The credit card trap

I have a confession. Several years ago, I was standing in a queue to collect some

theatre tickets for my family, and my friend was doing the same for hers. I got

mine, and paid for them by credit card, feeling contented by the convenience

of this cash-free transaction. It was then her turn to Pay. The whole operation

passed as smoothly as mine, but my delight soon turned to abject shame. My

credit card was a fairly pathetic, status-free dark blue, whereas hers was a very

exclusive gold one

was newer, and my house was smarter. How did she get to appear more flash

How did she do this? How could this be? I knew I earned more than her, my ca

than me?

Now, I had a job which was as steady as any job was in those days-that's to

say, not very, but you know, no complaints. I had a mortgage on my house,

but then who didnt? I paid off all my credit debt at the end of the month, so

although technically, I was in debt to the credit card company, it was only for a

matter of a few weeks. So I assumed I had a good credit rating

Call me superficial, and Im not proud of myself, but there and then, I was

suddenly jealous of my friend. I decided I no longer wanted a blue card. I

wanted a gold one. A

gold card was suddenly indispensable, it would make me

feel good about myself, and desirable to others

So I applied for the most distinctive, shiny golden card the company offered

I was turned down

When I had recovered from the shock, which took several seconds, I asked

why. It appears that because I pay my credit card bill both on time and in full,

Im not the kind of person that they want to have their gold credit card. They

target people who are prone to impulse-buying, and potentially bad credit

risks, tempted to spend more than they have, and liable to fall behind with

repayments. Then they can charge them more interest, and earn more money

That's the way they do business

So does this explain why the credit card companies are luring impoverished

students with unrealistic interest rates, like my kids?

Three weeks ago, No. 2 daughter came home from university for the weekend

She s inher second term of her first year. She has a student loan of $3,000, like most of her friends and a small allowance from her poor mother (ha!)tot

transport, books and living expenses. She wears clothes from the

charity shops and rarely goes out. She hugged me (never usually does

that)and then said, "Mum. I need to talk to you.

oe"What is it darling? Tell me everything

n"Tve applied for a credit card, and I need someone to act as a guarantor

for me. Is it OK if I put down your name? Thanks so much. Mum, must

dash/ Bve, m

n After Id hauled her back into the house, it transpired that her bank had

written to her offering a credit card at a low interest rate for a trial three.

month period, subject to suitability.and so on. Her bank! I trusted

them! They know even better than I do how broke she is

: Here's a serious question. Why do they call them credit cards when it

would be more accurate to call them debt cards?

. Heres an even more serious story. Another friend's daughter, Kelly, was

studying modern languages at university, and spent a year overseas. At

some point in the year, there was a change of procedure, and Kelly's bank

failed to allow her to access her funds in her current account, because

the request was from outside the UK. Naturally, there was a lengthy

correspondence while she tried to sort this out, so the delay in being able

to access her funds meant that she went into the red, and her debts began

to rise more than A200 above the agreed limit on her overdraft of f1, 500

ns When Kelly got back home, the bank charged her f100 for

going over the limit, and insisted she paid E30 a month to

bring the balance back to below her limit. They omitted to

tell her that she wasnt actually paying off the debt, but only

the exorbitant interest on the overspend of the overdraft

1s So Kelly had to turn to her credit card which she had

used sensibly and sparingly until that point. Because

she was a student, and because she didn't use it much,

naturally h

er credit li

mit was lo

7 And not s

the mir

Prisingly, she couldn't pay off

even

m payment

were not only bank charges owing, but also crealrci a

on her credit card bill. So the

debts and interest. And of course, she was recorded as being a

ad credit riskThings then went from bad to worse. A few months into her final year, the bank

notified her that it was going to reduce her overdraft from E1, 500 to E1,000. They

told her to apply for a student loan to cover the rest. But when the loan company

did a credit check, they discovered the card debt

Guess what? She didn't get the loan

This was a delightful kid who had great restraint with h

economical about her lifestyle. She didn't go on spending sprees buying new

shoes, and she didnt use her credit card as if(unlike me)it was a fashion item

She

Ised it to buy

o survive

And what happened? She had to drop out of universit

I wish there was a happy ending to Kelly's story, although maybe there will be

For the moment, she's working in the local supermarket, and it s probable that

she ll have another go at university when she has paid off her debts

So this is what the banks do. They set traps which appeal to our vanity and

greed and sometimes to our basic need for survival, And then when we fall into

the trap they shout"Got you! Didnt you realize it was a trap?

And here we are today, caught in the credit crunch, with world economies

in free fall, all because the wicked bankers set us traps which we fell into,

attracting us with endless publicity for loans of money which even they didn't

have! It now appears they were borrowing on their own flashy gold credit

cards too

So I have a solution to the credit card trap, and I want all of you to listen to me

very carefull

I want you to lay out all of your credit cards in a line, take a large pair of scissors

and cut them into small pieces. Then put them in an envelope and send them to

your bank, with a letter saying(more or less)"I trusted you and you deceived

me. Youve got the whole world into this ridiculous credit card trap, and if I

ntow cut your cards in half, and take away your potential to tempt money away

from honest people like me, maybe it will be your turn to learn what it's like to

run out of cash

As for me. I de

lont want any more credit cards, no more status symbols, no more

bad feelings about wishing I could show how superior I am to others. I'm not

ing to yearn any more for what I cannot afford or cannot have