Upon watching the news tonight, it was stated that we are collectively spending $1.65 for every $1.00 earned. That's completely nuts! No wonder our consumer debt is climbing. It's amazing to watch people in stores tender the plastic for everything from a cup of coffee to a major appliance, without any thought of paying it off when the bill comes due.
The major financial institutions are making a pot load of money charging anywhere from 18 to 27 per cent on the unpaid balance. It is this irresponsible behavior that gets people in a bind. There is nothing wrong with the concept as long as it is paid out every statement.
There are a lot of people out there with more than one credit card "maxed out" and no way out but to make the minimum payment. Some of these cards have credit limits that would allow you to purchase a small car. Banks don't want you to pay out because they cannot charge interest before the statement date.
It's a known fact that if a store didn't take credit cards, it would fold in less than a month. They used to ask "Will that be cash or credit?" Not any more. The more plastic you can slap down the better they like it. For some screwy reason, people don't want to pay in cash, when in fact in the end you have to.
The nice part of cash is after you have paid and got your receipt, you can go on your merry way knowing no surprise is coming in the mail. Credit cards may be convenient, but also carry a high risk, either through loss, theft or just plain bad behaviour on the part of the holder.
People would watch their spending if they had to use cash, because when you are out of cash, you are out of the store. It is geared for you to impulse-buy with no thought of the consequences of what is to follow.
I think the most ridiculous of it all is to go into the local coffee shop and pay for a cup of coffee on your card. What's with that? Can't dig a toonie out of your pocket? Can't blame the retailer/coffee shop, they are going to get it any way they can.
So there's my take on it, and yes, I do pay my statement out before the due date.
George Getty
Prince George
