Tuesday, July 03, 2007

The American Dream On Credit

Overheard in my office:

"I'm living the American Dream: I'm living beyond my means!"

The speaker was joking, but it still spazzed me out. She and another office friend and I were talking about credit card debt--she made fun of me for my tendency to pay off individual charges on my card right after I make them (admittedly, this is overkill), and we made fun of her for her contention that paying something on her debt every two weeks means she doesn't pay any finance charges (they have to issue another statement, she says, which prevents interest from accruing--that can't possibly be true, right?).

This is all in good humor, and I would never seriously try to preach to her about financial responsibility. It's just not my place, and clearly, she's not in a place to start thinking about that right now. And you know, I guess that's fine: people come to things when they're ready, and she's not.

I think our mutual teasing conveys a kind of mutual respect, somehow, and that does seem to me to have something to do with the American Dream.


Addy said...

Actually, she IS right. And even she's underestimating. On most credit cards, if you're not carrying a balance you get a "grace period" which lasts from the day you make the purchase to the due date on the next statement. So let's say your statement closes on the 15th of every month, and your due date is the 30th. If you buy something July 16th, the statement will close on August 15th, and you won't pay a penny of interest until August 30th. You could be earning 45 days of extra interest on that money, and not pay the credit card company an extra penny.

English Major said...

addy, you're right about that, but she is carrying a balance.

Addy said...
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Addy said...

Yep, then she's paying on her average daily balance, which increases with every day she's not paying it off. That could get expensive.
Keep up your good work, and your openness to other people's opinions and ways of doing things. Sometimes I see people that are really into finance that consider everyone that doesn't do the exact same thing they do stupid. I say live and let live - everyone's got their own way of doing things and their own reasons for it, and I, for one, can respect that.