Stop With The Evil Credit Card Crap Already

Photo credit: © Leo Blanchette

There are a lot of people out there who have a negative opinion of credit cards and credit card companies.  Much of these complaints center around the interest rates charged and the ease with which a person can get into debt.  The problem I see with those arguments, and this is my opinion, is that those issues both center on how the user decides to handle their access to credit.  It’s no secret that I love using credit cards, and I am pro-credit and believe that credit cards are useful tools when used properly.  What you may not know is that I did not always use my own access to credit the right way.  Actually, it’s safe to say I was a damn fool and stupid for how I used it in my younger days!

 

My Story

I’ll be honest with all of you reading this–when I was younger, I was in a great deal of credit card debt.  So what happened?  Did I have someone on my college campus feed me some bull about earning rewards or cash back or the freedom and maturity of having a credit card?  Did someone hold a gun to my head and force me to hop from store to store making purchases for them?  Did a representative from the credit card company mislead me regarding what can happen if I didn’t pay in full?  Was I convinced that credit was a “loan” that didn’t need repaying?  Did the credit card try tricking me with complicated and hidden rules & terms in the disclosures and credit agreement?

 

NO!

 

I was in my early 20’s, renting an apartment with a roommate who was both a friend and colleague, and I had yet to find myself.  I was very much into material possessions, thinking that having more stuff was the way to live, and I was very interested in consumer electronics and computers.  I had spent an inordinate amount of money buying parts to build multiple computers, wasting tons of money on a home entertainment system  with a 400-disc DVD changer, 1,000 watt stereo receiver, premium cabling, touch screen multi-function remote controls (well before the advent of tablet computers) and much more.  I purchased a $1,000 head unit for my car.  At one point I would go out with friend and buy trays of shot tubes for everyone just because I could.  I was just an out of control kid, who flat out couldn’t control my spending and was in for over $20,000 which was almost as much as I was earning in a single year.

 

I was responsible for the mess I was in.  I knew that and blamed no one else but the person looking back at me in the mirror.  Sure, I went through the normal stages of frustration, denial, and wonderment as to how I could possibly get into this situation.  But, there was never any doubt in my mind who was really at fault–ME!  I was the one who got myself in that situation and me alone.

 

Being educated beyond the 3rd grade, I knew how to read, so I was able to comprehend the fact that if I charged something I needed to pay the balance at the end of the billing cycle.  I was able to understand the fact that if I didn’t pay my bill in full I would be charged interest.  I knew that if I didn’t, or couldn’t, pay my bill it could have a negative impact on my credit report and even be grounds for legal action.  I knew that the ultimate responsibility would rest on my shoulders.

 

So if a kid in his early 20’s can understand and accept the consequences of his actions, what is the problem with all of the people out there who get themselves into their own debt troubles yet have to point to the evil credit card companies?  Why is it the credit card issuers’ faults for extending lines of credit that you cannot handle properly?  Why is it always the bank who brands the card you use that has to shoulder the responsibility for your lack of proper use or understanding of credit?

 

Believe me, I understand the power that you can feel when wielding a credit card, feeling that the world is at your fingertips.  I know full well what it feels like to be able to walk into a store and grab anything you see and be able to walk out the door with it.  But, I also know what it means to take responsibility for your own actions.  You can’t go through life pointing fingers at everyone else for your own shortcomings when it comes to being unable to control your spending.  There are times when you simply have to stand up and say “I did this.  I got myself in trouble with credit card debt and no one else!”  It doesn’t matter if you have credit available to spend, there’s no reason to use all of it when you have no means to repay it, and there’s no one forcing you to do so.  

 

There has to be some personal accountability when it comes to credit card debt, and people need to learn to stop playing the victim already.  Period.

 

 Have you ever been in credit card debt?  Did you take responsibility or try to put the blame on the company that gave you the credit card?  Did you feel obligated to use the credit extended to you simply because it was there?

