Don't Let Credit Cards Rule Your Life

When using credit cards, practicing self-discipline and common sense will allow an individual to use the cards as an advantage (Lynott, 2008). Advantageous tips are to limit the number of credit cards to two for personal use and two for business, charge only what you can pay off at the end of the month because that is interest-free, carry cash to pay for small purchases because they add up quickly on a credit card, become knowledgeable about the interest and additional fees and penalties, and focus on items that are needed and not just wanted (Lynott, 2008).

Maxed out is a documentary written and directed by James Scurlock investigating debt in America and shows how the credit and lending issues are affecting society. This documentary shows how banks, credit card companies and other creditors intentionally market to people who are more likely to have problems paying their debts such as full time college students, previous bankruptcy filers and people with visual behavior weaknesses. However, the poor and uneducated are not the only ones effected by debt traps. In today’s society almost everything it purchased on credit from every day households to the government. The average household debt has been steadily rising for decades, millions of people in America have simply accustomed themselves to

James D Scurlock’s “Maxed Out” focused on the revolving use of credit cards to charge now and pay later and the fact that once the credit card was maxed out another one was sent from the credit card companies and the whole process begins all over again. Scurlock’s essay made the reader aware of the downfalls and hardships that can occur when credit cards are constantly used for purchases compared to Kevin O’Donnell’s “Why Won’t Anyone give Me a Credit Card”.

Credit cards can ruin any financial situation if used improperly. Let’s look at what our two financial authorities think about them. Dave Ramsey is completely against the idea of using credit cards. Being a devout Christian, he often finds his ways of financial teaching through The Bible. Proverbs 22:7 states “The rich rule over the poor, and the borrower is slave to the lender.” You are charged a premium for using a credit card in the form of interest. While you can pay off credit before the interest is charged, Dave insists that many people do not pay if off in time. It is better to get rid of the enticement altogether than to play with the idea of using a

We all fall on hard times and get behind on bills. In addition, with accounts in collection and debt collectors

“In a nutshell, the system is geared to keep you in debt” Kevin Trudeau writes in his book “Debt Cures” At the time of publishing his book (2007) The average American consumer had more than $8,000 in credit card debt. Today the average American household owes double the amount at $16,000 in credit card debt. As NerdWallet puts it “Debt is American as apple pie.” Being the 4th highest type of debt in America at $750 billion, just below mortgage, auto debt and student loan debt. Credit card debt is one typical type of debt Americans have to deal with because of the “aggressive practices by the entire lending industry” Trudeau says. Kevin

The main argument throughout this documentary is that credit cards are the main cause of the debt crisis, which occurred in 2006 in America. Credit cards are portrayed throughout this documentary to carry negative consequences, aiding in the corruption of the system, and ultimately creating debt problems that America faces as a nation. The main question we are left with is, can we as a nation live without credit cards?

In the world of personal finances, credit cards play an important roles in lives of many people. Sometimes, it's out of choice while other times it happens out of necessity. Regardless of why it happens, the numbers surrounding credit card debt are worthy of scrutiny in order to determine whether having or using credit cards is a sound financial decision.

The government has ensured the money will be repaid through the wage garnishment system. Only a small percentage of consumers endure this process because debt can be collected by numerous means (Arnold). In response, credit debt was virtually non-existent until 1970, now Americans have an average of $3,500. A time used to exist where only the wealthy had access to credit cards, but the credit score industry caused financial companies to feel comfortable with the broadening of credit cards across the population (Indiviglio). Letting consumers purchase those big-ticket items also enables them the ability to spend more holistically. For example, $20 cash is manageable for a few groceries, but a credit card can cover those groceries and a new television simultaneously. Credit cards seem to give consumers an infinite amount of money at their fingertips. After so much debt has risen, creditors resort to the courts. Over a million lawsuits are filed annually concerning credit card debt, which does not seem like a small percentage (Arnold). And through wage garnishment, creditors collect their payment whether the consumer can afford it or not. The consumers should not be treated in this manner for using a credit card in the means that it was distributed for.

In America, there has never been a time in history where so many Americans have become millionaires or billionaires, yet so many Americans are in debt. Studies have been down in America that the “average U.S. household owes about $15,706 credit card in credit card debt, the average mortgage is $156,333, and the average student loan debt is $32,953” by combining all three of the categories of debt together the total amount is $204,992 (NerdWallet). It has become an epidemic across the country at the same time some Americans aren’t too concerned with their debt. Some of them are more concerned with pursuing in buying useless items just because advertisements are telling the viewer to go buy their product. Capitalism has given birth to a new age of people who are being conformed into having a materialistic and consumeristic mindset by businesses using psychological tactics through commercialization, which people are getting played into thinking they will socially accepted if they purchase the product.

Now that you have a better understanding of the risky business of owning credit cards, let us examine who is to blame?

Banks are to blame for a large contributing factor of student debt, which is consumer debt for students. Like many people, students will turn to credit cards when they are unable to pay for textbooks or their meals for the rest of the week. Credit cards are seen as a safety net in any financial emergencies. According to “Generation Debt: The Dirty Business of Deregulated Credit”, “In addition to ramping up their marketing efforts during the 1990’s, the credit card industry has also gotten much more

“The average American owns 3.5 credit cards and $15,799 in credit card debt… totaling consumer debt of $2.43 trillion in the USA alone.” (Beckner). Debt forces many people into depression and worrying lives. People struggle to discover happiness through financing goods, but struggle even more to find a way out of debt. Through consumerism, people lose their finances in department stores, car dealerships, and much more. Most of the possessions people buy with credit cards become impractical within a few months. The void they search for is never really filled. Consumerism is just a way to get the economy going, without thinking of a person’s individual finance

With many hourly wages and salaries at a standstill, millions of households are relying on credit cards to make ends meet. Research shows that although wages have increased by 28%, the cost of living continues to outpace wages at 30%.

The question of whether credit card companies should market on campuses or not, brings many different opinions, some of which are driven by personal experience and some that are driven by profit. There are those who do not agree with this because they know what they have gone through with credit card debt. There are also those who say they should market on campus because they are adults and contribute to the company’s profit. Even though students are adults and need to earn credit, credit card companies should not market to college students on campus because they are too naive and this results in graduating with too much debt.