If youre like most people, you probably own at least one.
And like most people, youve maybe never thought what its really costing you
At a recent conference held by the Fabian Society at Londons Imperial college, one of the issues discussed was happiness, and, more specifically, why it seems to elude so many of us.
One of the conclusions reached was that one of the greatest causes of unhappiness in the last 50 years has been peoples constant desire to raise their level of material wealth (especially in relation to others who have more).
As one speaker noted, Were like children on a rainy Sunday afternoon, impossible to please. We have everything and nothing.
You may disagree, but I cant think of a worse modern symbol of this constant craving than the credit card.
Yes, I know, they might seem a godsend when payday isnt for another week and a half. Having free money can be a fantastic thing...if you manage to pay it back on time that is...
If youre like a great many, though, and only managing to make that minimum monthly repayment, here are 4 things to think about the next time you reach for that piece of plastic
1 Its very expensive!
2% interest a month may sound like peanuts but that equates to 24% per year. Lets imagine, like me, you lived in the UK, and had an average balance of £8000 on your card... that would mean you were paying £160 a month interest. On the national average salary, thats almost a weeks work!
2 Its not your money
Youre actually paying someone else for the privilege of making you poorer! That hard-earned cash should be in your pocket, not some lenders. How can you remain solvent if youre continually spending money you dont have?
3 Money burns a hole in your pocket
If youre like me, I can bet youve met or know loads of people who always seem to have too much month left at the end of the money. Yet, Ill bet you if they earned double or even treble their income, they would still find some way to squander it. It seems to be in our nature somehow.
Weve all seen those quiz shows where the contestants win big money. Whats the first question theyre asked? Yep, thats right, How are you going to spend it? I dont recall many replying they would wisely invest it for their retirement.
4 You spend what you dont have
Credit cards give you the illusion of being wealthy. Lets face it, if you were handing over a 1000 dollars instead of that little piece of plastic, you might just stop and have a quick rethink.
It used to be the case that Gold cards (those ones with the massive spending limits) were the preserve of the wealthy, but the banks werent too long in realizing that if they gave these out to everyone, they would simply go ahead and spend as if they were wealthy. We seem to prefer illusion to reality, somehow.
Way back in the sixties, a French philosopher called Jean-Paul Sartre came up with a concept he called the Practico Inert.
Fancy terminology aside, he was trying to explain in a nutshell how humans almost always (and without realizing it) become prisoners of their own creations.
He used the example of Chinese peasants who needed wood in order to provide fuel and building materials for themselves. The long-term effect, though, was that the continual loss of trees needed for wood gradually exposed their land to flooding and drought.
Likewise, in our modern world, the credit card creates a short-term illusion of freedom and control, but in reality, only makes you poorer and increases your dependency on others.
So next time youre tempted to reach for that piece of plastic, stop for a second and have a think about its true worth to you.
Is it really making you any happier, or like so many others, could it be seriously damaging your wealth?