Twelve Reasons to Stay in Debt

Written by Nickel - 10 Comments

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This is a guest post by John of Mighty Bargain Hunter. If you like what you see here, please consider subscribing to his RSS feed.

Americans collectively have well over a billion credit card accounts. Some of those accounts make the credit card companies very, very rich. I’m talking, of course, about those that belong to people that carry large balances every month.

Since we’re all familiar with the evils of credit card debt, I thought I’d balance the discussion with twelve reasons why you shouldn’t get out of debt:

  • Those wonderful interest charges. Why on Earth should you earn interest when you could be paying it? It’s a piece of cake: just buy a whole bunch of stuff you really can’t afford and make the minimum payment each month.
  • You get to buy everything twice. Remember that espresso maker that you bought for $120? Wouldn’t paying $240 be twice as nice? It makes your espresso taste… Well… Exactly the same.
  • Fees are fun. Fees for going over your limit. Fees for cash advances. Fees for paying late. Fees for paying on time. The fun doesn’t stop with the interest charges — not by a long shot!
  • Financial independence is totally overrated. Being a slave to your debt has a charm all its own. You never have to worry about being in control of your finances ever again. The credit card companies will take care of that for you!
  • A good night’s sleep is for sissies. Who needs a soft pillow when you could b tossing, turning, and waking up in a cold sweat from nightmares of giant point-of-sale terminals crushing that living room set you’re paying for every month?
  • New friends at the collection agency. Never feel lonely again: collectors will harass and shame you… And your relatives, and your neighbors. Incessantly.
  • There’s no time like the present. You needed that new home theater system right now. Right? Now those bills will be front and center in your finances — and will remain that way for a long time to come.
  • Bargain hunters love desperate sellers. Nothing sound better to a bottom-feeder’s than: “Make me an offer.” Except, perhaps: “I need to sell this now.” You get to watch them salivate and then walk away with your stuff — for nine cents on the dollar, just because you need to make that credit card payment.
  • You’re just a few small steps from bankruptcy and foreclosure. As much fun as credit card debt might be, bankruptcy and foreclosure are way better. Both are two-ton black marks that remain on your credit report for seven years. It just doesn’t get any better than this, folks.
  • Default interest rates rock. The new credit card legislation makes it tougher for issuers to stick you with their default rate, but… When they do, it’s really high. Fall behind on your bills, and you’re the proud new owner of a 30% credit card interest rate. WOW!
  • Every day is a tightrope walk. You get to be extra stressed about your job, about getting having a car accident, about getting sick, and about anything else that could be the final nail in your financial coffin.
  • Someone has to pay for the responsible card users. Who’s going to cover the cost of that free float and all those credit card rewards? It might as well be you. We salute you, Mr. Up-To-Your-Ears-In-Debt Man!

As compelling as these twelve reasons might sound, some people aren’t willing to remain in hock for the rest of their lives. If you’re among them, then you might want to check out the Carnival of Debt Reduction, which is a weekly collection of debt reduction articles from across the blogosphere.

Published on June 29th, 2009 - 10 Comments
Filed under: Debt Reduction
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About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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Comments (scroll down to add your own):

  1. Very funny look at debt, but sadly, very true for many . . .

    Comment by DDFD at DivorcedDadFrugalDad — Jun 29th 2009 @ 9:59 am

  2. I have to disagree, I signed for my CC debts and I’ve payed most of them back, YES I paid interest but I was fully aware when I signed for my purchases. I’ve never really had any other fees since I’m responsible and I make my payments in time. Debt is a tool and can be used positively, just my 2 cents.

    HS

    Comment by HS — Jun 29th 2009 @ 10:22 am

  3. My wife and I have agreed to try to have children when we get out of debt … Depending on the day, that’s motivation to spend like a madman.

    Comment by Steve — Jun 29th 2009 @ 11:23 am

  4. Heh – very humorous. Only one problem with the list – the “free loaders” aren’t actually free loaders so by carrying debt I don’t think I can effectively offset their responsible use of credit cards.

    The fees that the merchants pay to the credit card companies for accepting the cards more than makes up for any rewards or lack of interest charges that that individual incurs.

    Comment by Blaine Moore — Jun 29th 2009 @ 12:53 pm

  5. So true. I hate to think of all the things I paid for over and over again.

    I hate to think of the crazy things I put on credit and paid for for years.

    So glad all that is finally behind me.

    Comment by SingleGuyMoney — Jun 29th 2009 @ 6:37 pm

  6. There are actually good reasons to be in debt.

    For example, in normal years, you can expect to get higher returns in the market than what you pay for your mortgage, which means it does not make sense to pay your mortgage.
    Or you can use leverage to get improve your financial situation.

    I was expecting this kind of discussion or analysis on this post, not more of the same ‘debt is evil’ post. I guess you know better what your audience expects.

    Comment by cg monster — Jun 29th 2009 @ 7:42 pm

  7. cg: This post (which is a guest post, btw) is targeted specifically at credit card debt. As I’m sure you’re aware, you’d be hard-pressed to find an investment that makes carrying credit card debt a good idea. Admittedly, I’m ignoring 0% balance transfer arbitrage here, but I’ve written extensively about that in the past. For a lengthy discussion on keeping your mortgage vs. paying it off, see here:

    http://www.fivecentnickel.com/.....or-invest/

    Comment by Nickel — Jun 29th 2009 @ 7:52 pm

  8. ha ha… I actually thought I might be getting *real* reasons to stay in debt – you know, good debt, etc. etc. funny nonetheless…. I’m imagining what its counterpart for nutrition advice would look like.

    Comment by MoneyEnergy — Jun 30th 2009 @ 2:51 am

  9. I think the most important thing to remember is to think before you buy, but I like your list – it doesn’t make me want to stay in debt I am working hard to get myself out of debt at the minute and currently working full time and trying to make money online

    Comment by trevor — Jun 30th 2009 @ 4:02 am

  10. So, if I read between the lines, you’re saying that being up to my ears in debt is… bad?

    I eagerly await your piece on puppy-kicking. I’ve heard negative things about it, but you know what’d really convince me? An ironic article about all the inappropriately labeled “advantages” of kicking puppies. Sometimes I just can’t understand why something so obviously bad is undesirable until I’ve seen scorn heaped on the imaginary people who favor it.

    Comment by Jesse — Jun 30th 2009 @ 10:28 am

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