How we learn to accept debt.

Last week I talked about “Who does Debt benefit?”  If you missed that post, you can review it HERE.  This week’s post is “How we learn to accept debt.”  It is not an accident that most people end up in debt.  They are trained to use it.  Learn more in this week’s blog.

There are far too many people who end up stuck in debt.  They don’t realize the danger until they are deeply in and need help.  They wonder how they got there, but the answer to that is quite simple.  They were trained to be in debt.

My training started when I was in high school.  My Dad took me down to the bank and we met with the banker.  I wanted a stereo system and my Dad wanted to help me.  So we set up our meeting with the banker.  Dad felt it was important for me to establish my credit rating.  We went to the bank for our appointment and filled out the paperwork.  I got my first loan (I am sure my Dad co-signed the loan) and I was on my way to having debt issues myself.

The training starts even younger than high school.  There was a cartoon when I was young in which the wives would tell their husbands that they were going shopping.  As they left, they would shout “Charge it!”.  This is a sad example of indoctrinating people from an early age.

College students are frequent targets of the credit card companies.  Many schools hand out card application packets with their orientation packets.  With the skyrocketing cost of school, these cards are a temptation that comes at a time when funds are tight.  It seems like a great deal, a card that will help you make purchases.  While the fine print explains the repayment terms, they use long legal terms that discourages reading.

Even college business classes train you how to use debt.  Interest is taught as a necessary business expense rather than the price increasing mechanism that it is.  Many people accept this explanation without question.  It is a part of our debt training.

Once people are out in the work force, no matter what level of school they have left, the credit card offers start coming in the mail.  The offers tempt you with low introductory rates that make you think you are getting free use of the credit card company money.  They never tell you about all the fees that they are going to collect from the merchants that you frequent.  They don’t tell you that the merchants have to raise their prices to cover the fees that the credit card company collects for the use of their card.

Once they get you into the habit of using their card, you get to the point where you cannot pay the balance off at the end of the month, so they get to collect high interest fees on your balance.  They call it convenience, but don’t say who it is convenient for.  It is convenient to the credit card company’s bottom line.  They really like making money on you.

The first thing a realtor will ask you is how much you are able to borrow so you can purchase a house.  They have also been trained that only really rich people can pay for a house without financing it.  While they have to show you how much your financing will cost you over the life of the loan, it is again sold as a cost of the transaction, not an increase in what you are paying for the house.  That doesn’t even take into account the fact that you are giving the bank ownership of your house.  You won’t own it until you have paid double the sales price.

So the next time you wonder how you got into debt issues, remember that you were trained.

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God Bless your week!