Being Aware of the Credit Trap

Chris Pirillo has been blogging about credit a lot recently, and his most recent post got me really riled up. Because America has a serious credit problem.

I spent $180 at Target the other day on stuff for the new apartment. As I was checking out, the woman scanning my purchases offered me $15 off to sign up for an in-store credit card.

“No thanks,” I said. “Fifteen dollars now, hundreds in interest payments later.”

She was flabbergasted. I don’t think she’d been turned down on the card offer very frequently. And that’s not the only indication I’ve seen that credit is rapidly becoming a real problem in America. It seems like every commercial break on the radio or television, there’s a commercial for consumer debt counseling. It’s starting to seem as if everywhere we turn, Americans are grabbing more and more credit in order to purchase a lifestyle they want but cannot afford.

I hear commercials every day offering Americans the opportunity to finance everything from televisions to cars to furniture. But as far as I’m concerned, the only two things you should ever finance long-term are a house and an education. If you can’t afford a nice new car out of pocket, maybe you should get a nice used one instead. If you can’t afford a nice, new television maybe you should stick with your old set or buy one used on Craigslist.

Financing seems easy, and it’s very easy to get into the habit of using in-store credit to buy things. But imagine the absolute hell of getting used to a fabulous lifestyle and then having it ripped away from you because you can’t pay your bills. There’s nothing worse than having something you love and not being able to keep it. It’s better to not even start the cycle.