Thursday, June 4, 2020

The downside of the credit card culture

The jaded saying, ‘all that glitters is not gold’, is still an apt label for today’s credit card culture.

Behind the facade of fancy designer shoes, bags and suits that people take pride in lies a grotesque obsession with shopping on credit, leading to colossal debt for many seemingly well-heeled families.

Today, middle class families have to bear the shame of unbearable debt and hand-to-mouth living as a result of this culture.

From the days of Bo Derek, a famous television starlet who claimed that those who say money can’t buy happiness simply don’t know where to shop, consumerism has come to be associated with completeness and happiness.

The phrase ‘retail therapy’ has even been coined to suggest that a shopping spree will uplift a dampened spirit and chase away the blues.

From a tender age, a lot of people are often draped with the basic, durable garment or frock. This literally translates to brown, frumpy and downright ugly. It makes economic sense to buy the bare necessities, but it is still the dream of every 8-year-old girl to be decked out in pink lace, white frills and colourful tassels.

With the mothers holding the power (cash), all the girls can do is dream for the day when they will hold the power to lose the frumpy brown clothes for more flattering brightly coloured ones.

A few years down the line, armed with a college degree and the passion to look good, these girls are enticed with easy credit from all spheres of their lives.

‘Easy payments, buy now pay later,’ is just one of the tag lines used to lure these new kids on the block to make terrible financial decisions which land them in debt.

Several years later, broke, blacklisted, but still itching to again own items repossessed, the vicious cycle of consumerism starts all over again.

Credit facilities are easy to access. They are offered by a vast array of businesses ranging from banks, car dealers, clothing shops, furniture stores and even the seedy back door establishments run by loan sharks.

Of course, a credit card comes with a certain convenience. For one, we don’t have to carry wads of cash around, perhaps lessening our chances of being mugged.

Barclays Bank Botswana offers credit card facilities to anyone above the age of 21 who earns from P2000 (net) income. The bank’s Acting Head of Corporate Affairs, Grace Mosinyi, points out the conveniences of having a credit card as security and flexibility as well as the fact that the cards are internationally accepted.

Barclays however says it offers financial advice to its credit card holders not to exceed their limit.

Aobakwe Gofhamodimo of Standard Chartered says the bank urges their clients “to keep track of their purchases, avoid spending outside their budget and to avoid sharing their credit card detail with anyone to avoid people using their credit card and over burdening them with debt”.

Both banks stress their use of in-house brochures and advice from sales representatives to customers regarding spending habits and avoidance of bad debt. They claim to be in constant contact with their customers and monitor their habits and ultimately cancel the cards if a card holder fails to comply with the terms and conditions outlined in the contract made when the credit card is issued.

Despite all this, it is up to an individual to monitor their own spending habits. The use of credit cards by Batswana is relatively minimal, despite the security and convenience of perks that come with it.

The reaction towards the card generally varies depending on age, sex and profession. Many in the accounting fraternity see credit cards as a permanent loan which continues to perpetually charge interest and never ends.

Women in their late thirties admit that having been badly burnt by these magical cards, they snapped them in half and vowed never to look twice at them again.

Most men who are less notorious for questionable spending habits see credit cards less as a threat than a means of convenient buying power.

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