In this series, I’m looking at our changing attitudes to money, and answer the simple question: are we all credit card slaves now? Part 1 was yesterday: entitled Where did our attitudes to money come from?
Credit Cards, Bank Accounts and Salaries
Suddenly from subsisting from week to week on wages became more challenging as we were all forced to wait four calendar weeks plus some for our paychecks. And wow! Didn’t it feel good having that much cash in your bank account? Didn’t it?
“You bet. And so, you’d splurge a little here and a little there. You’d write a few checks (‘cheques’ to all you Brits!) to buy the groceries, and hope the store didn’t cash them too early, or that the overdraft fee wasn’t too much. You’d be all right because payday was just a few days away anyway!”
When credit cards were first invented, they were primarily intended for luxury consumption for business travelers and ‘wealthy’ travelers, too. American Express, MasterCard, Visa, etc, Classic, Gold, Platinum, Clear cards
All were designed to create the impression of wealth. Unfortunately, the banks’ pursuit of profits above customers hastened the degrading of the higher value lines, while forcing banks to create ever new ‘brands’ at the premium or private finance end of the spectrum. Meanwhile, for ordinary consumers the presence of credit cards in your wallet went from a sign of wealth to a sign of status to a mere sign of credit worthiness.
Thereby, the credit card industry created a whole new language of ‘apparent’ wealth, where terms like independent income were replaced by disposable income; net worth became credit worth; rate of return became APR; and business deals became ‘transaction fees’. The whole language of wealth was corrupted in such a way that on graduation, students are now told to build your credit history, to check your credit ratings, and to manage your credit score successfully. What happened to building your wealth, checking your investments returns and managing your portfolio?
Has credit card ‘wealth’ affected your ability to build real wealth? Did you borrow too much or pay too much interest? I would love to hear your comments on this…