I watched the faces around the room as they listened to someone recount what they did on the day they got their first credit card. Heads nodded as the speaker said they decided to carry it around with them in case there was an "emergency" that came up while they were out and about. Thousands of dollars later...
Many of us are familiar with this story for we did the exact same thing. We weren't going to spend it on frivolous things. Oh no, not us. This was for "An Emergency". Have you ever noticed that once you get that "emergency fund" in your pocket it seems to attract "emergencies"? There are people who live month to month on credit. At the end of the month, they have no cash because it all had to go to pay off their credit card so they must start charging their account all over again.
I have heard people brag about how many "points" they get or how much "cash back" they get. Do we really think credit card companies are stupid? They know that most people will eventually end up carrying a balance on their credit card. As for those of you who say you have enough "discipline" to avoid that trap... well... you need to remember this. Your life can change in a moment. Many a person has suddenly had the ground shaken beneath them in the form of job loss, injury, illness, the death of a spouse, the plunging of the stock market and so forth.
Are you prepared to have your income cut an average of 40% if you end up on long term disability? That's what most long term disability insurance pays. It covers only 60% of your lost income. I had a friend who paid extra to get 80% coverage. After they suffered an accident which crushed both their legs they discovered that wasn't quite exactly what they got as there was a "cap" on how much that 80% could be. Sigh...they ended up with still getting just over 60%. Contrary to what we may think, insurance companies aren't stupid either.
The unexpected happens just like it always does. So, you whip out your little plastic emergency fund, thanking God that you have it. Wait a minute... am I the only one here who sees something wrong with this picture? God's provision is a small plastic card stamped with VISA, Mastercard, Discover or American Express and you must pay it back in full within 30 days or you will be charged interest and fees?
So true!! I remember those early days...probably still paying for some of those early days come to think about it. VERY GOOD INFO... thanks for sharing! It is a false security and so very addictive.
Been there, done that, got the teeshirt! It is amazing what we can create within our minds to justify one of those little bits of plastic. I have noticed the 'not so subtle' changes is the New Zealand economy over the years as we have gone from 'layby' (lay away?) to 'buy now, pay later'. Then of course there are the money lenders. It is really scary stuff if you get sucked in. Looking to God for all our needs (note, I did not say 'Wants!') Great blog K
It occurred to me after I wrote this that someone might mention that this is why people have "credit card insurance". While that might make sense, it is important to remember that credit card companies are in business to make money as opposed to being a kind and generous entity to bail you out when you get hurt or lose your job. That... is God who does that!
If you don't believe me, then please check out this story done by [url=http://abcnews.go.com/Business/credit-card-insurance-plans/story?id=17293652]ABC News[/url] back in September. You can easily find other similar tales and perhaps have heard some horror stories of their own.
Back when I was about to go through cancer treatment, I got this call from a major US bank. Due to the timeliness of their call, I can only assume they got my name when I registered on some cancer-related sites. They wanted to "help" with a same-day cash advance which I foolishly decided might come in handy in the event of an "emergency" since I was just about to start a medical leave of absence. Almost five years later... we paid it off. They gave me a "deal" back then but quickly pulled the carpet out from under us.
I am going to be celebrating the paying off of yet another debt in a couple of weeks and to tell you the truth, I do not miss credit cards in the least. It is a personal choice which we all must make for ourselves but I have never regretted it.