Neon Warnings

Living within one’s means (spending less than earning) must be learned and practiced. It takes discipline.

We have discussed bankruptcy and the reasons NOT to declare bankruptcy. It is a ‘Last Resort’ option. Leave bankruptcy to the airlines.

Some might consider a ‘debt consolidation’ loan. This also is NOT a reasonable option. There are two reasons not to get a debt consolidation loan, one Biblical, and one practical.

The Biblical reason is simply, sin is sin. God NEVER tells one to sin. Paying the consequences of sin by sinning makes no sense. Mark 3:23, “He called them to Himself and said to them in parables: ‘How can Satan cast out Satan?’”

The practical reason is also simple. IF one has not learned to live within one’s means, and one has not learned not to buy on credit, then all one is doing is digging a deeper grave. Many times people have gotten ‘debt consolidation’ loans, paid their credit cards to a zero balance, and then proceeded to run up their credit card debts again. All they end up with is another slaver 'owning' them. [Personally, I originally thought debt consolidation was a good idea. I found a credit card company that would allow the transfer of balances from other cards and had a high limit. I transferred the balances so I could close the accounts. The plan backfired. I found myself using the old credit cards again, as well as the new one. I had not learned any lessons; all I did was add another slaver.] From a Biblical, practical, and personal standpoint debt-consolidation does not work!

Stop using credit cards. Stop spending more than one earns. There are very few people using credit cards that actually pay off their entire balance each month. It is very tempting and easy to ‘let it ride’ for a month or two or ten. One may say, “I don’t like carrying cash.” One may say, “Writing checks is too much hassle.” Those are both understandable objections although having to write a check is a good time to ponder the necessity of the purchase. There is a reasonable solution, but it comes with two BIG FLASHING NEON WARNINGS.
The reasonable solution is to use a ‘debit’ card. A debit card, available through most banks, is a ‘logo’ card with the Visa® or Master-Card® symbol. (I like the name ‘Master-Card®’, its very name tells one who is master and who is slave.) A debit card (without a credit-line) uses the amount in one’s checking account as the credit limit. This is not a bad alternative to carrying cash or writing checks...BUT there are two big warnings.
First, numerous studies have shown that a person using a charge card (debit or credit) spends an average of 30% more EACH PURCHASE, than a person paying in cash. [Casinos use ‘chips’ instead of cash for this very reason. If a person had to put down a $5 bill every time they made a bet, they would quit much sooner.] Using a debit card requires more discipline to remain thrifty and frugal. The 30% additional on each purchase is ‘black-hole’ money, it is gone and one has a hard time finding it.
Second, one has to maintain good records. Use of a debit card is an easy way to overdraw an account (it is treated the same as bouncing a check). One must record every transaction ‘religiously’ in order to avoid this pitfall. One must keep a ‘check register’ on debit cards because it is drawn from a checking account. Failure to keep accurate records and overdrawing an account has serious consequences. If one decides to use a debit card as a tool to live within one’s means, one must be responsible in its use.
The advantages and responsibilities of a ‘debit’ card should be weighed carefully.

®Visa & Master-Card are registered trademarks of their respective owners...Slavers