(Source: OC Housing News) – When you see an American Express Card commercial, do you see a sophisticated financial manager or an irresponsible spendthrift? The credit card companies want you to see a savvy money manager who wisely uses their products. But is it wise to use a costly product you don’t really need?

In a world without consumer credit, people would save money, and they would only spend what they had available. People would store their unspent earnings in banks who could loan that money to businesses that produce goods and services that benefit the economy. These savers would also earn money on their savings as lenders competed with each other for capital to make business loans.

Unfortunately, many people don’t have the financial management skills to save money, nor do they have the discipline to do so. In a world of instant gratification, consumer credit is a shortcut that permits people to have what they want now without needed to save to pay for it. However, this comes at a cost. Rather than earninterest on savings, people pay interest on their debt.

In effect, consumer debt is like a negative savings account. If a balance is above zero, people have savings, and they earn interest. If a balance is below zero, people have debt, and they pay interest. People with debt areforced to make monthly payments, which they become accustomed to. The only way people obtain savings is to be self-disciplined and make payments to savings even when not compelled to do so by a bill from a lender. Unfortunately, not everyone has this discipline.

Apparently, many people haven’t been fully indoctrinated by lender propaganda and they feel the shame associated with their lack of self-discipline. As a result, polls show people are embarrassed about their debts, but since self-discipline is difficult, most people aren’t embarrassed enough to change their ways.

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