How to solve (a part) of the consumer credit crisis.
How many times have you signed in online, or reluctantly opened a credit card bill only to swear that someone must have stolen your credit card?
Well, if my guess is right, then I’m not the only person shocked and appalled over how quickly a credit card bill can accumulate. No one emphasized this better than ‘Rebecca Bloomwood’ from the novel/movie aptly titled, ‘Confessions of a Shopahalic.’
My solution: Every time you swipe your card, your balance/total amount due for the month should be shown on the credit card machine (or even printed on the receipt for restaurants, etc). You wouldn’t know your overall debt until after you make the transaction, but it will at least be able to provide a routine reality check. It may convince you that this is indeed the last pair of shoes you will buy this month, or maybe even push you to later return the item, but either way- it makes your debt more immediate and real. It would no longer be something you put out of sight and out of mind until the end of the month when things are too late to change or prevent.
Possible pitfalls: I don’t have any insider information on the electrical infrastructure to a credit card machine, but I’m pretty sure that if a machine can decline your card, then it can access the amount currently due. It would be my hope that there would be no need to drastically change the existing infrastructure, therefore easy to implement.
The social repercussions. If the customer behind you in line catches sight of your credit card balance, they may pass judgment depending on the number. However- there is not enough information to be embarrassed over. Observe.
1) If your balance is astronomically high, then the other person may simply assume that you spend a lot because you have a lot.
2) If your balance is next to nothing, then it can be assumed that you just paid off your bill, which simply makes you a responsible (and hopefully average) person.
The only source of possible embarrassment is if your card gets rejected, which would happen regardless of what I am suggesting. And of course, the above scenario is only if the person behind you can see the screen or your receipt, which would make them nose-y, and therefore not worth your time.
Part of our current economic crisis is the fault of the American consumer spending beyond their means (… and yes, Mr. Bernie Madoff is still a bad bad person). Or regardless of your means, we may live beyond what we need. I once had a teacher who told our class that his entire life he has paid for everything in cash- car, home and all. You know exactly how much cash is left in your wallet after you drop $50 on dinner. Individual credit card spending- your money and debt- needs to be more tangible.
Over the past few months I noticed that many credit cards are trying to implement solutions to over-spending by breaking down cost or tracking how much of your money goes where. We’ve all seen the ‘credit fairy’ commercials and I’m pretty sure I saw a commercial that emphasized responsible spending and was not backed by any company (so I assume a branch of the government paid for it?). However, companies may not appreciate the ‘act of enlightenment’ I’m proposing. Why would they like something that discourages a sale?
Or maybe I’m talking about things I really know nothing about. Or maybe there is already something comparable to this in place, and I just haven’t come across it yet. Either way, I think it would help people like me, who can easily get carried away- despite always making my payments on time and in full.
I can’t tell you how many times I’ve gone through my monthly statement with my own calculator after not believing the total. Needless to says, the $70s there and the $15s here certainly add up to a surprise- even the $3 coffees strike hard. I’m not blaming the credit card company, I’m blaming my own poor perception. At least give me ‘credit’ for admitting my faults and trying to find a way to fix things without fixing myself 😉