In today's society, you need credit to survive. You need it for so many things. Without credit, you would find it very difficult to rent a car. When you go to rent a hotel room, the first thing they will ask for is a credit card. And without credit, forget about buying a home as most people couldn't afford to pay cash.
So, credit has been not only undeniably critical in the thriving of our economy, it has enabled many citizens to live a life that they could only dream of without credit. The problem is that Americans are so extended when it comes to credit that millions are teetering on the edge of bankruptcy.
A half century ago, it was hard to get credit. If someone saw a living room or dining room set in the department store that they wanted to have, they had a couple of ways of going about getting it. They could save their money from their paychecks and deposit in the bank until it accumulated to a large enough sum where they could pay cash for it. Or, they could purchase the living room set on 'lay-away'.
Lay-away is an anachronistic term which meant that the department store would 'reserve' the living room set, in their inventory. And, every week or month, you would pay them a portion of its cost. When you had paid the full cost, the furniture was yours and you could take it home.
The kids that have become teenagers today, however, have pretty much grown up with credit all around them. From the time they were babies, they have watched the adults around them, their older siblings, and other people purchasing all sorts of items using a plastic card. As a result, there is a disconnect between associating the money earned from a job with the credit card used to pay for that new xBox or video game.
And, by the time they start college and are getting applications for credit cards to fill out, they have had very little or zero experience in actually handling credit. So when they actually begin to charge things to their credit card, they are often surprised at the speed with which their finances get out of control.
80) If we want to prevent our children from becoming permanent slaves to the credit card companies, the time to teach them about credit and how to handle it is long before they get their first credit card. Because, once they become overburdened with debt, it can be almost impossible to climb out of it. And, these days, with jobs becoming scarcer by the year, it becomes critically important for everyone to take control of their finances as soon as possible.
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