Credit is Not the Enemy, You Are!

Food. Cars. Medicine. Power Tools. Information. Credit.

What do they all have in common?

Which one doesn’t belong with the others?

Why does that one not follow the same rules as the others?

you got yourself into debt

Sometimes you just need to look in the mirror to see who the real cause of your problems is.

They are all tools, and at first glance, it would appear that credit has nothing to do with the others.

But, indirectly they all have something very important in common with credit: responsibility. Each one of those things mentioned, used responsibly can be of great benefit, but once the line is crossed toward irresponsibility, irreparable damage may occur. The same may be said of misusing credit, which like the previously mentioned items, can be a very powerful tool if used properly. However, people need to stop placing the blame on others, including credit issuers, and recognize that they are their own worst enemy.

There are people who believe credit to be an evil concept that should be avoided at all costs, claiming that living a cash-only lifestyle is the best way to live. They claim that credit issuers are predators, extending lines to unworthy or uneducated consumers knowing that they will misuse and abuse it, leading to difficulty in paying bills and accumulating interest charges that will take years to pay off (if at all).

Can’t the same thing be said of food as well–any kind of food, not just fast food mind you? If you overeat and do not have the discipline to exercise, you will gain weight in the form of fat that will take years to work off (again, if at all).

How about prescriptions drugs? Heck, even over-the-counter medication can be addictive. If you are not disciplined and impatient with the time it takes for medication to begin working and take more than the prescribed amount, you run the risk of becoming addicted or dependent on the medication. In the case of impatience, you can simply overdose by taking too much in a given time frame, and end up in the ER or worse.

Knowledge and information? If you discover information about someone that others are not supposed to know, and tell them, you run the risk of ruining a part of their life. Better yet, if you receive inside information about a company, such as the more recent cases involving media mogul Martha Stewart or Dallas Mavericks owner Mark Cuban, and use it for your own gain, you run the risk of federal sanctions or jail time.

Then there are cars and power tools: cars can get you from point A to point B and all points in between faster than walking and power tools can reduce the amount of time it takes to build/repair something. If you use either of them carelessly, you not only take the chance of hurting yourself or others, but ending a live as well.

None of these things come with a babysitter to make sure you use them the right way. Neither does credit, yet somehow credit is the only thing that draws the ire of consumers to the point of fervent animosity.

No one lashes out at car manufacturers when someone causes a crash or drives drunk and hurts others.

No one–professional or do it yourself rookie–sues Makita or DeWalt when they cut a finger off or their project doesn’t come out right due to their own incompetence.

No one calls for regulations against Hostess or Arnold because the bread they make has carbs and the people can’t stop eating it leading to weight gain (warning-don’t even get me started on fast food lawsuits).

No one sues Bayer for what happens when it is abused or misused.

All of these items carry warnings and directions, as does credit (in the form of the disclosure). Regardless of the language of the legal terms, the important parts are clearly marked and very easy to understand–you need to pay that money back, and withing a certain time period or you will be penalized in the form of interest and late fees.

It only seems that people are conveniently stupid when it comes to following the directions and warnings associated with credit, then bitch and moan and point the finger elsewhere.

Simply put, credit, like many other things in life, takes knowledge and discipline to get the most out of it:

Eating helps keep you healthy, but eat too much and you can get fat.

Drugs can help you to overcome illness, but abuse them and you may get addicted.

Information can help you get a better job or create something of benefit, but used in the wrong way can cost you friends or even land you in jail.

Cars and power tools allow us to be more productive with our time, but used recklessly can kill.

And credit can help you to reach your financial goals, but abused can cause you to lose your car, home, and in some cases even your family.

Credit is a tool, a means to an end. Without it, business would not be able to expand and grow, much less get started. Governments would not be able to operate at their fullest capacity. Most people would not be able to afford to buy homes or cars. Being a tool, like any other, it requires an understanding of how to use it properly.

Like any other tool, using it incorrectly can end with disastrous results. The key is to learn the proper use of credit and make sure you understand the benefits as well as the pitfalls of misuse.

  • http://prairieecothrifter.com/ Daisy @ Prairie Eco Thrifter

    People were suing McDonald’s and tobacco companies for obesity and cancer, respectively, even though they were the ones performing the evil action that got them there in the first place. But I see your point. Credit is a tool. Credit doesn’t get you in debt, YOU do!

    • http://www.dollarversity.com/ Eric J. Nisall – DollarVersity

      I said not to get me started on the fast food part Daisy :-)

      I think it has become too easy to sue others for one’s own carelessness and screw-ups. Perhaps if people were held accountable for their own actions and indiscretions many of the issues would start to disappear. Then again, what would people write about if that happened?

  • CollegeMomCFu

    I was a bank lender in my younger days and we worked very hard to not lend money to people who couldn’t or wouldn’t pay it back. The old mindset was that banks wouldn’t lend money if you couldn’t afford it. Unfortunately, that mindset didn’t seem to change after banks and credit card companies started lending to anyone with a pulse. I actually had a friend with a good job who bought a car she really couldn’t afford and then blamed the bank when she had trouble making her payments. The bank had no way of knowing how frivolously she spent her disposable income.

    • http://www.dollarversity.com/ Eric J. Nisall – DollarVersity

      That’s one of the big issues. It’s not the lender’s duty to go through someone’s life with a fine-tooth comb. They just need to see that there is enough income (and small enough amounts of liabilities) to justify the credit. People need to learn to be responsible for their own actions, plain and simple.

  • Paul @ The Frugal Toad

    One problem is that many Americans feel that they are entitled to a certain standard of living. At some point each of us must accept responsibility for providing for our needs/wants. Hard work and planning, not credit, is the only way to success!