Today, there is a huge debate about whether exposure to plastic poses health risks. But there exists still an even bigger problem with a different kind of plastic exposure, already proven to be hazardous to our wealth. I'm talking about the kind of plastic we carry in our wallets.
Convenience Factor. Most people begin their relationship with plastic on what I call terms of convenience. They have enough money in the bank to pay for groceries or gas, but it is just so much more convenient to swipe a card. And the monthly statement offers such a tidy record of transactions. It is so convenient.
Then comes the time when the bank balance is a bit low and the perfect shoes are on sale. Can't pay the entire balance when the statement comes? Not to worry! Because of the minimum payment option, you can pay a small amount and buy yourself another 30 days. Such convenience.
A pattern of revolving balances and growing debt begins. All for the sake of convenience. Instant gratification. Painless accumulation.
Coma Factor. Convenience quickly leads to mindless or "coma" spending. There's no conscious thought of the real cost. Coma spending allows you to think that a $200 purchase is a $20-a-month payment starting next month. But right now you can take your purchase home for no cost.
Take gasoline, for example. If you used your ATM or credit card, you probably don't have a clue how much you paid per gallon. As long as you have the security of plastic at your disposal, nothing else seems to matter.
Cost Factor. The actual cost of plastic dependence when added up over a year's time is staggering. There are annual fees, late fees, over-limit fees. But the mind-blowing "fee" is the interest cardholders pay for the convenience of buying now and paying later.
Though statistics vary greatly, a conservative approach says the average American family with credit cards carries about $16,000 in unsecured debt on which they pay more than $2,000 in interest each year.
There's only one way to discover if you have become inappropriately dependent on plastic: Live without it. Here is my challenge. For the next 30 days, no debit-card purchases; no credit-, store- or gasoline-card purchases. None. Nada. Zilch.
For one entire month, it's cash only. If you don't have cash in hand or in your checking account to buy something, don't buy it. If you must purchase something by mail, send a check. If you need to rent a car or secure a hotel room, arrange in advance to put up a cash deposit.
If at the end of the 30 days you find that you have become plastic dependent and want to break that dependence, I have a suggestion: Put all of your plastic in a sealed envelope and then put it far away in a safe place.
The bottom line is this: If you want to take back control of your finances, you must make spending as difficult and uncomfortable as possible.
Mary Hunt is the founder of www.DebtProofLiving.com and author of 20 books, including her January 2012 release, "7 Money Rules for Life." You can email her at firstname.lastname@example.org, or write to Everyday Cheapskate, P.O. Box 2099, Cypress, CA 90630. To find out more about Mary Hunt and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.
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