Thursday, September 20, 2007

The Evil Empire

Credit card companies are relentless. I called mine last week (not the image above, in case you were wondering. However, I find the name of this card to be ironic... Chase Freedom. Credit Cards are anything but freedom. This is the closest thing to slapping a dead weight on your ankle and throwing yourself overboard.) to ask about car insurance. Since we were renting cars to go to New Hampshire I wanted to know what my coverage was like with this magnificent card I have. The woman on the other side of the call was very pleasant and helpful providing the exact information that I wanted. But before I hung up, she had to give me the latest offer recitation, which had something to do with credit card insurance. Essentially, you would pay a percentage for every $100 on your balance every month to protect you in case of emergency... loss of job, etc. It would ensure that you were not required to pay the minimum balance. Well, in doing a little calculation on my own based on someone who had a few thousand dollars on their card, and this little luxury addition doesn't really add up... or rather it does. In fact, my co-worker Jen and I discovered that some people would probably be paying twice the amount of their minimum balance to protect themselves "just in case." It seems to me that they would be better off just paying double on the balance and getting rid of it altogether. As if people weren't in enough debt.

I was reading a book called "All Your Worth" about how to save and use your money wisely. It was actually quite practical and useful, and I thought that the majority of the American population should be reading this book, including the government. If it works for the ordinary man, it should work for the national government. Anyway, the authors were talking about the amount of credit card debt this country is floundering under. In fact, much of the book was dedicated to making a financial plan that would get you out of such a debt and start preparing for the future. Luckily, that part didn't really apply to me as I do not carry a balance on my credit card. It kind of frightens me how many people carry a balance on their card and how much that balance is. I am grateful for parents who taught me to be financially responsible.

But credit card companies don't really care if you pay off your bill every month. In fact, they prefer that you don't because they can slap on interest rates and other miscellaneous fees, which is where they make their millions. It's not surprising that they would infiltrate college campuses and send recent graduates offers in the mail on a weekly basis. It's no surprise that they entice the over-spending public with enticing offers such as 0% interest on balance transfers, rewards and points, cash back and low introductory rates. I admit that I have been succored into some of these offers, but in the end... it's still a credit card, which means it isn't real money.

I don't think it's bad to have a credit card to build credit and use to buy plane tickets and other such large purchases, but if you can't afford to pay for it right now, then perhaps you shouldn't bother buying it. The reality is that you might think that buying some item because it's on sale and it's a super good deal is a good idea, but you might not think so when you put it on your card and take 10 years to pay it back... you will find that you just spent $1200 for an item that was only worth $150. So many people get in trouble one purchase at a time not realizing how quickly they are digging a never ending pit for themselves. It kind of disgusts me that credit card companies target college kids and young people who probably don't have the funds or discipline to handle having a credit card (this is a gross generalization, and I have no intention of offending anyone). And then they send these offers to me in the mail at least once a week. It's relentless and insane and a waste of their money because I just rip them up and throw them away. They should feel bad about the effect all this superfluous printing is having on our environment. Cameron and I talked about writing RETURN TO SENDER on them. Perhaps it is time to put an end to the evil empire.

1 comment:

Nicole Cave said...

We honestly never use a credit card unless we are going out of town and we know that we can pay it off. I simply hate them!!