Debt is Bad, Debt is Addictive, Debt is Evil (Part 3)

sense of pride & credit:

Long before credit and money, there existed barter system.  It was all about buying what you NEED by trading what you have. People were proud of their produce (be it salt or wheat) and hard-work and used it to bargain what they needed, because it was THEIRS.

Later when money was invented, Indians always thrived on spending their own money. They saved and paid cash to build houses and even to buy Mercedes and Maybach in 2000's. Memorize this please "I Can Thrive Financially, by using MY MONEY ALONE".

But, the after effects of Globalization saw the marketing of credit card which associated a sense of pride on having and using credit card. This is bombarded on us daily via TV, billboards, newspapers, websites, direct marketing, postcards etc., A virtual feeling that when you flash your card, you'll be respected.

But in reality, there is no pride attached to using others money. As it was well hidden with rewards and what-not as I described in the previous post.

• Eastern culture shames you for using others money while western culture appreciates that.
• Eastern culture insists on saving while, western counterparts insist on spending. 
• Eastern culture punishes heavily on default, thereby creating a fear of debt while westerners find excuses for one default after another.

Did you notice the big difference? Changing from Cash to Debit to Credit is not a shift in personal value, it is a cultural shift. It is mostly about

• Impulses to the want for Instant Gratification. 
• Keeping up with Joneses
• If not now, then when?

With a credit card in hand, urge to satisfy (wants of) myself and my loved ones will be more than when I have my cash in my hand.  Let me give an example.

You go to a Coach store planning to spend $200 on a purse. But you find the lowest price of the purse you want is $321 including taxes, You can either choose to disappoint your loved one(s) and turn home empty handed (of course with the $200 intact) or use credit, the choice is yours. If you choose to buy, the extra $121 has to either come by cutting from some other spending you've already planned for or by borrowing money. More importantly this spending cut has to come from a want and not from a need. I personally cannot cut $121 standing right inside the Coach store. I can only do it calm and quiet after reaching home.


Pride and Shame has to be kept where they belonged to, not where Banks tell us to keep it. Hopefully you got my point in all these... It doesn't matter whether I pay cash, debit or credit, I would need to ensure that it is MY MONEY. To summarize,

• the advantage of cash is that there is only "My Money" available
• the advantage of debit is I can splurge, but only on my money
• With credit, it needs lot of planning & discipline to stay within my money because it will be hard to differentiate between MY MONEY and OPM.

I talk more about OPM because, this is the starting point if you are either starting to earn money or planning to come out of debt trap. If you are using Credit cards you most probably will have a polluted wallet. You need to clean it up. The cleaning solution is not to cut and throw away the credit card, but having a realization that you will use only "My Money" from the Credit card. Credit card should just be used as a tool to use "My Money" and earn rewards and benefits (More on that later).

I promise to stop my sermon on OPM with the next post where I'll give couple of pictorial illustrations and real life examples to make sure, readers are very well aware of this "Profitable Menace"

To be continued....

(Note: The fifth post will be the much awaited "Reason for this Blog, Why I started writing". For now, there will be one post every week. Please subscribe and share this with your friends, if you find this useful and(or) interesting)