Tuesday, June 1, 2010

I Steal From the Poor, and You Can Too!

My wife and I have one credit card between the two of us. We have one other fallback card in the event something goes wrong with the first one, but 95% of our day to day expenses get slapped onto plastic. I use it for gas. For getting a soda at Sebbin Lebbin. For groceries. For pretty much everything.

Then, at the end of the month, we pay it off. Every last dime. In the nearly 20 years we've been a joint socioeconomic unit, we've paid credit card interest precisely twice, and that was just because we'd flaked out on paying the bill on time. We don't use our "credit." We just use it to make life a little easier. That's largely because incurring debt at obscene, usurious interest rates for day-to-day expenses is worth steering away from. And yeah, it is usurious. When bank CDs are paying out 2%, mortgage rates stand at around 5%, and interest rates for credit card debt are between 10 and 20%, that's taking advantage.

Here's the thing that gnawed at me this week. Our primary credit card is a "benefits" card, meaning we get a small percentage of our costs returned to us in the form of gift cards at a range of different retailers. Because all of our household expenses are channelled through this one card, that starts to add up, to the tune of several hundred dollars a year of free stuff.

Only, like most things in life, it isn't really free. Those benefits are, for most human beings, the thing that makes them look at a credit card bill that significantly exceeds their monthly income and say, "Awesome! Now I can get a $50 gift certificate to buy even more crap I don't need!" Those people ultimately get punished economically. They tend to be less educated, or young, or struggling.

So as I looked at the nice little benefits balance that's build up for us over the last few months, my reveries about new speakers or a nav system for our van were interrupted by the pesky voice of the Spirit. Where does the money that makes those benefits possible come from?

It comes from the single mom who maxed out her cards a year ago when her son broke his arm. It comes from the twenty something who dug himself into hock trying to live the lifestyle the world told him was his birthright, and now lives in mom and dad's basement while climbing a Sisyphian mountain of credit card debt, school loans, and a loan for that Camaro he thought might get girls to notice him. It comes from that family that two years ago went from two incomes to one, saddled with a mortgage they could no longer afford, with their savings burned through and plastic the last, razor wire rope slipping through their hands to as their hopes for the "good life" sail away into the darkness.

Those benefits aren't just given because I'm such a great customer. They're a tiny shaving off the top of a giant mountain of profit, repackaged as a little taster offered up by your local pusher. Enjoying them without falling into debt may well be my cut for being wise as a serpent. But for some reason, I no longer feel as innocent as a dove.