THE LURE OF DEBIT/CREDIT CARDS

Hi friends,

I remember an incident when I was working in south India in the 80s. As we were living within the factory, the company provided a bus both in the afternoon and evening to go to the nearby town to do the shopping for the family. I went on the evening bus with my wife. We used to buy items from different shops.

In every shop, my colleagues maintained a notebook wherein the purchases were noted and the payment was made at the end of the month. I did not opt for the notebook and I bought all the items against cash. The shopkeepers used to insist on a notebook but I politely declined. When my wife inquired, I told her the following reasons.

1. By paying cash, we are able to plan our purchases.
2. We carry only the cash required for purchase.
3. We can return any excess purchase.
4. We are not tempted to buy unnecessary and unwanted items.
5. We have the freedom to go to any shop.
6. We need not compromise on quality or quantity.
7. We have the option to negotiate the price and discount.
8. Any fraud by the shopkeeper in the notebook cannot be noticed.
9. We have control over the expenses and we can save.
10. We do not get any shock at the end of the month on seeing the notebook.

All these benefits are lost by using the notebook. Many people spend beyond their income and suffer by not being able to clear the loan. Just because a person is getting a good salary, it does not mean he can spend lavishly. After all, the salary is linked to the cost of living. Now in the place of the notebook, the bank is issuing debit/credit cards. Everyone is having a card. It has become a status symbol. People laugh at you if you don't have a card. No one carries cash.

In the case of a debit card, one must have a bank balance. His purchase is debited to his account. In the case of a credit card, the bank fixes his borrowing limit based on income. There is no interest for a certain grace period. After the grace period, the interest is high. But the bank also collects commission from the person providing credit. How people are lured by this? How they have fallen prey? Is it good for the individual/society?

Previously it was a savings economy. People were advised to save. Now it is a spending economy. People spend lavishly on credit. Everywhere, people talk only about principle, interest, EMI, etc. One can go for a loan only for long-term investments like housing, education, etc. but not for daily expenses, fancy and unproductive expenses. 

To meet such expenses, one looks for various ways of increasing the income leading to corruption, thereby losing peace of mind. Spending within the income and earning what you want to spend is quite different. The latter leads to unethical ways, indebtedness, and corruption. Fortunately, according to statistics, India has the lowest percentage of people having debit/credit cards.

I am an old goose and conservative. I do not have any cards including a postcard. I do not have an Internet phone. I do not have access to WhatsApp, Skype, etc. I do not understand the modern approach to life. I believe old is gold. Work hard, earn to your capacity, lead a simple life within the income, invest for the future should be the motto. MAY GOD BLESS YOU.