Give me credit!
Vocabulary changes with the each generation. Credit used to be something given when it was due - a reward, bestowed on those who worked hard for it. Inventors were given credit for their findings, artists recognised 'to their credit'. Times have changed however - the age of Credit is upon us, though this is not nearly as appealing as its previous meaning.
No, this Credit is the opposite - 'money borrowed with the understanding that it will be repaid'. Often value given before it has been earned, the popularity behind credit cards has led to a generation who spends before earning. While making sense for once-offs (single payments with a definite deadline, slightly before the payer is guaranteed to have enough), a more common practice is to use these cards to buy everything in advance. For some reason, Credit is often treated as 'free money' - a card with $5000 limit is seen as free $5000 that can be spent at will. Never mind the ludicrously high interest rate (15%+ is not unheard of) that can come if payment is not met.
Is the urge to get today's-furniture-you-can't-afford with tomorrow's-money-you-haven't-yet-made really that strong? "Children born into debt" is often a tagline associated with third world countries - yet the average credit debt due in australia is over $2000! That's almost $40 billion spent, none of which actually exists yet, some of which may never.
"But I want it nooooooooow" you may say...
Think about it this way - most credit cards work by getting the user to pay the balance once per month. So say you currently have a card, with the average $2000 in debt per month. Within a year, assume you are still at $2000 debt - this means your spending has equalled your earning. If you instead waited until the end of the month before starting your buying, your spending will equal your earning, but now you are paying for items after you can afford them - meaning no credit debt, and no interest. While you still end up with the same gear, your one month patience has resulted in a saving of $200 (assuming 10% interest).
Give me $200 (with the bonus of reduced risk) for waiting a month any time. Credit where credit is due.
No, this Credit is the opposite - 'money borrowed with the understanding that it will be repaid'. Often value given before it has been earned, the popularity behind credit cards has led to a generation who spends before earning. While making sense for once-offs (single payments with a definite deadline, slightly before the payer is guaranteed to have enough), a more common practice is to use these cards to buy everything in advance. For some reason, Credit is often treated as 'free money' - a card with $5000 limit is seen as free $5000 that can be spent at will. Never mind the ludicrously high interest rate (15%+ is not unheard of) that can come if payment is not met.
Is the urge to get today's-furniture-you-can't-afford with tomorrow's-money-you-haven't-yet-made really that strong? "Children born into debt" is often a tagline associated with third world countries - yet the average credit debt due in australia is over $2000! That's almost $40 billion spent, none of which actually exists yet, some of which may never.
"But I want it nooooooooow" you may say...
Think about it this way - most credit cards work by getting the user to pay the balance once per month. So say you currently have a card, with the average $2000 in debt per month. Within a year, assume you are still at $2000 debt - this means your spending has equalled your earning. If you instead waited until the end of the month before starting your buying, your spending will equal your earning, but now you are paying for items after you can afford them - meaning no credit debt, and no interest. While you still end up with the same gear, your one month patience has resulted in a saving of $200 (assuming 10% interest).
Give me $200 (with the bonus of reduced risk) for waiting a month any time. Credit where credit is due.
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