recreatingreality.com

Today the government plans to announce backing for credit card issuers, hoping to make credit easier for all of us.  In other words, we may begin seeing a few offers for credit cards coming in the mail soon.  We don’t expect to see the weekly deluge we saw over the past few years, but it is obvious that credit is going to loosen up for some of us.

What does this mean?  It means that the government in the midst of the financial crisis is worried that you and I aren’t shopping as much.  This is forcing prices down across the retail market.  When we don’t spend, prices are forced down.

If you have been following our plan to reduce your credit card debt, now is not the time to change your plan.  Continue to pay down your debt.  Don’t spend money you don’t have.  While each of us is aware that times are tough, you may soon be faced with a choice.  You can continue to pay down the credit card debt you have accumulated over the years or you can go back to your old spending habits.  We strongly suggest that you stick to the plan.

Credit card debt has caused many Americans to live beyond their means.  For some we have accumulated so much debt that when we die, the credit card companies will be paid before our children have a chance to claim their inheritance.  That is an extreme example.  But, think about it for a moment.  Do you want to leave your children to pay off the debt you are running up?  It could happen.

Without a doubt, our financial system needs a stimulus.  People like you and me spending money is one way to stimulate the economy.  Our position is that there will be enough people who continue the old ways of shopping.  There will be people who grab the first credit card that comes along and go shopping.  You do not have to be one of them.  Loose credit is a way to get all of us back into the game.  But, we suggest that rather than jump into the pool with everyone else, you continue to bite the bullet and pay down your present debt. 

You will have plenty of time to shop when you have money, real money… not borrowed money.  While we are all worried about the economy, we believe there will be enough shoppers with credit cards to keep the economy rolling. 

Now is the time to take care of yourself and your family.  Take advantage of the times.  Buy what you NEED, but don’t buy everything you want.  Pay down your credit card debt and continue to put a few dollars into savings each week or month. 

If there has ever been a time to get your house in order, it is now.  Once you have your debt under control, you should never spend more in a month than you can pay off when your credit card statement comes.  Remember, interest rates on credit cards go up to 29.9%.  You will never earn that much on your savings.  Don’t go further into debt by continuing to finance the operations of the banks.  It is time to concentrate on financing the operations of your family.

So, consumer, beware.