By Nick Roettiger
Western Sun staff writer
If I were to take a survey, asking people what they thought the most brilliant invention of the past 100 years was, chances are I would get answers like television, antibiotics, or the computer. While these all seem like obvious answers, I respectfully disagree. I would have to say the most ingenious invention of the past 100 years would have to be the credit card.
In 1946, John Biggins of the Flatbush National Bank in New York invented the “Charge-It” program, and the concept of credit cards caught on immediately. By the 1960s, the use of these “charge cards” was in full swing, and these days they’re practically issued with birth certificates.
So what is it that makes me think these evil little cards are a brilliant invention? Well when you add the idea of an instant, high – interest loan to the natural impulsiveness of Americans, as a creditor, you end up with a fortune.
It always starts small. You’ll get a card with an introductory limit of about $500 and promise yourself that you’ll only use it for purchases you absolutely need – just to build credit.
Well that’s a wonderful idea, except you never really realize how much stuff you “need” until you walk into a mall or department store. It’s usually at about this time that our skewed voice of reason kicks in.
“Call of Duty: Modern Warfare 2? I think yes! And what’s the point in having the game if you’re not going to pick up the headset that goes with it? Or that uncomfortable little rocking chair so I can sit 6 inches from the TV screen?
Maybe I can even find a game controller with squishy buttons so my thumbs don’t get sore within the first 5 hours of game play.”
See what I mean? You walk into a place with the expectation of picking up a few things, and the next thing you know, you’re throwing money around like Dennis Rodman at a strip club.
Then by the end of the week, all you’ve got is a maxed out card and a bunch of junk you never really wanted all that much in the first place. Credit card companies love it when this happens. They know that it will take you forever to pay it off, and the longer it takes you, the more they profit off the interest.
Using an example from financialplan.about.com, a $2000 purchase with a credit card, at an 18 percent interest rate would take you 30 years to pay off, if you only paid the 2 percent minimum monthly payment of $40! Including the approximately $5,000 in interest fees.
So my advice is this: If you have a credit card, just be careful.
Don’t let the biased voice of reason talk you into buying anything you really don’t need, and don’t use the card unless you’re sure you can pay it off in a reasonable amount of time, avoiding as much interest as possible.
You don’t want to end up paying $300 for an item that only cost $10, and you should not lose sight of the fact that you’re spending money that you don’t actually have.
