Skip the plastic if you have trouble controlling your spending


The rise of credit card debt overseas has important and familiar lessons for us here at home.

For many years, I spoke about how debt was a uniquely American disease, how we alone among countries in the world lived a debtor’s existence. That turned out to be false. It’s just that we were first.

The easy availability of credit happened here before it happened anywhere else. Yet as one country after another made debt available, its citizens followed our path instead of learning from it. South Korea, England and Canada are prime examples.

Now comes word from BusinessWeek that credit card debt and delinquency is growing in Turkey of all places! It’s become such a severe problem that the government is now restricting the use of credit cards in an effort to clamp down on this form of payment that accounts for a third of all spending in Turkey.

The amount of balance that individuals are carrying in Turkey is reaching the “vicious cycle” point, where people can’t make their payments on time so they get hit with penalty interest rates of 29%. Where have you heard that before?! Same story, different country.

There’s something wired in many of us that if we are given permission to borrow and spend, we will. The immediate gratification of having access to the ability to buy what we want instantly is so seductive that a lot of us get ourselves in over our heads.

So here’s the takeaway for you: If you know that given the plastic you will spend, you must live on a cash basis and turn away from credit. Period. Doing so will create a lot more security in your life, a lot more sanity.

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