Do you deserve credit?

One of the main complaints that we all have with credit card companies soliciting teenagers is that they don’t deserve credit.  The theory is that they haven’t earned the right to have access to thousands of dollars that they may not be able to repay.  However, how many of us deserve credit?

It wasn’t until the prosperity years of the ’90s that credit became widely available.  Before then, you had to have excellent payment history or lots of cash in the bank to access credit.  Creditors were leery of allowing the common man access to its stash.  This seemed to change when they realized that we are a consumer society.  Studies have consistently shown that Americans spend more than they earn.  It doesn’t take a rocket scientist to figure out that credit keeps us in that flux.  We take no issue with buying a home that we can’t afford, driving a car we can barely maintain or wearing clothes that we never should have bought.  Credit has allowed us to create a lifestyle that may be enviable on the outside but no one realizes the strain that paying these bills puts on our lives which essentially makes us a slave to our jobs.  We can not enjoy the freedom of doing what we want to do rather we are forced to stay at jobs in which we are unhappy or defer our dream job which may not pay as much as we would like because we have so many bills.

Credit alone is not the culprit, instead it is the fact that creditors realized that the people wanting credit didn’t deserve it so they figured out a way to punish them for their selfish desires – interest.  Interest is a complicated beast that can take over a balance and have it whooping your butt before the ink is dry on your purchase.  If you are only paying the minimum payments each month, then you are essentially feeding the beast (interest) and starving the monster (principal).  It may seem that the monster is being held off but the beast is growing and taking over your life.

I have nothing against credit, when used responsibly.  It’s almost like a gun, in the wrong hands it can be deadly.  Credit is actually necessary in our society.  If you want to make a significant purchase, like buying a home or a car, then your lender will want to know how you have handled yourself in the past.  They will be looking for your monster and your beast to be tamed in a nice little cage called “low/zero balance without an extraordinary amount of available credit”.

Every person should have at least once credit card, preferable a universal card like Visa, MasterCard or American Express, for emergencies.  Opening your wallet and displaying a credit card collection like newborn baby pictures is not impressive.  The more accounts you have open the more leery a credit may be about lending to you regardless of their balances.  Imagine you have six cards with $30,000 in available credit and an annual salary of $40,000.  You may only have a total outstanding balance of $4,000 but imagine some traumatic event happening in your life, a creditor’s worst nightmare is that you are going on a $26,000 shopping spree and never be able to repay your debts.

Not many of us deserve credit because we are selfish and materialistic.  Rather than living within our means and using credit cards for emergencies, buying the best house with an affordable mortgage and choosing an economical car; we choose to be slaves. 

Free yourself and pay down your debt so that you can enjoy life.  Having a low or no debt lifestyle allows you to take advantage of jobs that you enjoy, allows you to save extra money for vacations and keeps you from dreading to open you mail.

Living young and fabulous is all about having freedom.  Your money matters – it’s not about how much you make, but how much you keep.

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