Piotr Jakubowski – Mind over Marketing

Nobody Gives You Credit, You Have To Earn It
December 3, 2007, 2:33 am
Filed under: accountability, advice, credit cards, finance, financial intelligence

I was watching a documentary, “Maxed Out” about credit card use in the United States. The situation is dire. Before I get started, here are some quick statistics. 

  • Total US Consumer Debt (including installment debt, but not mortgage debt) – $2.46 Trillion in June 2007
  • Total revolving debt is $904 Billion
  • US Households will have received 5.3 billion offers for new credit cards in 2007
  • 40% of US families spend more than they earn

 Courtesy of Credit Cards.Com and Hoffman Brinker.

One of the best quotes in the documentary was “Nobody Gives You Credit, You Have To Earn It”. Funny thing about this, is that the quote came from a very old clip from the 50s or 60s. This mindset is not new, yet it has been disregarded so vehemently over the last few decades.Nothing in life is free, especially not credit.

Yes, you may start out with $500. But when you’re paying 24% interest on your last missed payment, are you given credit? Not anymore. I keep returning to this subject, but I strongly believe that it is important to establish a strong sense of financial responsibility early. Yeah, you could buy that car that you can’t afford. But do you want to be paying $30,000 for a car worth only $20,000?

Robert Kiyosaki hit the nail on the head in his book, “Rich Dad, Poor Dad” . One of the only ways out of the Rat Race of debt (yes, chasing yourself silly to find money to pay off next month’s bill is a rat race) is the exercise of financial intelligence.

“The only way to get out of the “Rat Race” is to prove your proficiency at both accounting and investing, arguably two of the most difficult subjects to master.” – Robert Kiyosaki

Yes, we do live in a “right here, right now” world. But wouldn’t that computer or TV be so much sweeter if you worked hard for it and bought it with cash?


2 Comments so far
Leave a comment

Piotr, Credit is given way way too easily these days. I had a very small credit amount on the first card I ever had and I maxed it while dealing with a family emergency. Within two weeks I was being prompted to take more credit. Banks used to be tight on giving credit. Not any more. They allow people to wind themselves tighter and tighter these days.

Comment by Susan

I had meant to add that I think banks need to become more conservative and more socially responsible.

Comment by Susan

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