Consume_or_Not_to_Consume

Consume or not To Consume' Why some people should not have credit cards. Danneel V. Mitchell ” America’s credit card debt has reached close to $900 billion dollars and has increased at an Average annual rate of almost nine percent over the past ten years” Assistant Professor of Economics and Finance, Monmouth University, West Long Branch, NJ 07764-1898 Journal of Economic Issues (Association for Evolutionary Economics); Jun2007, Vol. 41 Issue 2, p567-574, 8p With these staggering numbers and very little relief in sight, this would be the time to say, Some people do not need credit cards. This has become a serious problem for Americans. The average family has on average six to eight credit cards in a household. Having this much credit can be a bit overwhelming, especially for someone who is not mentally and financially ready for such a huge responsibility. Depending on your salary and credit score, the interest on a card could be anywhere from six to24%. A reason most consumers get into debt is that they are trying to keep up with friends and neighbors and possibly to impress others. What is meant by this is that, when someone you know has purchased a 42 in. screen television and you in turn decide to purchase one, maybe larger. In most cases, you are not thinking of the cost and the interest you will pay for the purchase. At this time you are aware that you are purchasing more than you can afford. It is the American dream to own a home, a nice car and all the comforts of having a comfortable life, but at what cost' “Only in New York would $70 for a haircut be considered a bargain” (excerpt from Save Karyn One Shopaholics Journey to Debt and Back 2007) some people should not have credit cards! Now, one would think that this is a ludicrous amount to pay and some would not. If you are part of the latter, then I am talking to you. Credit cards give some consumers the false notion that they can buy and afford anything and not worry about the price. It is a rude awakening when the statements began to come in, and not to mention the extra money you are going to pay if are only paying the minimum. If you are spending more than you make you should not only stop using the card, you should destroy it and bury it. Credit card holders are seeking credit counseling, consolidation loans and filing bankruptcy at astronomical rates. Before you think that this is a war against owning a credit card, it is not. Credit can be very beneficial. It helps you build credit and you can purchase large ticket items with the knowing that you can pay it off in a reasonable amount of time. Whether you know it or not, a purchasing history tells a lot about what type of consumer you are. A card holder between the ages of 19- 28 accumulates over $20,000.00 dollar worth of debt yearly. This does not include student loans. With this type of irresponsibility and careless spending can result in poor credit ratings, Becoming overwhelmed, stressed and eventually bankrupt if the situation is taken under control. College is expected to cost money and unexpected expenses. Students are given cards by their parents For emergencies and unforeseen extra charges like, books , lab fees, gas, and food. Without being educated in the importance of responsible spending, a substantial amount of debt will become a subject a student will surely fail. I am not saying that everyone should be banned from credit cards. This idea is just simply unrealistic. There are consumers who understand the importance of having a credit card and display responsible spending habits. They make sound purchases knowing that they can afford to pay off the debt in a reasonable amount of time. A responsible consumer knows when they can or cannot make certain purchases. After my first year of college, I got an influx of credit card offers. I was on top of the world. I figured I could get all the little extras I needed for school and not have to bug my parents about sending cash when needed. Well a year and a half later I was in so much debt that I had to drop out of college in order to pay the debt off. With all of the consuming credit debt, I forgot that I was still responsible for the student loans I had taken out. Education was not a factor in this case. My parents explained and educated. I, as an individual was just not ready to have that sort of responsibility. It shows maturity when you have accepted the truth about money, credit and saving. You must realize that you cannot spend more than you make. Making a plan or budget for your incoming and outgoing finances. In this way you will know without a doubt what you can afford without putting yourself in a financial bind. In my spiral of spending happiness, it did not occur to me that my spending , late payment and eventually non payments would affect my credit ratings and credibility. It was long time before I was able to repair my credit and as a lesson learned, my parents did not help me pay off the debt. In conclusion, it is an honor and a privledge to acquire credit. Having credit just doesn’t give you the ability to purchase nice items, it also tell the world about who you are.