The Adam's Homework Chronicles, Volume 2
Credit Cards and my Experiences With Them:
Credit cards, perhaps one of the most ingenious inventions of the 20th century, and all it took was the modern telephone line. Credit cards are what took companies like Bank of America and turned them from small mom-and-pop shops where outlaws like John Dillinger could make an honest buck, into multibillion dollar corporations which control a majority of our stock market. The theory behind credit cards is simple and was taken straight from President Franklin D Roosevelt's invention called "Social Security". The theory states, "Let's keep borrowing against ourselves so we can get what we want until we are in debt up to our eyeballs and it will take us so long to pay this shit off our great great grand children are going to be broke". It's a novel concept, but is a two edged sword. Credit is only good for people who have the ability to properly financially plan, and not for people who are irresponsible, immature, impulsive, or have access to internet sites that use a program called "PayPal". The worst part about credit is that is a necessary evil. One of the keystone ideals behind financial planning is the planning for future investments, and credit cards are fundamental to this planning. When one is looking into acquiring large tangible assets in the future, say a house, car, or spacecraft, one must apply for a loan. Loans are given based off of a person's credit score, which is based on how much credit they have and how easily and timely they pay borrowed money back. Unless someone has applied for smaller loans or used credit cards, they will never be able to apply for larger loans. So, even those aforementioned irresponsible impulsive people must eventually get credit cards to get what they want, and they will never be able to properly use credit cards, and eventually they will get into debt and ruin their credit history, and it is all around unfair.
Allow me to present a case study on proper ways to use credit. The case study is my friend Michael, who is 3 years older than me. This is how you properly use credit: do not do what Michael did. When Michael was 16 he swooned a stranger into co signing for a car for him. He then used credit cards to pay off his car payments and never paid the credit cards back. Other credit card companies sent him credit cards to help pay off his bills and then he owed even more. Eventually Michael's credit score was destroyed, he owed about half the country's national debt to various credit card agencies, and his car was repossessed. Destitute, Michael sought to clean up his ways. He met a wonderful woman who was very good with her finances and eventually Michael began spending money properly. However, it has now been ten years since Michael bought his car and he has just turned 27 years old. Michael recently tried to apply for a bank account at an anonymous southern California credit union and he was denied because he still had 3 marks on his credit. However Michael paid the final 153 dollars he owed and now he is financially secure and can begin investing and planning in his future. Michael has now learned a valuable lesson which is reiterated in this book's chapters. ONLY USE CREDIT WHEN YOU CAN AFFORD IT. More importantly, only use credit when you have properly created a financial plan and understand the need for credit cards within that plan. Only buy things you cannot possibly afford when you absolutely need them.
After reading this chapter I often wander how much credit I could withstand at a given time. I currently do not have any credit cards as I do not feel they would fit into my financial plan. I calculated my debt safety ratio to make sure I should not apply for any credit cards. I divided the amount of credit statements I could withstand by my monthly take home pay. I can currently withstand 0 dollars a month with the amount of pay I take home. 0 dollars divided by my pay is still 0. See, no credit cards for me.
As a final note I thought I would present you with an interesting tidbit I learned. I have a close personal friend who attended the University of Washington and informed me that the U of W spent over 200,000 dollars in credit card fees alone his 3rd year of college. 200,000 dollars is an incredible amount of money. Take that 200,000 dollars and add it to the fees of every college, business, and agency in the United States and suddenly I start to wander if credit cards are really just a business marketing scam. Not to be irrational, but this is yet another reason I choose not to own a credit card. However, if I am ever going to build enough credit to buy my dream home on a lake where I can fish every day, then I will have to give in and get one. I’m depressed. The End.
Credit cards, perhaps one of the most ingenious inventions of the 20th century, and all it took was the modern telephone line. Credit cards are what took companies like Bank of America and turned them from small mom-and-pop shops where outlaws like John Dillinger could make an honest buck, into multibillion dollar corporations which control a majority of our stock market. The theory behind credit cards is simple and was taken straight from President Franklin D Roosevelt's invention called "Social Security". The theory states, "Let's keep borrowing against ourselves so we can get what we want until we are in debt up to our eyeballs and it will take us so long to pay this shit off our great great grand children are going to be broke". It's a novel concept, but is a two edged sword. Credit is only good for people who have the ability to properly financially plan, and not for people who are irresponsible, immature, impulsive, or have access to internet sites that use a program called "PayPal". The worst part about credit is that is a necessary evil. One of the keystone ideals behind financial planning is the planning for future investments, and credit cards are fundamental to this planning. When one is looking into acquiring large tangible assets in the future, say a house, car, or spacecraft, one must apply for a loan. Loans are given based off of a person's credit score, which is based on how much credit they have and how easily and timely they pay borrowed money back. Unless someone has applied for smaller loans or used credit cards, they will never be able to apply for larger loans. So, even those aforementioned irresponsible impulsive people must eventually get credit cards to get what they want, and they will never be able to properly use credit cards, and eventually they will get into debt and ruin their credit history, and it is all around unfair.
Allow me to present a case study on proper ways to use credit. The case study is my friend Michael, who is 3 years older than me. This is how you properly use credit: do not do what Michael did. When Michael was 16 he swooned a stranger into co signing for a car for him. He then used credit cards to pay off his car payments and never paid the credit cards back. Other credit card companies sent him credit cards to help pay off his bills and then he owed even more. Eventually Michael's credit score was destroyed, he owed about half the country's national debt to various credit card agencies, and his car was repossessed. Destitute, Michael sought to clean up his ways. He met a wonderful woman who was very good with her finances and eventually Michael began spending money properly. However, it has now been ten years since Michael bought his car and he has just turned 27 years old. Michael recently tried to apply for a bank account at an anonymous southern California credit union and he was denied because he still had 3 marks on his credit. However Michael paid the final 153 dollars he owed and now he is financially secure and can begin investing and planning in his future. Michael has now learned a valuable lesson which is reiterated in this book's chapters. ONLY USE CREDIT WHEN YOU CAN AFFORD IT. More importantly, only use credit when you have properly created a financial plan and understand the need for credit cards within that plan. Only buy things you cannot possibly afford when you absolutely need them.
After reading this chapter I often wander how much credit I could withstand at a given time. I currently do not have any credit cards as I do not feel they would fit into my financial plan. I calculated my debt safety ratio to make sure I should not apply for any credit cards. I divided the amount of credit statements I could withstand by my monthly take home pay. I can currently withstand 0 dollars a month with the amount of pay I take home. 0 dollars divided by my pay is still 0. See, no credit cards for me.
As a final note I thought I would present you with an interesting tidbit I learned. I have a close personal friend who attended the University of Washington and informed me that the U of W spent over 200,000 dollars in credit card fees alone his 3rd year of college. 200,000 dollars is an incredible amount of money. Take that 200,000 dollars and add it to the fees of every college, business, and agency in the United States and suddenly I start to wander if credit cards are really just a business marketing scam. Not to be irrational, but this is yet another reason I choose not to own a credit card. However, if I am ever going to build enough credit to buy my dream home on a lake where I can fish every day, then I will have to give in and get one. I’m depressed. The End.