 

  • http://www.springcoin.com/blog/ Kevin Yu

    Eric,

    What a timely post.  Have you heard of Barclay’s new credit card?  You should check it out.  http://www.barclaycardring.com/

    And yes, I definitely had my fair share of being in debt, I think mostly everyone can relate.

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

      Kevin, I think that card is just a ploy to make it seem like Barclays cares about the customers.  In reality, if the suggestions made by consumers don’t make a positive impact on the company’s bottom line, no matter how many people want it, it will never be added as a feature.

  • http://read-thatreviews.blogspot.com/ Rachel

    Personal responsibility is dead in this country. Things are never MY fault didn’t you know?

    So ya when I decided to stop being retarded about my money, I realized I did it to myself. Now I’m the one fixing it. Not that hard of a concept honestly.

    • http://www.carefulcents.com Carrie Smith

      “Personal responsibility is dead in this country”. Isn’t that the TRUTH!

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

        To a degree, I think that personal accountability has definitely gone the way of common courtesy and chivalry.  Not to say that it’s completely absent from our culture, but it certainly appears to be more difficult to find.

  • http://www.carefulcents.com Carrie Smith

    This totally reminds me of the mortgage crisis. Why are the banks being blamed for everything? They didn’t hold a gun to the person’s head and make them take loans they couldn’t afford. Each of us should be responsible for our own financial decisions, and if we can afford something or not. This definitely applies to credit cards and loans in general. 

    I was very irresponsible with credit cards in my early twenties. Since then I’ve changed my mindset about credit and loans, and feel I can use credit cards much better. Like you said, they aren’t inherently evil, if we could only discipline ourselves.

    • http://www.moneyspruce.com/ Jeffrey Trull

      Carrie, the problem with your arguments related home mortgages is that the banks were deliberately deceptive in how they marketed and granted these loans to people. 

      For example, sub-prime mortgages that are now illegal gave people “teaser” rates that allowed them to make very low payments at the start but required much larger payments later. These loans were given without ensuring that the borrowers fully understood the implications of the loans. I can cite even more examples if you’re not convinced with just that.I know we like to think that everyone is as wise as we are when it comes to money and financial decisions, but that’s just not true and it’s just not that simple. Do the borrows deserve some of the blame? Of course. But I don’t think it’s as simple as how you’re describing it.

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

        You both have valid points.

        Jeffrey–it wasn’t all of the banks that were deceiving customers.  There were actually many legitimate loans written, as I can attest to since mine was one of them, but the market was so heavily inflated by the shady deals, that even real ones got caught in the bubble.

        Carrie–Even though Jeffrey has a point about the bad loans that were underwritten, I agree with you that there were people who just didn’t care (or didn’t consider) the future impact of their purchases.  Too many people got caught up in the “American dream” scenario of owning a home even though they couldn’t afford all of the expenses that went along with it.

        That being said, this is a very different scenario than credit card debt in that:

        1.  Good, honest transactions got caught in the bubble burst, and
        2.  In the mortgage crisis, it could be argued that both sides should be responsible for pretty much equal amounts of the blame.

        With credit cards, the way I see it, once it is in a person’s hands, they are the only ones that are involved in the purchase decisions.  The companies aren’t calling them every other day to pressure them making a purchase, and in the case of buyers’ remorse, a bad decision can be easily remedied if the person realizes that the purchase was a mistake. 

  • http://www.moneyspruce.com/ Jeffrey Trull

    I see what you’re saying, but I think it comes down to this: people in this country are not as financially intelligent as we give them credit for (no pun intended). I bet if you asked most people what “APR” stands for and how to calculate interest based on it, they wouldn’t know and couldn’t figure it out. That’s why the Department of Consumer Protection is working diligently to make this more clear for people.

    While there are many people that can manage credit properly and responsibly, there are a ton of people who can’t and who never will. Credit cards are a hugely-profitable industry, and they’ve set up a system that ensures they can make billions. It’s not a level playing field. 

