"Any society that would give up a little liberty to gain a little security will deserve neither and lose both." ~ Benjamin Franklin

Now I'm Rude and Judgemental...

>> Sunday, September 14, 2008

I was responding to a comment in my comment form and it got rather long so I thought I would share it here as I think some of my readers might get some use out of it. The comment was left on a post I wrote for an advertiser (which is how I help suppliment my husband's income).

Here is the comment:

I have never been to your blog before, but I have to say this post is
ridiculous. Having a credit card is not an addiction. We have one credit card
that we pay in full every month. It has no fees whatsoever and we get gift cards
every once in a while from the points. We have never, ever had credit card debt.

My in-laws do the same thing only they get frequent flyer miles with
their card and they get to come visit us for FREE because they use that card.
With no fees and no interest because they pay it off every month. That is

That's a pretty rude and judgmental post to suggest that a
credit card is an addiction that you should ideally break.

Now I don't think that anyone who has struggled with debt would argue my point of saying credit cards can be an addiction. Unfortunately the numbers don't lie. A recent Dun and Bradstreet study found that you spend 12-18% more if you use credit cards instead of cash. Also, 60% of credit card users aren't paying off their cards every month, so you are in the minority. (more info here here- Dave can argue the points better than I can).

I'm glad you have not fallen into the credit trap that so many have. But credit cards are an addiction for many- and often one that can lead to the end of marriages and bankruptcy. The Bible says "the borrower is slave (servant) to the lender" (Proverbs 22:7).

A few more numbers to help prove my point about credit addiction (taken from Dave Ramsey's Financial Peace classes):

  • The total American consumer debt is more than $2.7 trillion
  • The average household credit card debt has increased approximately 16% in the past 17 years
  • There are over 1.3 billion credit cards in circulation in America
  • 45% of card holders pay only the minimum balance each month
  • The average balance per credit card holding household is $9300
  • Overall, American households spend over $412 billion in credit card charges per year

So while you may be good with your credit card, the majority of Americans are not. And, with these statistics, I believe that credit card useage could easily qualify as an addiction that should be broken. (And, speaking from experience, is can be a difficult addiction to break.)

Anyone else want to weigh in on this?


Marie 4:32 PM  

Seems like a hard hit for a first time visitor! Obviously doesn't know your story...

This made my jaw drop: "45% of card holders pay only the minimum balance each month." I knew it was bad, but I didn't know how bad! We've always been the pay in full every month type and get annoyed with the offers that come in the mail. The lure of credit is all around us... It's probably counter to our culture to save up and wait to buy something. Yeah, credit is a problem in this country! I think addiction is a fair word for a huge group of card holders. Lenders are counting on that!!

Anonymous 5:24 PM  

I think you were fair in your statement that use of credit can be an addiction. We've had one that gives us airline miles for over 13 years and have travleled all over the world with the miles we've earned. Everything possible goes on the card...gas, groceries, medical bills...everything. BUT I take the time to track our expenses and I check our balances(online)every few days. We have never paid a penny of interest and we certainly don't buy things just to earn miles. You have to be very disciplined to use credit or you can find yourself in trouble. We have a family member who recently woke up to the fact and cut up her credit and debit cards and is working diligently to catch up. We are proud of her for recognizing what she was doing. I think you are right in saying those of us that use credit wisely are in the minority. The credit card companies hate us!

Sally 6:46 PM  

I use my credit cards like Cindy does. Except for 2 months right after we got married, we've always paid our balance in full every month also. We use the cash back to buy gift cards for others or to put back toward our balance.

I save my receipts and balance it to my credit card statement every month (you'd be surprised by the false charges I've caught over the years). I LOVE paying my property taxes on my Discover card and getting back 3% on it...Discover probably hates me, too!

I know we're in the minority with how we handle our credit, and I think your post was right on for most people. It didn't really apply to me, so I just glazed over it when I read it which is what that first-time-visitor should have done.

Anonymous 8:10 PM  

Right after I graduated from college, I had several credit cards. And they were frequently maxed out. I can remember more than one Christmas where I maxed out all of my cards.

I have learned that lesson the hard way. I paid a ton of interest in the past. Now, my credit card balances are paid at the end of the month. Every month. I use a card for large purchases, but I have the money to pay the balance ahead of time.

The Fritz Facts 8:46 PM  

You were more than fair. As someone who maxed out her first credit card ever, I know how much of draw they are, especially when a young adult just gets the power.

We are now working to pay off all kinds of debt, and I am working to show my kids the right way, different than I was did.

Sincerely Iowa 6:16 AM  

I've been there, and yes it is an addiction. Paying the minimum payments on several cards for YEARS... only to sit at Target and call the 800# on the back of the card to see if there's any available credit on it we can use...

You're absolutely right. Thats why we started Dave Ramsey's plan almost 3 years ago. We are done with credit cards now, and its a great feeling!

As for the comment about her parents using frequent flier miles... all it takes is ONE bad thing to happen-- a car accident, a sickness, a loss of employment, and you miss a payment or can't afford to pay the balance off... it's a house of cards. A very flimsy house of cards.

Paula Reece 9:40 AM  

Okay, I would say that the commenter was the one being rude and judgmental. Good for you that you have the discipline and sheer good fortune to be able to pay off your credit cards in full each month. My husband and I are both very educated people--he has a master's degree in mathematics even--and we have found ourselves with way more credit card debt than we ever imagined we'd have. And it's not because we decided to splurge and buy ourselves some new furniture or design clothes. It's just that 13 years of LIFE has happened, and little by little it has added up. We just started FPU and are very excited about the prospect of being DEBT-FREE, but I don't think it's fair to make light of other people's difficulties with debt. Jody, you were right on the money (no pun intended). Banks and financial institutions spend millions and millions of dollars on marketing and advertising, and they are darn good at it. They make it way too easy, and our culture has found ways to justify it. And Jody, I know you personally, and "rude" and "judgmental" are definitely NOT words I would use to describe you!!

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