The Lie of Buying on Credit

Photo by Alan Alfaro
Photo by Alan Alfaro

A little over a year ago, my wife and I decided to effectively blow away all our credit cards. We were tired of the debt, you see, and had decided to work hard at aggressively paying off all our current debts. Part of this plan involved getting rid of our credit cards so we wouldn’t be tempted to use them. We changed our spending habits, we started budgeting, and slowly but surely we started to see the benefits of these changes. Within a few months, all our of credit cards were paid off in full. We shifted to paying on the larger of our outstanding bills, including the last of my school loans. Over the last year, we’ve steadily reduced the amount of money we owe to others. It has involved sacrifices and the proverbial tightening of our belts. It’s meant that we can’t just buy something whenever we want, if it’s not in the budget. Quite simply, if we can’t pay cash, we don’t buy it. It was hard at first — very hard — but we’ve gotten used to it now, and it’s gotten easier to do. Part of what makes it easier is the fact that we’ve eliminated all our debt now except the last of my school bills (10+ years and counting) and our mortgage. We’ve seen the benefits of living debt-free (or, at least, not accruing additional debt), and it’s made all this penny-pinching worthwhile.

So, it always amuses me when credit card companies send us mailings trying to get our business back. This happens on a fairly regular basis. We get flyers in the mail, usually in envelopes that say something like, “OPEN IMMEDIATELY! TIME-SENSITIVE CONTENTS!” Which, when opened, turns out to just be junk mail. (I’ve learned to identify these things pretty quickly now, and they almost always go into the trash, unopened.) The flyers themselves all bear the same kind of message: “You’ve earned a special low rate!” This is followed by some super-low interest rate — 1.8%, 1.9%, one even went as low as 1.5% — set for the next 12-15 months, where it subsequently ratchets back up to the usual 8-12% rate.

And I find these mailings amusing. It’s amusing to me because our family has worked so hard to eliminate the debt in our lives. We’ve literally shredded our cards and refused to buy a single new thing on credit since then. So, naturally, we’re now considered a “safe consumer” by lending companies. We’re the kind of consumer who is viewed as low-risk because we’re more likely to actually pay back the money that we’ve borrowed. We’re the kind of consumer that lending companies look at and say, “Oh, congratulations! You’ve worked really hard to greatly reduce your debt! Now we want to ‘reward’ you by giving you a reason to go back into debt!”

It’s stupid, really, and what’s worse, it’s a horrible lie. It’s a falsehood that lending companies have perpetuated in our society — and that our society has bought into completely — that buying on credit is a good thing because it allows us to have the things that we want and that having the things we want — and having it NOW! — will make us happy. It’s an irony then that, thanks to inflated interest rates, we ultimately end up paying way more in the long-run for things we could have bought at cost if only we’d been patient enough to pay cash and that those things we thought would make us so happy only end up making us more miserable as a result. What’s worse, we end up in hock to the lender, often permanently, thanks to this constant, vicious, self-perpetuating cycle of debt recycling. Our family decided not to play that game anymore, and we’ve never been sorry.

People always say that they want to have a good credit score. Personally, I want to have no credit score. I want zero debt and zero obligation to any company that wants my money. I want to have all my liquid assets freed up so that, if I want to, I can go out whenever I want and buy something nice for myself or for someone in my family. I want to have that kind of freedom, and I can’t do that with debt hanging over my head. We’re not there yet, but someday I hope we will be.

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