Have you ever been called a deadbeat? What image first comes to mind when you hear that word? Is it a picture of someone running away from his or responsibilities? Even though this probably isn’t you, did you know that you may be called a deadbeat and not even know it?
A Deadbeat in the credit card industry is a card holder that pays their bill on time and never carrys a balance to the next billing cycle. Even though you are using your credit cards for how they were designed and exercising discipline in managing your finances, credit card companies are not making much, if any, money from your activities and you are then classified as a deadbeat. I have read of cases where not only did the credit card company not make any money from these so called “deadbeats, but they actually paid them to use their cards through cash back incentives.
Credit card companies may actually make money off these deadbeat card holders, but it won’t be through interest they pay. It will be through various banking relationships and merchant fees charged to the merchants that accept the cards.
Credit cards, when used with care and discipline, can be a great asset affording some protection on purchases that paying in cash or by debit may not afford. In tight financial times it can be tempting to pull out the credit card, but unless you are disciplined enough to pay it in full at the end of the month, it can be a costly adventure. Enjoy being a deadbeat for once.
In the July 22, 2008 edition of the New York Times, OP-ED columnist David Brooks writes an opinion entitled The Culture of Debt . In this article he points out the debate between those who say the predatory lenders are at fault for the debt crisis and those who believe the borrowers are at fault. While there are very valid arguments for both sides, is it possible that there may even be a third position to be considered?
According to Brooks, “America once had a culture of thrift. But over over the past decades, that unspoken code has been silently eroded.” As such, what has happened to our financial system is part of a larger social story. Rising home prices presented temptations for people to take on more risk. With an over abundance of easy credit, Americans were able to acquire designer goods. Or how about buying something on credit now with no money down and no payments for 4 years? Make Sense?
Are we like the proverbial frog, that when placed in a pot of cold water won’t notice that the heat is being turned up until it’s too late? It would seem that we absorb the patterns and the norms of those around us. So instead of recognizing the pattern of over indulgence, we start making excuses or jokes about it, which seems to make it a bit more palatable. As Brooks says, “We mimic the behaviour around us. Only at the end is there self-consious oversight.”
What happened after the Depression? A general attitude of frugal living and saving set in. When the dot com bubble burst, we saw a sobering of investments in technology endeavors. With our earlier oil crisis Americans changed their driving and purchasing habits and moved into more efficient vehicles. But once the crisis ended and incomes rose, people began to think the crisis is over and this country began moving in large SUV’s. Sociology must be a fascinating study.
Rocking Chair Wisdom believes it is time for our public institutions, including our places of worship, to begin teaching and speaking about the values our country was founded on. While this would be a worthwhile step, we need to return to teaching these values in our homes. There is nothing wrong with having nice things and even luxurious things. But deep down we need to get back to the basics of where our joy comes from. We are a free people, but seems that in many ways we are trying very hard to lead an “imprisoned” life.
Before we leave you this month, please note that we have added a new category on the right called Inspiration. It is here that Rocking Chair Wisdom will periodically publish articles we find to be uplifting. We encourage you to take a look. Our first article is entitled “Daddy’s Empty Chair”
Until next time, keep on Enjoying Life After Retirement.
Don’t forget your KINDLE
.
Tags: credit, credit card, debt, thrift
Leave a Reply