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Credit Cards--- They're Just Like Drugs

Credit cards offer short term pleasure and long term pain.

Credit cards are just like drugs. There is no better analogy. They offer short term pleasure and long term pain. They give the illusion of having more money than you actually do. Then you live with less because each month a portion of your income is siphoned away paying past credit debt.

In 1995 the total credit card debt was $195.2 billion (up $30 billion from June 1994) The average balance was $1825 (up $75/card from the year before). A director of Bankcardhoder Services that year said it would take a consumer making the minimum payment of $36 per month more than 22 years to pay off the debt and interest. By June 1996 the average balance had sky rocketed to $3900 and in December, the total debt had jumped to $400 billion. Since then, the growth rate has not stopped!

Credit is positioned like a foundation of life, so that we use it, and use it, and use it until we literally cannot survive without it.

Creditors are not doing you any favors by extending you credit. They are getting you hooked and draining off your future wealth--- future money that you can't even guarantee is going to be there. Why? Can you guarantee you will have your job tomorrow, next week, next year, in 10 years? But you are promising it away just the same.

Creditors are not giving you anything. They're not adding one penny into your life. Consider this: Creditors do not make a penny until you go into debt. Therefore, do you really think they hope to contribute to your future wealth or do you think they just might prefer that you are horribly irresponsible and charge everything you see? They want you in debt and the deeper the better!

And just as you think you are smart enough to climb out of your credit entanglement, your friendly credit card executives are figuring more and better ways to offer convenience to entice you to use your card even more. For example:

  • Have you noticed how many fast food places now take credit cards? Now there is a conflict in terms, “fast food” and “credit card”... hhhmmmm.
  • Did you know taxi cabs and parking lots now take credit cards? I sure hope it's a deductible expense. The compound interest it generates, of course, is not.
  • Movie theaters now report 25% of payment is by credit card.
  • The other day I saw a young man at a grocery store paying for 5 candy bars with a credit card. Talk about short term pleasure and long term pain. That has got to be a prize winner.
  • IRS now takes credit cards--- a double whammy!
  • Many mortuaries now take credit cards. Why does that sound strange and why is it a fitting last example?

The fact is, credit card executives now know that most credit worthy people already have 2+ cards. But they still send out 2.5 billion solicitations annually and the average household receives nearly 2 dozen per year.

Still, finding innovative ways to increase credit debt is their primary solution to increase profit. As a bank card executive reported, "We will break down the barriers of debt." If that doesn’t sound like drug dealing I don’t know what does.

Until we learn to shut off the wealth sucking valves, we will continue to drown in a sea of debt. Until we stop creating new debt with the convenience of a credit card, we will continue the strangle hold of our creditors. Until we start operating on a cash basis, we are doomed to a life of debt.

Our future and the future of our family is at stake. And until we make a decision in favor of ourselves instead of the credit card industry, we will foolishly squander our future by living in an illusionary world and paying its price--- just like an addict.

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