And, this is where the credit card companies hope we will be, because this is where they make their money. By not paying them in full each month, there is a fee attached commonly known as an interest rate.
On a grander scale, this is what we have generally accepted when it comes to a car loan or a home mortgage. It is a given that we will be paying interest on those loans in order to ‘have it now’. And, after all, who can blame us? It’s not like we have several hundred thousands of dollars just lying around, right!?
Unfortunately, many today have dumbed down that thought pattern to include interest charges on credit card purchases to just be part of doing business in order to ‘have it now’ these days. They think nothing of incurring additional debt in the name of instant gratification.
And, that is what brings me to the point of this whole posting.
The following link is to an article written by Marco Rubio, addressing the government’s most recent request to raise the national debt ceiling yet again, all in the name of ‘saving the economy’. This prevailing thought in Washington D.C. is best explained by our own Vice President, Joe Biden, when he went on record as saying that we as a nation must go further into debt in order to get out of debt!
http://online.wsj.com/article/SB10001424052748704425804576220670543010068.html?mod=googlenews_wsj
Unless we quickly change our thinking when it comes to debt, both as a people and as a government, it is likely that many more in the coming years will, out of necessity, purchase even the necessities such as food, clothing and gas, by repeating what that daughter at the mall said: “Charge it”. And, that being the case, the likelihood of ever escaping the claws of debt will become ever dimmer.
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