Wednesday, May 20, 2009

Credit Cards…The New Cigarette

There was a time where almost half of the country smoked cigarettes.  It was a cheap habit and socially acceptable.  Smokers could light up anywhere.  Favorite radio and TV shows were sponsored by Chesterfield and Lucky Strike and everybody in the movies had a cigarette dangling from their mouth.  Smoking became a way of life for millions of addicted Americans who couldn’t face the day without. 

It’s much different today.  How did something that was once so cool become so isolating?  I say it was education.  Once people understood that they were slowing killing themselves, that they had a higher risk of heart disease and cancer, then the only difficulty was to break the addiction.  The more people quit, the more they decided that they didn’t want to be around smokers in general, and the rest is history.  

Today, this country has a new addiction.  Easy credit.  It’s one of the reasons the economy is in the shape that it is.  We all know the drill:

Hello, I’m Credit Card Company X with an exciting offer.  I want to give you a card that is worth $7,500.  You can use it everywhere to buy anything you want.  The best part is that you don’t have to pay us back right away.  Please, by all means, pay the minimum balance.  To sweeten the deal, we will give you 0% interest on the first year!  Don’t worry about what your interest rate will be after that year (we challenge you to find it).  More importantly, spend to your hearts content!

Well, we did.  We spent and spent and then the bill came due.  All of the sudden, that minimum payment was as much as the rent.  People had to decide if they were going to eat or pay the credit card bill.  Unfortunately, they’d pay the credit card bill and go buy groceries using the credit card.  What was once used on luxuries is now being used on necessities.  I know you’ve heard this horror story before.  It may not have happened to you specifically, but you might know somebody that fits this description.  Like cigarettes back in the day, almost everybody is doing it.

Enter the United States Senate, who passed a bill that will stop credit card companies from taking advantage of their customers.  Gone are the days of exorbitant fees and unreadable fine print.  Finally, some fairness for the common man, right?  Not exactly.  First, the one part of this bill that would have given it teeth, an interest rate cap, was voted down.  Second, there is talk that the card companies will make up for lost revenues by charging annual fees as well as starting the interest meter at the moment of purchase.  Therefore, look for a colorful, easy to read letter from your credit card company explaining an interest rate hike, new terms for calculating interest, and a brand new annual fee.

There were a lot of good reasons to quit smoking.  It was just a matter of educating the public and changing the perception.  In the end, it was about our health.  In that sense, the credit card problem is exactly the same thing.  Credit cards can be an extremely useful tool, if used wisely.  Sadly, most of us don’t use them wisely, and the legal loan sharks take advantage.  Until we change our ways, they will continue taking advantage.  As long as they get rich on our interest, they will have the money and influence to get what they want out of Congress.  Congress would have you believe they passed sweeping reform, coming to the aid of the consumer.  Don’t you believe it. 

In the meantime, let’s all get our financial health in order.  Smokers were slaves to cigarettes and they quit.  Let’s stop being slaves to the credit card companies and kick the habit.


  1. this is a wonderful post-- and soooo true. I used to be a two pack a day smoker-- quitting was hell....never got hooked on credit( I even have a hard time watching my two dollars go around a racetrack) but I think that our consumerist society over the last two decades has had all the earmarks of true addiction-- maybe the whole country needs Rehab :-)

  2. Thank you so very much and congratulations for keeping your credit at bay!

    I sincerely hope that we can get to the next generation to think about credit cards like they got to mine with cigarettes. This country would do well do work within their means.