How Easy It is to Become Blinded by Easy Credit

It makes me laugh now, but years ago when I watched a particular episode of the television show Little House on the Prairie, I was so judgmental.

Whaaaat?! Are you kidding me? Not Pa!

Seems the mercantile had some new fangled plan where the owner would trust Pa to buy stuff now, put it on his bill and he could pay for it later. There I was, horribly deep in debt myself, but aghast that kind of thing would be allowed back when life was so simple.

As convenient as credit can be, it can really mess up a person’s life. While I won’t get into that here   (you can read all about my journey, how I beat the debt monster and you can too, in my book Debt-Proof Living), a couple of letters in my inbox this week reminded me just how easy it is to become blinded by easy credit.

Dear Mary: Can you give us some tips on overcoming temptations and impulse buying?  I’m sure you printed a flow chart of sorts once before, to help people decide what they really need vs. impulsive spending. Thank you. Barbara

Dear Barbara: Here is a cleaned up version of the chart I scribbled out and attached to my checkbook cover many years ago. It was a kind of visual STOP sign I needed to make me think about what I was doing. Hope this helps!

Dear Mary: We are one month behind on our mortgage payments and plan to catch up this month. We have told our credit union we will pay half on the 1st and the second half on the 13th. This will bring us current. They call all day, every hour. When we answer they say they have to call us constantly until the amount due is paid. That is their policy. I say this can’t be true or allowed by law. It seems like harassment. Cindy, Maryland

Dear Cindy: I can certainly understand your frustration, but I can understand your lender’s policy as well. I know of no laws they are breaking by calling you at reasonable hours during the day. (You may be confusing this with laws that protect you when a debt is turned over to a  third-party collector.)

Look, when you signed the original loan document, you promised to make your payments on time, every month, in accordance with the agreement. You failed to do this. It’s not the end of the world, but you have to look at this from their standpoint.

If you broke your promise to make a payment on time, why should they believe that you will keep your promise to catch up on the 1st and 13th? If you didn’t have the money last month, what makes them confident you’ll have it this month in addition to your regularly scheduled payment?

Rather than feeling entitled to paying late on your terms, why not consider this through their eyes?

Untold thousands of people in this country have decided to walk away from their mortgages. But do they tell the lender this fact? No. They stop making their payments and then lie when the lender calls. They remain in the home until the lender can make it through the complicated and expensive maze called foreclosure. The statistics are staggering. Many people manage to eek out years of making no payments while remaining in the home.

You missed a payment and that’s a red flag for your lender. Frequent calls are keeping them at the forefront of your every thought, which you have to admit is pretty smart.

Here’s an idea: Tomorrow, call them before they can call you. Be kind and once again express your remorse for running late. Tell them exactly the day and time that you will be bringing them money, even if you’ve told them a dozen times. Then keep your promise. Show up in person. And be grateful for their long suffering.

Dear Mary: Several years ago, I began following your advice use cash, not credit or debit cards for day-to-day purchases. On paydays, I’d stop at the bank and withdraw enough money to last until the next payday. I then challenged myself to have some of that money leftover in my purse, which would then go into a piggy bank at home.

I just want to thank you because this has really worked well for me. I am way ahead of their game. I still don’t use debit cards for purchases―only cash. I feel like I have won and all from a lesson learned from you several years ago. Keep up the good work. We’re still listening! Carol

Dear Carol: Your letter just made my day. Thanks for writing.

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  • Never Late

    Your reply to “Cindy”, who was whining about the mortgage company calling about their late payment, was spot-on!

  • Emily Booth

    When I graduated college many years ago, the credit card solicitations arrived. It was so easy. I was in credit card debt for the next 20 years. It was not a good or easy life.

    I’ve been cleaning out the closets and coming across many items I either never used or used for one season. I enjoyed purchasing some of the items, the “hunt”, but there was some fantasizing involved, too.

    I give myself a weekly allowance. I have some debit & credit card purchases but these purchases are planned and budgeted for.

  • Jean Moffett

    Here is a twist to using cash to buy things. I live on social security and every penny is precious. I took two $20 bills and five $1 bills and some change to buy a tool to help a friend. The items I bought cost $23.29. I put my $20 down and then got out three $1 bills. Then I opened my coin purse and when I went to give the cashier my coins, he said I still owed him $20. Suddenly he had me questioning if I had given him the $20 bill. I found myself wondering if I had made a mistake and put the $20 in one of my many pockets. So, I gave him my other $20 bill.

    Later I checked all my pockets and I could not find the extra $20 bill. I went back in to see if it had fallen on the floor – nothing. I even asked the same cashier to check if the bill had fallen behind counter – nothing. The next day I called to see if the register I went to was over by $20. They said it was not. I realize then that the cashier took the money himself. I prayed for him. However, $20 was a lot of money for me and if I had I used my one and only debit card, that would not have happened.

    Thanks.

    • Kimberley Hunter

      I’m sorry that happened to you, Jean. But you should remember, most banks charge fees, especially if you use your debit card a lot. Cash is better, except when a thieving cashier is waiting on you. And there are some places that only take cash. Like hot dog stands, or concessions at parks and sport fields. I believe that debit and credit machines are just too expensive for them. Even when they do have them, the Interac is still liable to go down every once in a while.