Welcome to your first day on campus. And look…there’s a nice-looking gal handing out free t-shirts. How fun! And all you have to do is feel out an application for their credit card. How easy! What could go wrong?
Let’s flash forward a few years. Even though you swore to leave the shiny new Visa card in your wallet except for emergencies, you soon discovered that everything is an emergency when you have no money. So what do we do when we have no money and need something crucial, like a pair of shoes or dinner? Why, we whip out good ol’ Visa! Our savior.
HOW MUCH do I owe the Piper?
So now you’re looking at a Visa statement and a $5,000 debt. And you haven’t even started sending out job applications yet. Oh, and let’s not forget the $50,000 in student loans you racked up. We’ll talk about that another time. For now, let’s talk about the ultimate necessities of life in American: food, water, shelter, and credit cards.
Well, of course credit cards are a necessity…I mean, it’s darn near unpatriotic not to have one, isn’t it?
Fact: the first credit cards didn’t appear until the late 1950s. By the 1970s, they were still not in 75% of U.S. households. By 1990, it was closer to 90%.
So what happened between the 1970s and 1990s that made my Visa card an essential part of living?
Marketing happened. Banks have some of the most ingenious marketing departments on the planet. They are so good that they’ve convinced you that you can’t get through life without credit cards. Why, you need them if you want to rent a car, get a hotel room, fly in a plane. You simply need credit cards to survive.
Red, White, and Blue Lies
All of that is a lie. Was that too strong? This is one of those moments where I desperately want to break my own rules and drop a few f-bombs. We have been lied to so many times about credit that we start repeating the lies. I mean, come on, even Barbie has a credit card! Economists tell us what amount of debt is appropriate for an average household.
I’m sorry…appropriate amount of debt? Perhaps the same economists, along with Mattel and Chase Bank, can tell me what would be an appropriate amount of cyanide in my morning coffee. Listen to me. They’re (insert f-bomb) morons.
Here are some more facts for you:
The average U.S. credit card debt is around $15,000. And that’s not including the mortgage, care loans, student loans, home equity, etc.
The average interest rate on that debt is 18%…doin’ the math? $2,250 per year.
The #1 cause of divorce in America is debt problems and money.
A debit card, which is the same as a checking account, will rent you a car, get you a hotel room, and put you on a plane.
Dirty little secret: there is nothing, not one thing, that you can do with a credit card that you cannot do with another form of currency.
Oh, sorry, I lied, too. There is one thing that only a credit card will allow you to do: get into debt so far over your head that you lose your house, your marriage, your car, and probably any chance you had for a comfortable retirement.
The New Slave Trade
So here’s the truth: if you start using credit cards, you will get deeper into debt. Yes…you will. When was the last time you saw anyone go Christmas shopping with a pile of cash? Yeah, Christmas is the holiday that stays with us all year long. You will go deeper into debt, then you start working one day out of five just to make the minimum payments. Do you know what it’s called when you work for nothing? Slavery.
Credit cards, car loans, student loans, you name it, are the 21st century version of slavery in America. They see you coming the moment you graduate high school. They bombard you with ads (what’s in your wallet?), they tempt you with “cash back” and bonus points, they bait the hook, they toss the hook, they set the hook. Hard.
Surviving the Zombie credit apocalypse
So here’s what you’re going to do on that first day on campus. See the cutie handing out t-shirts and holding a clipboard? He or she is your worst enemy. They want to eat you. Just assume they’re zombies and they want your brain..because you pretty much have to forfeit that to get sucked into these scams. So your mission is to run the other way. Screaming if you have to. Take as many as will listen with you. This is your life they’re after.
You have a choice here, people. You can be rich or you can be broke. You get rich by investing a small percentage of your income every month and staying out of debt.
Don’t be a sucker. Don’t give away your freedom. Don’t be lunch for the banks. Run from credit cards as if your life depended on it.
Believe me. It does.
I encourage you to visit Dave Ramsey’s website and learn all you can about credit and why it should be avoided. I don’t get a penny for sending you there. My only goal is to save as many of you as I can from the same tragic mistakes my generation has made regarding money. Just look at 2008. ’nuff said?