True cost

Credit is a system whereby a person who can not pay gets another person who can not pay to guarantee that he can pay.

- Charles Dickens -

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Most regrettably, I was in a situation last week that caused me to watch the six o'clock news on the television - Something I rarely do and which I've avoided for many years. It's rubbish you see, propaganda, and is designed to destabilise individual thought and imprint how to think upon people too stupid to think for themselves. It is, quite simply, poison to the mind, and should be shunned - There's better ways to remain apprised of important events that matter to the individual.

I was unsurprised to see a "news story" about the amount of money that will be spent in the retail sector leading up to Christmas by Australians as it's a story they run at this time of the year, multiple times. I'm not sure where the figures come from, but it's large, $63.9 billion dollars, which equates to just over $2,450 for every Australian citizen or permanent resident. What the bloody fuck? #WTBF

It is expected that the vast majority of that spending, and the post-Christmas sale spending, will occur on credit cards that people will take years to repay, if ever, and buy-now pay-later schemes like After-Pay will also feature prominently.

This, at the same time as the cost of living skyrockets, the cash rate, determined by the Reserve Bank of Australia, is increasing in a bid to stem inflation and banks reacting with increases to mortgage interest rates adding hundreds and hundreds to average monthly repayments and...well, you get the idea. We're not in an environment that's heading in the right direction...but the credit spending will ensue nonetheless.

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"Remember that credit is money" - Benjamin Franklin

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I learned the true cost of credit spending around the age of eighteen when I ran my first-ever credit card up in a few short months and spent two years paying it off.

It was $2,000, a lot of money back then, and the pain was palpable but it was a powerful lesson. Looking back, I should have known better, I was raised in a family that had very little to go around after essential spending and I felt I had a reasonably good handle on financial matters, but yeah, I was a fucken knucklehead I guess. #WTBF

These days, I'm still a knucklehead, but a much wiser knucklehead, and I'm smart enough to understand the difference between good and bad debt...and am lucky enough to have next to no debt because I worked really hard and not amassing bad debt and at paying off any I happened to have. I owe a modest amount on my house, under 20 percent of its market value, and that's it; the sum and total of my debt.

I know there's many out there who have a good understanding of financial matters and do a great job managing debt, but there's multitudes who do not. I wish they taught this stuff at school as I see it as essential to a person's life but they do not, people tend to learn the hard way, or they simply don't learn at all and carry vast sums of debt and pay exorbitant amounts of interest...whilst running up more debt.

Come Christmas time, there'll be millions of people tearing open gift-wrapping and beaming broadly about whatever it is they find. I wonder though, how well people sleep knowing the (usually) crippling amount of credit debt they place themselves in; it must be very unsettling. I also wonder how many will take whatever money they have and give themselves the gift of paying it down on their debts as a Christmas present? (I think I know the answer to that though - None.)

What's the true cost of credit spending and credit debt? I don't know, but I know it's nothing good.

I also know people will turn up to the malls, online and shopping precincts like good little lemmings to spend their other people's money then spend years repaying it with interest. They say, the definition of insanity is doing the same thing and expecting a different result. I agree, but irresponsible credit spending could be supplanted into that phrase right? I think so anyway, but what do I know, I'm just a knucklehead.

What do you think? Feel free to tell your own credit-related story or just make a comment if you wish.