Let there be no more petty excuses - if you get into debt on credit cards, you’ve only got yourself to blame. The news today that banks are ‘luring customers back into the red’ with juicy introductory credit card rates has been twisted by the critics to say the least.
It’s almost as if the poor, desperately in-debt Mr. Average Briton is scrambling around looking for a scapegoat. And in banks, he’s find a ready-made villain. ‘Why, oh why, did you offer me credit I couldn’t afford?’, Mr. B says. Please. Give me a break.
It reminds me of that wonderfully allegoric film, ‘Confessions of a Shopaholic’. You wouldn’t have thought it, but this Hollywood chick flick is as potent a study on modern consumerism as a scholarly journal (and easier on the eye, too).
Protagonist Rebecca Bloomwood (Isla Fisher) is a college graduate with a shopping addiction. She manages to rack up £19,000 of debt on credit cards buying clothes, bags, shoes etc.
And all this before she has a job. The metaphor for our modern consumer culture is clear: Rebecca can simply spend, spend, spend with no thought for tomorrow.
Her spendthrift profligacy is, of course, only made possible by cards offering dirt-cheap credit. But that is not the message of the film. No. The moral here is that getting into debt was her choice, her responsibility.
The same is clearly true in our own lives. Undeniably, having the ability to make key purchases when your cash flow has dried up is positive. Thank goodness for the credit card when you’re two days from payday and the fridge looks like a wasteland – crumbs, spilt milk, a knob of butter, but little else.
The problem, though, is that we abuse this luxury, this lender of last resort. We spend more than we have on cards far too often. ‘I want that plasma TV and I can afford it because I have a credit card’ is no good when you’re already deep into an overdraft.
We keep rack up debts, transfer the balance from card to card, pay off the minimum each month and try to survive. But eventually it always comes back to bite us when the interest-free periods end and we’re hit with punitive rates. Many borrowers end up paying through the nose for costly cards advertised as ‘free credit for 12 months'.
In ‘Confessions…’ (without ruining it for those still keen to watch), that’s exactly what happens to Rebecca, who is stalked by a debt collector throughout.
Blaming banks and card providers for our woes because they offer enticing deals is pretty pathetic – we must all learn to manage our own finances and take responsibility for our spending. Yet it’s almost as if today's apologetic commentators are excusing those who can’t and don't.
Stewart Hosie, a member of the Commons Treasury select committee, says: ‘Of course credit card companies are businesses, but I would ask them to have not just attractive deals for new customers and transfers, they should make sure they have affordable rates all the time.
'There is no point offering great introductory deals if people cannot service that debt.'
Sure banks have a responsibility to foster well-run businesses. But no more. The fact that banks offered offered credit to 'sub-prime' borrowers was no more the cause of current financial crisis than the fact that millions of us were reckless in applying for loans we couldn't repay.
Credit cards should be avoided altogether by those struggling under the weight of debts and who have small and unstable disposable incomes.
Sure today’s credit card offers are ‘even more generous than before the recession’ and that's a bad sign from a banking point of view. But on a personal level, it shouldn’t matter. We should have learnt our lesson by now: only ever borrow on a credit card if you are 100% sure you can afford to repay, in full, when the amount is due.
Facebook Page >>>
No comments:
Post a Comment