My Grandfather’s Column

Living on Credit

The current international financial chaos is a classic example of a disaster that’s been just waiting to happen.

Meanwhile most of us, if we are at all interested, seem to be busy blaming the government, the banks or the very rich for the present state of affairs. The truth however is that it is the whole of the culture in which we live that must share the responsibility for the mess. Probably there’s not a lot we can do about the big culprits but that still leaves us individuals, who for the most part seem to think that living on credit is normal and harmless behaviour.

I am lucky enough to have been brought up to believe that if you don’t have the money to buy something you want you should just save up until you can afford it. I remember saving for three years to buy my first full size bicycle. I was even led to believe, perhaps through playing Monopoly, that one should only take out a mortgage as a last resort. Frankly I think that was pushing the idea a step too far. However anyone who takes out a mortgage should be able to see how it can be paid off. Sometimes we do well to consider a less expensive property than our ideal one.

Forgetting about mortgages for the purpose of securing a home, there is still need to think about the way we use credit cards. The credit card debts with which the average person in this country lives is obscene. These cards are a great convenience and becoming almost a necessity as both cash and cheques go more out of favour. Surely the best way of using them is to pay off the total debt every month. That way no interest has to be paid and the only debt incurred is as short-lived as possible. I’m fed up with my own credit card company’s oft repeated suggestion that I should transfer to them all my (negative) balances from other cards.
This does however remind me that it is generally expected that we should live with credit card debts around our necks. There are many better causes to which we might devote the surplus income we waste on servicing our debts.

We don’t even need to get into debt buying Christmas presents. The joys of Christmas in no way depend on the amount we’ve forked out for gifts. For Christians our true joy is that

Unto us a boy is born!
King of all creation,
Came he to a world forlorn,
the Lord of every nation.

-Peter Graham

[LYT adds: I'm not sure why he should be fed up with balance transfer offers -- if you have a bunch of different balances, it's actually quite useful to put them all on a card with a lower interest rate. As for living beyond our means...the unemployed or semi-employed, like me, have little choice at times but the card!]