Debt makes the world go round

Recently, as in last week, I did something I didn’t think I would ever do. I applied for a credit card. Given one part of my family history (a pathological inability to be responsible about money), I have never been keen on any sort of debt instrument — I see it as a deep, dark hole people can fall into and never get out.

However, modern industrialised economies can’t run without debt, and if I ever wanted to buy a house and get some sort of mortgage, having never had a credit card and thus no credit history would make approval nigh impossible.

So I called my bank and went through the procedure (apparently my operation of my current account has been ‘perfect’). I have applied for the (ready for the awwws?) SSPCA credit card, which donates a sum of money the first time I use the card, and a teeny tiny amount (0.25%) on every purchase thereafter. When I mentioned I wanted the SSPCA card and not the normal card, the bloke on the phone said, But the interest rate is much higher than the ______ card. To which I responded, Well, if I use it I’m going to pay the balance off immediately, so the interest rate doesn’t matter.

Banks hate people like me. They like people who pay only the minimum balance on their credit card statements (and so I am going to plug this sponsor this one time because they say, “One of the biggest mistakes that can be made is by keeping to the credit card minimum payment. This can be devastating to your finances and should be avoided at all costs.”) and go for interest-only mortgages (and what is the bloody point in that? After two decades of paying a mortgage, you still owe the entire principal? How can that look at all attractive to anyone with half a brain?).

I do, however, have a problem with a sentence in the Loans section: “Taking out a loan can in many circumstances be the best and easiest way to raise some cash to spend on your dream holiday or a new car.” One should NEVER encourage the extension of debt to finance a holiday. If you can’t afford a holiday, DON’T TAKE ONE. If you have leave to take, take the time off and stay at home. I just spent four days bumming around and it was GREAT. Or find a local and affordable break.

The Thrifty Scot is a site about saving money. While it is not as comprehensive, IMHO, as other sites like The Motley Fool (which also does comparisons), it appears to take a more accessible approach, and I’m all for the one-man show.

This post is sponsored.

• 10 Apr 2007

• Thinking