Wednesday, May 11, 2011

Credit Card Fantasyland

Oh, this is scary. I heard an interview on NPR the other day in which the financial expert said she met a girl who couldn’t wait to get a credit card. Turned out the girl did not know that you have to pay back the money you spend when you buy on credit. Seriously, this was a teenager, not a five-year-old, and she did not understand the basic concept of credit.

Every time I watch one of those “we’re up to our eyeballs in debt” shows on CNBC, I get the creepy feeling that these people think the same way. They may say they want to pay off their debts, but you can see the self-will oozing out of them as they proudly admit to their insane spending habits. These usually consist of constant shopping sprees and the accumulation of vast piles of stuff, although sometimes as a change of pace it’s eating out and ATM advances. These people simply do not understand that credit is only a means of delaying paying. It’s not free money. Even creepier, the CNBC shows are about Canadians. They’re been infected by the same spending virus we have. More than one society has bought into the entitlement fantasy of materialistic accumulation via credit.

An entitlement fantasy is just that, a fantasy. We’ve all had them. They’re the daydreams in which we inherit a fortune from a relative we never met. Guilt-free money, because we didn’t even have to go to the funeral. Or we win the lottery. Effort-free money, because we didn’t have to do anything other than purchase a ticket and pose for a winner’s photo with that giant check. Most of us are aware these are fantasies. Apparently, some people are living with these fantasies as real scenarios in their heads. They live as if money grows on trees because credit cards allow them to pretend their fantasies are real. For a while. When they don't make their payments, they qualify for the new penalty APR of 29.99% that Fidelity Mastercard just instituted. Do all these crazy spenders really want to pay almost one third of the purchase price of every transaction to the bank? No. In their heart of hearts, our materialistic spenders don’t intend to pay the bank at all. Scary.

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