In 1950 a group of diners met for their regular meal at a restaurant close to where they worked in the Empire State Building, they were tired of always carrying cash around and so together they created the first charge card.
Little did they know that this Diners Club’ card would eventually evolve to a billion dollar multi-company financial industry, whereby the majority of the people in the world, would become dependent on stuffing their pockets with plastic money.
From that first simple charge card came the credit card. Now to the horror of the older generation who still today believe in saving your money in order to buy what you want, came the opportunity to have everything you want NOW. Buy now, pay later became the trend and life went along with no problems for some years but as credit interest rates began to grow, then consumers began to have difficulties paying back what they owed.
Checking accounts became slow and tedious when out shopping and with modern technology invading our malls, it suddenly became easier to swipe our cards. However that debt was beginning to increase our credit card balances. We had to look at ways of managing our financial accounts.
Debit cards have been around for about 20 years, but it is only recently that they have started to attract more attention. It is a proven fact that when out shopping a consumer will think more carefully about purchasing items when they know the money is taken directly from their bank account, as against ignoring their ever increasing balance on a credit card.
Today we have begun to realise that we have to start putting our finances in order. All too often you hear the term, my card is maxed out’. One way is to pay a certain amount off your credit card each month and totally avoid any temptation to use it. Then shop only with your debit card to pay for all other expenses. The big advantage with your debit card is that you cannot charge above the limit of your bank account.
Debit cards nowadays are just as convenient as credit cards for usage. You can pay in shops, by phone, over the Internet. Plus the additional bonus that as the money is deducted straight from your account, there are no interest charges on these transactions.
I would never suggest that we return our credit cards, in life there will always be that unexpected emergency and if you have managed to reduce your balance then you will have funds available which could cover the inevitable.
But for day to day living maybe it is time to respect our elders and realise that overcharging to our credit cards and then having to pay out all those exorbitant fees each and every month, is money that you could use elsewhere.