Debt Dunk

Looking back, I see how I fell into the credit trap. Normal logic is that you need to build your credit in order to have credit. Warped logic if you think about it. I need to go into debt so later I can go deeper into debt. This is not only flawed logic, it is great marketing done by the credit card companies and big banks.

The problem for these companies is that they have already oversold their credit to the general public so they need to find a fresh open market. That market is Colleges! There are offers for credit cards everywhere on a college campus. free pizza, free shirts, and all kinds of other free gifts just by getting their credit card. To top it off, they hire beautiful college coeds or smart smooth talking guys who can sell these cards to the college student. They are not well trained and they are paid by each card they get applied for. They often lie or convince you that you need something you don’t. Ever heard the one, “you don’t need to use it but your get the free shirt?” Problem is, how many people can walk around with $500 or more and not spend it? Everything looks great when you use someone else’s money. Scary thing is, you have to pay it back and with interest. It will take you about 44 months to pay off $500 at $20 a month. Most students are in school for 4 years so it takes almost your whole college years to pay that little $500. That is if you pay it off without borrowing more. The average for college seniors is to have over $4000 in credit card debt. Many have more than that.

Credit cards are easy and spending on them is even easier. However, starting your adult life in debt will be like a ball dragging you down for stuff you burned through as a student. Better logic is to buy your own stupid t shirt for cash and avoid these sharks.

As a college student, you need to think about your future in everything you do. If you are already borrowing student loans, think about how much it is harder it will be to pay the loans when you also have that credit card debt. The key word for a college student is BUDGET! If you have a job, budget your money carefully so that you can pay as much of your school as possible, eat, and cover your expenses. Just like the real world, you can’t spend more than you make. If you do, you be a normal American! Did I mention, normal Americans are broke.

Is that extra pizza worth it? One pizza a week for a year on your credit card will add up to $500 or more. Each year of pizza will take almost four years to pay off. How does this make logic? Avoid credit cards! Stay away from people who push these cards even if they are so called friends. Having credit cards in your wallet is never smart. It is very easy to say charge when there is something you just have to have. Avoid the temptation by not getting the card in the first place.

No matter what the credit card pusher says, it is not true. Here are a list of things you may hear:

1. You can pay it off each month. (The mjority of credit card holders carry a balance over every month)

2. You need to build your credit by getting a credit card. ( Debt to get deeper in debt)

3. You can just get the free gift and never use the credit card (Temptation of free money in your wallet is too much to resist)

4. You are just helping me out so I can earn a commission ( Translation: you are screwing yourself to help me)

5. You can show your college support by getting a college logo card (This is not team support, this is slick marketing, they win  you lose)

There are many many more that you will hear. Some of these people pushing these cards are just average college students who are trying to earn some cash. They are not bad people but you still need to avoid them.

Be smart now so you do not spend your whole life trying to get out of debt. If you need advice or help, I am here to help, just contact me through comments or the contact form. My advice is free and if I can not help, I will suggest ways to find help. College should be enjoyed but not at the expense of your future.

We have all heard the saying “Keeping Up With The Joneses.” It means try to keep up with other people as far as material goods and social status. We all know these people, they always want to pick up the check at dinner, they drive fancy cars, have all the latest toys, and seem to have a huge social status. Don’t we all want to be like then?

Well let me tell you what they and others will not. All the toys and lavish lifestyle is just one job layout off or big medical bill away from all coming to a crash. You see people like this live a wonderful life on a borrowed dime. They float through life looking rich while paying on credit cards, home equity loans, and those dreaded car payments or worse yet car leases.

These people live way above their paycheck just to make an impression on the world. At night they fight over money, stress over paying the bills, and toss and turn all night. Is it worth it?

You can be like everyone else and enjoy life right now to the fullest! However, what happens when you lose your job? What happens if that fancy car breaks down. What happens if you credit limit maxes out? You can only borrow and live off credit so long before the roof caves and you are sunk. This should not be a normal life and you should not accept it as so.

If you buy a new television on a credit card and of course you get the best because you do not have to pay anything out, do you know how much that will cost? If you buy a $1200 on credit card at 11% interest (Really good rate right now) for four years, you will have to pay $288.70 in interest. Any idea what the value of that TV will be in four years. If you are lucky, $150.

That is just one example and normal people like the Jones are buying everything on credit and making small payments each month. If they charge just a $100 a month for dinners out they are paying the same $288.70 interest for a meal that is gone in less than an hour. I have been there done that and paid the price for it. This is STUPID!

Meals taste better, cars drive better, and clothes fit better when you pay cash. You do not have to worry how you are going to pay for it because you already paid for it! This is the way most of grandparents and great grandparents lived. If it was good enough for them, why is it not good enough for us? To truly be free, you have to free yourself of debt. Proverbs 22:7 says “Just as the rich rule the poor, so the borrower is servant to the lender.” This was written many years ago and it still applies. Slavery is alive and well except we put ourselves in chains.

Next time you see your neighbors car and wish your paid for car was that nice, laugh at them because they will be paying for that for at least 4 years while you are investing to build wealth. I guarantee, that car will not look that great when it is paid off but your bank account will look great.

Do not strive for normal, do not try to keep up with the Joneses, that is the bridge to poordom and you are looking for the plane to RICHDOM.

Good luck in your path to Debt Free Living and as always, I am here to help if you need advice or help.

This blog is here strictly for one reason. I hate DEBT! It is the biggest misconception placed on society. Did I buy into it? Of course I did. I was raised on the great concept that to get credit, you have to have credit. So at age 18 I was working for Sears and applied and got my first credit card from them.

I went out and purchased a VCR and then a new television. This was great; it was instant gratification at its finest. Buy now pay later. It was the American way right? Who cares that I was paying minimum payments at 24% interest. I had the great entertainment. It only cost me $22 a month. Well I learned that at that rate. I little $1000 I borrowed would only take 111 months. Holy cow! That was almost ten years. That great TV and VCR would be all at age 28. That was a huge wake up call. It was going to cost me $2442 for that TV and VCR. Worst part was, the VCR was refurbished because when I was 18, VCR were almost $1000 new.

I paid off that credit card as fast as I could and would love to tell you that the story of my credit cards ended there. Even with my new found knowledge at 18 of interest rates, I followed the normal society and charged and borrowed. That is what normal people do right. No that is what creditors want you to believe. I learned more and more as I grew older and made tons of stupid mistakes but all that has changed and that leads me to this point.

This blog will hopefully inspire you, kick your butt a little, and educate you in the matters of debt. My mistakes and my education will hopefully save you before you make the mistakes or help you if you are sinking in debt. Feel free to jump in and be part of my journey to wipe out all debt!