BY ED HUNGNESS
Special to the Record Eagle
April 21, 2008 04:00 am The dictionary defines a curmudgeon as a crusty, cantankerous old person full of stubborn ideas. For the most part, my friends tell me that I'm a fairly likeable fellow and even-tempered. But, at times, certain things just bother me and I may just seem more like one of those curmudgeon characters. Currently, I am annoyed with the advertising campaigns of credit card companies. Have you ever noticed how the main focus in their commercials is the reward programs? By charging purchases that we often can't afford in the first place, we can earn a reward. Cardholders can get a new mountain bike, an Ipod or free air miles just for charging things on that piece of plastic. Then we earn another reward. We get to pay 15 percent interest on our outstanding balance. They never mention interest rates in the commercials, which explains why we get so many credit card offers in the mail. Doesn't everyone wish they could get a 15 percent return on their investments? Here's an idea from the past. When we want something that isn't absolutely necessary and don't have the money to buy it, save up for it. Then we can buy it and pay cash, or charge it and pay off the balance on the next statement. We might appreciate our new acquisition more and it would save us a big chunk of interest expense, thus creating our own rewards program. I'm sure that some who are reading this can remember when there were few credit cards available. Consumers reached in their wallets and paid cash and, if their wallet was empty, they didn't buy it. Today the median amount of credit card debt carried by the average American household is $9,600 and climbing. It is estimated that this revolving debt costs families approximately $1,500 per year in interest payments. Over a 30-year period, this adds up to $45,000 in additional expense. If, instead, this money were invested monthly over the same 30-year period in a conservative investment yielding just five percent, it would grow into a nest egg in excess of $100,000. That would be a great way to save for the retirement years. Consumers are spending money that they don't have and the tab is growing. Americans currently owe $2.5 trillion in consumer debt and spend more than $50 billion a year in interest payments. Some commercials come right out and discourage the use of cash, claiming that it is old-fashioned and slows up the checkout line. Don't get me wrong, credit cards are handy and sometimes a necessary tool, like a hammer. The problem is, if we don't use that tool carefully, we could hit our thumb (and THAT hurts). I'd like to think that I am not really a curmudgeon, but just a guy who still holds on to old-fashioned values and ways of thinking. We would all benefit by working toward the goal of freedom from credit card debt. Reach at Ed Hungness at edhungness@yahoo.com
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