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

      I’m not even going into the question of financial education.  All I’m saying is that people, regardless of education level, socio-economic background, income, etc. know what interest is, even if it’s in the simple terms of “money you have to pay when you can’t pay a bill on time”.  They don’t necessarily need to know how to calculate the average daily balance, or the interest itself, but they must know that credit cards aren’t free money.  If they don’t then there is definitely something wrong there.

      My biggest problem isn’t so much with the way the credit card disclosures are written or  how long the grace periods are, but rather the fact that people know they have to pay the bill yet play the victim card when they can’t.  I don’t know why it bothers me so much, but seeing so many people writing about how the credit card industry forces or tricks people into spending is just ridiculous because every single person controls the usage of the cards.  If they fail at managing their money and their impulses, then it a failure on the individual level, not the governmental (even though making basic financial education mandatory would go a long way) or institutional levels.

      I guess I just have a problem with people doing stupid things they know they shouldn’t do and not take the responsibility for their own actions.

  • http://www.ontargetcoach.com/ Brent Pittman

    Good topic for discussion. Credit cards are not evil, but the debt they create for people is a problem. Yes, I believe in personal accountability 100%, but I’m also about educating the public about the dangers of debt. Too many 18 yr olds have sold their financial soul for a pizza and T-shirt. 

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

      What would you suggest, a first time credit course like they offer for people using a first time homebuyers program with a mortgage company?  I’d even accept an increase in my property or sales tax to cover a higher education budget for a financial literacy class to be taught in high schools.

      I’m all for educating people, but there are certain things that have to be viewed as common sense.  Borrowed money needs to be repaid–everyone knows that, and if you use a credit card, you are borrowing money from the bank that issued the card until the cycle is over.  That’s common sense for a normal person, or at least I think it should be.

      • http://www.ontargetcoach.com/ Brent Pittman

        Eric,

        I’ve coached a number of people where financial issues just don’t register. It’s not that they are dumb or immoral, they just don’t ‘get it’. Some type of personal finance class in HS or college could help. For those who are immoral, the bankruptcy laws leave a lot of room for abuse and default and thus higher % rates for the rest. Perhaps I am trying to discuss too many subjects at once.

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

          You lost me at the end Brent, where did the morality concept come from?

          Believe me, I know about many people not “getting it”.  I can’t tell you how many times I’ve tried to explain the concept of payroll tax deposits to business owners and time after time, they continue to be late with them–if they pay at all.  The thing that makes it easier for me to deal with is the ability for most of them to accept the blame for their issues, whatever they may be, that prevent them from being able to get with it.  

          One guy just bitches and moans about it being everyone else’s fault–the suppliers who charge too much, the customers who don’t pay quick enough, the government for making him handle those duties.  Sounds just like a lot people who piss me of blaming everyone but themselves for getting into credit card debt (which he has too).

  • http://www.oddcents.com/ Dannielle @ Odd Cents

    I know that I’m responsible for my debt, which is why I try to be responsible with my credit cards. Every year my limits are increased, but I just ignore it and stick to buying what I need.

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

      I hear you Danielle. I have the same problem with some of my limits being increased without me asking.  At some point, I’m just going to call and ask that they be reduced, not because I don’t trust myself, but because I really don’t need such high limits and see myself spending as much as I’m allowed to.  Plus, if anything happens and my accounts are compromised, this will limit what thieves can get their hands on.

  • http://www.financialfreedominspiration.com/ Usiere

    I quite agree. My opinion is that very few people know how to handle credit properly. The borrow to spend on liabilities rather than assets, and end up with a mountain of debt. Personal freedom comes with the freedom to make unwise choices. We can’t stop people from having access to credit cards…

  • http://www.financialfreedominspiration.com/ Usiere

    I quite agree. My opinion is that very few people know how to handle credit properly. The borrow to spend on liabilities rather than assets, and end up with a mountain of debt. Personal freedom comes with the freedom to make unwise choices. We can’t stop people from having access to credit cards…