I bumped into Haider, a long-time acquaintance at a supermarket checkout stand recently. He was just ahead of me, and when his turn came to pay for his purchases, I noticed he pulled out a credit card to settle the bill.
“Haider, isn’t that a bit dense, paying for your groceries with a credit card? Why don’t you just use a debit card to settle matters?” the writer in me wanted to know. “Why bother yourself with monthly dues and extra bills which you can do without?” As we walked out of the store, he took me aside and explained. “Tariq, it’s a few days till the end of the month when my salary is due, and frankly I’m low on cash. After paying rent, my car installment, monthly payments on furniture I bought recently and other bills, it’s been a while that I could stretch my salary all the way through to month’s end. And with today’s rising prices, my wallet has really taken a beating. Credit cards pull me through these times, and I don’t have to pay except a minimum charge.”
Now I know Haider and he holds a prominent post at a national company. “But surely Haider, your company isn’t paying you peanuts, and the rollover balance on your credit card will not do you any good. Especially on goods long purchased and consumed. You will be paying for this forever!”
“I know, I know, but I feel so trapped now. Just recently, a bank called me and offered a new set of credit cards if they could transfer my existing balance on several cards I have. Tariq, I have several credit cards and they’re all maxed out. This bank claims that this move would help manage my various monthly payments into one small sum due to them. I think that would relieve some of the financial pressure.”
“Haider, you know you’re jumping from the proverbial frying pan into the fire if you do decide to go ahead with such a move. If you haven’t managed with your existing credit providers, what makes you think that such a move would help you any more?”
Advising him to get some credit management counseling was on the tip of my tongue before I realized that we do not have such a facility that I know of, and I just wished him success before parting.
Credit marketing has been growing significantly lately in the region awash with oil money. Unfortunately, it has turned more into an exploitation of most salaried individuals who are lured by the quick and easy ways to acquire just about everything, and more often items they can do without.
Banks dispatch their representatives to your office door with swift sign-up forms in hopes of getting you on board, or else you get bombarded by telephone calls from their sales agent. In their quest to sign up anybody with a monthly income, our banks have failed to serve this society in a responsible manner.
Our society had operated for a long time under the “pay as you play” concept.
If you didn’t have the money then, you either had to forget about it or else set aside something monthly until you collected the full balance. There was no easy money for quick access to material things that in some cases were not a necessity. But in competing with the rest of the world, our banks have today made it possible for one to practically hock away his future for all things desirable. Credit is well and good used wisely. But the growing number of those complaining of the monthly credit squeeze indicates that “easy money” is taking its toll.
And it’s not just banks.
Almost any major retail establishment you visit has set up or contracted credit-facilitating agencies to ensure that you do not leave their store without purchasing the newer and bigger and better whatever.
What makes it more alarming is that our educational institutions do not prepare the fast-growing youth population of this country, which today is the dominant bloc of residents to be credit savvy.
In our quest to play today, will personal bankruptcies and chapter 11’s follow next?
