Christmas is the time for lots of shopping, and I have been doing my fair share this year. I never use checks, not since we lived in San Diego eight years ago. Instead, we use one credit card, and pay it off every month. We only spend what we can afford because, frankly, I cannot justify giving a credit card company any of my hard earned money for a ridiculous interest rate.
Unfortunately, we are the exception, not the rule when it comes to wise credit use. Every time I buy something at a store, I am asked if I would like to save 10-15% on my purchase by opening up a line of credit with that company. Are you kidding me, you think I want to save $5 dollars for that hassle? But so many people say yes to that question, buy on credit, and then find themselves owing more and more in interest. Most people do not realize that they are seriously hurting their credit by opening up accounts at all these different stores. When I mention this to the sales associate, they give me a blank stare.
Today anyone can get credit. In fact, this country runs on credit. I often wonder what would happen if all the companies that have issued credit to consumers were to “call the loan due”? I suddenly see “It’s A Wonderful Life” flash through my head, but only much, much, worse. Hmmm, I wonder if it would look like the mortgage industry right now?
Free credit has also come in the form of free mortgage loans. By free, I mean 0% down. For the better part of this decade, millions bought homes without a down payment. That free credit has us where we are today and the loan has been called in for payment. It isn’t a fun thing to have a seller call you saying they want you to list their home, and that they are also are three months behind on their mortgage. But such is the life of being in real estate. There is no such thing as a free lunch anymore, but I guess in reality, there never was.
