Post by Rob W. Case on Sept 20, 2008 18:41:17 GMT -6
It is an addiction that millions of Americans face each and every day. It’s an addiction you may be going through right now. It’s an addiction that your friends, neighbors, or relatives might be deep into. It’s an addiction that leads to a point where it may appear as though all hope is lost….and with today’s economy, that sense of hopelessness is even heavier, as people struggle to pay their bills. It’s an addiction that is exploited to make money. That addiction is credit card addiction and it is a classic case.
There are numerous things people say regarding how to get out of it. Borrow money from friends or relatives. Get another job to help pay it off. Put it all on another credit card that has a lower interest rate. Sell old belongings on online auction websites.
Here’s a thought: How about examining the psychological details of what is going on. Many times when people are faced with the reality of what they are actually doing, they may be more inclined to stop doing it. The reason why this point should be considered is because we all go in to anything and everything with the mindset that “that’ll never happen to me.” An alcoholic for example begins his progress to alcoholism by getting drunk a lot, and then doing it again, and doing it again, until it becomes a lifestyle that he simply cannot part with. A smoker starts his/her addiction by smoking with friends, and then gets to a point where he likes the nicotine kick the cigarette brings him, and that kick eventually becomes a “biological necessity,” meaning that he will feel that he cannot go the day without having a cigarette. Credit cards are the same way, and part of the drive that fuels its seduction is that everything is paid on duration of time.
The Process for Which We Purchase Things:
Our normal process for purchasing things goes like this; we see something we like, we pay for it, and we leave the store with our newly purchased item. That item now belongs to us. Credit cards are a different matter entirely. We see something we like, we pay for it, and we leave the store with our newly purchased item. Wait, doesn’t that sound like the first one? Yes, and that is what may be going on subconsciously in your mind when you’re using your credit card. What really happens when you “pay for it” is just present a card that places the item on duration of time. You don’t technically pay for it, but because you used your time duration access pass, you are able to leave the store legally with the item of your choice. You may be thinking to yourself, “What do you mean you don’t ‘technically’ pay for it?” When you use a credit card, you do two things….
1. You swipe your card and you are given a legal clearance to leave the store with the desired item.
2. The total amount for the item(s) you purchased is brushed to the side, only to be paid later.
Number two is the trap. You see, most of the time, the number of the credit card limit one is allowed can be dominant in one’s mind when one uses their credit card. Someone will think, “Oh, I have a $1,500 credit card limit,” and then think of how “way off” reaching that limit is. But things add up fast. When people acquire a credit card, they are more inclined to spend more. They live in the moment and for the moment. What many don’t realize is, once the moment passes, all the debts that have been racked up due to living in the moment are called into account, and must be paid with substance.
The Trap of Impulse Buying:
Too many times, impulse buying leads the individual to be faced with a credit card bill so overwhelming, that they cannot keep up with paying it with substance. As they pay the minimum balance required by the credit card company, the individual tends to get lazy and tacks on more and more bills until, in some cases, those credit cards are maxed out. You see, people get comfortable paying their minimum balance. As long as they can make paying their $200 a month, or whatever the minimum balance is, they don’t care if they tack on another few hundred dollars here and there. As this habit continues, and the credit card company sees that the customer is paying their card on time and at their minimum balance at least, the credit card company will then increase the limit. If you start out with a $1,500 credit limit, and you show that you are consistent in paying your bills month after month, then after a while, they will increase your limit to $3,000. Then so on, and so forth. Depending on the nature of the buyer’s spending habits, the increasing of the limit will encourage further spending habits, which means, of course, more impulse buying. The more impulse buying one does, and the more they pay their bills on time, the higher the limit is raised again. This is of course when one is in a good economy.
When the Economy Goes Bad:
When taxes are raised and further regulations (which require more costs to honor at the business’ expense) are imposed on businesses, the more the economy slows down. Jobs are lost because companies have to compensate for their losses, and still be able to show a profit to attract investors. People then are pressured to tighten their money belts. Part timers (who domestically fall under the category of poor) are faced with practically no hours. The working habits of full-timers (who domestically fall under the category of middle-class) are watched with more scrutiny, and those making more will be tested more by their superiors in hopes to single out names to go on their next list when downsizing is on the horizon. When this happens, those with substantial amounts of credit card debt feel trouble. As they try to make their other bills, their credit card debt looks harder and harder to pay off. If interest rates are raised, and they are paying their credit card bill’s minimum balance, the chunk off their principle seems like nothing. Meanwhile, as the economy gets worse and worse, people feel pressured to open a new credit card account with a much lower interest rate, and tack on their debt to that. Now they have two credit cards to pay off.
