The normalisation of credit card debt

Credit card debt has become so normal that we no longer call it debt. It is called a credit balance. Sounds much nicer doesn’t it? This was no doubt rephrased by the credit card industry to normalise debt. In a similar way Kentucky Fried Chicken rebranded to KFC because they didn’t want people thinking of the unhealthy word ‘fried’, the credit card industry doesn’t want customers thinking of the word ‘debt’.

In New Zealand our credit card habits cost us $700 million in interest alone. We collectively put close to $45 billion on our cards in 2018. That’s an average of $24,000 per household. As a nation we only pay off about a third of that in full each month, which leave two thirds attracting a high interest rate.

These statistics show we are not good with credit cards. Some of us can’t be trusted. When the economy tanks and we start losing our jobs, with such high levels of debt we leave ourselves open for financial strife. As Warren Buffett says “only when the tide goes out do you discover who’s been swimming naked.”

Things may seem great now, but eventually we have to pay the piper. If we walk down a hill we have to go back up the hill at some point.

Getting into debt is easy. Getting out of debt is much harder.

If you have been reading my blog for a while you will realise how having money can buy us time and freedom. The opposite is true for credit card debt. All credit card debt does is chain us to our jobs and to the lender. Our time does not belong to us but to someone else. Debt creates stress and it fractures relationships.

Stop normalising credit card debt. It is holding you back from a life of freedom. Learn to live within your means and understand that long term happiness does not come from buying things. No one is impressed by what you buy and it only gives you a short bout of joy before you are back to your starting level of contentedness. By not raking up debt you are focusing on buying time, not material goods. And time is the most valuable thing we can have.



The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here.