All in all, it all snowballs. The best thing to do is to avoid it all together. The next best thing to do, if you need to start a credit card to establish credit, is buy a few things, pay them off when you get your next paycheck, and do it again ever so often to keep the flow of your credit circulating.
There are numerous things people say regarding how to get out of it. Borrow money from friends or relatives. Get another job to help pay it off. Put it all on another credit card that has a lower interest rate. Sell old belongings on online auction websites.
Here’s a thought: How about examining the psychological details of what is going on. Many times when people are faced with the reality of what they are actually doing, they may be more inclined to stop doing it. The reason why this point should be considered is because we all go in to anything and everything with the mindset that “that’ll never happen to me.” An alcoholic for example begins his progress to alcoholism by getting drunk a lot, and then doing it again, and doing it again, until it becomes a lifestyle that he simply cannot part with. A smoker starts his/her addiction by smoking with friends, and then gets to a point where he likes the nicotine kick the cigarette brings him, and that kick eventually becomes a “biological necessity,” meaning that he will feel that he cannot go the day without having a cigarette. Credit cards are the same way, and part of the drive that fuels its seduction is that everything is paid on duration of time.
The Process for Which We Purchase Things:
Our normal process for purchasing things goes like this; we see something we like, we pay for it, and we leave the store with our newly purchased item. That item now belongs to us. Credit cards are a different matter entirely. We see something we like, we pay for it, and we leave the store with our newly purchased item. Wait, doesn’t that sound like the first one? Yes, and that is what may be going on subconsciously in your mind when you’re using your credit card. What really happens when you “pay for it” is just present a card that places the item on duration of time. You don’t technically pay for it, but because you used your time duration access pass, you are able to leave the store legally with the item of your choice. You may be thinking to yourself, “What do you mean you don’t ‘technically’ pay for it?” When you use a credit card, you do two things….
1. You swipe your card and you are given a legal clearance to leave the store with the desired item.
2. The total amount for the item(s) you purchased is brushed to the side, only to be paid later.
Number two is the trap. You see, most of the time, the number of the credit card limit one is allowed can be dominant in one’s mind when one uses their credit card. Someone will think, “Oh, I have a $1,500 credit card limit,” and then think of how “way off” reaching that limit is. But things add up fast. When people acquire a credit card, they are more inclined to spend more. They live in the moment and for the moment. What many don’t realize is, once the moment passes, all the debts that have been racked up due to living in the moment are called into account, and must be paid with substance.
The Trap of Impulse Buying:
Too many times, impulse buying leads the individual to be faced with a credit card bill so overwhelming, that they cannot keep up with paying it with substance. As they pay the minimum balance required by the credit card company, the individual tends to get lazy and tacks on more and more bills until, in some cases, those credit cards are maxed out. You see, people get comfortable paying their minimum balance. As long as they can make paying their $200 a month, or whatever the minimum balance is, they don’t care if they tack on another few hundred dollars here and there. As this habit continues, and the credit card company sees that the customer is paying their card on time and at their minimum balance at least, the credit card company will then increase the limit. If you start out with a $1,500 credit limit, and you show that you are consistent in paying your bills month after month, then after a while, they will increase your limit to $3,000. Then so on, and so forth. Depending on the nature of the buyer’s spending habits, the increasing of the limit will encourage further spending habits, which means, of course, more impulse buying. The more impulse buying one does, and the more they pay their bills on time, the higher the limit is raised again. This is of course when one is in a good economy.
When the Economy Goes Bad:
When taxes are raised and further regulations (which require more costs to honor at the business’ expense) are imposed on businesses, the more the economy slows down. Jobs are lost because companies have to compensate for their losses, and still be able to show a profit to attract investors. People then are pressured to tighten their money belts. Part timers (who domestically fall under the category of poor) are faced with practically no hours. The working habits of full-timers (who domestically fall under the category of middle-class) are watched with more scrutiny, and those making more will be tested more by their superiors in hopes to single out names to go on their next list when downsizing is on the horizon. When this happens, those with substantial amounts of credit card debt feel trouble. As they try to make their other bills, their credit card debt looks harder and harder to pay off. If interest rates are raised, and they are paying their credit card bill’s minimum balance, the chunk off their principle seems like nothing. Meanwhile, as the economy gets worse and worse, people feel pressured to open a new credit card account with a much lower interest rate, and tack on their debt to that. Now they have two credit cards to pay off.
All in all, it all snowballs. The best thing to do is to avoid it all together. The next best thing to do, if you need to start a credit card to establish credit, is buy a few things, pay them off when you get your next paycheck, and do it again ever so often to keep the flow of your credit circulating.