Avoid Easy Debt Triggers

You dump all those fabulous outfits on the cashier's counter. If you sign up for a store credit card, the cashier tells you, you'll get an additional 10 percent off. You never particularly wanted a T.J. Maxx credit card, but hey, what can it hurt? And with that extra 10 percent they're practically giving the stuff away. You've fallen victim to a debt trigger.

Debt Triggers
  • Sales
  • Department store credit cards
  • Catalogs and online shopping
  • Easy credit cards

Another vicious debt trigger: the irresistible (and ubiquitous) catalog. The lovely salesperson on the other end of the line is so warm, so encouraging. "Take two," she says, "size 8 and size 10, just in case." (God forbid you should order the wrong size and just send it back.) She makes helpful "go with" suggestions. And now that she's getting a sense of your taste, did you notice the great trench coat deal on page 39? Only $349 marked down from $700. By the time you hang up, she's your best friend (and you're her best customer).

As if catalog shopping wasn't enough of a seduction, now we've got online shopping. Jewelry, cosmetics, auctions. When I was writing Maxing Out I interviewed a woman who was spending $800 a month shopping online.

She was single and making $50,000 a year, but of course that was before taxes. No way could she afford this $800 a month, but it had become an addiction. She just watched the balance go up on her credit cards and figured some day she'd find a way. Or that she'd start making more money. Or something.

Debt starts early

Going into debt starts young in America. Eighteen-year-olds can get credit cards, especially if they're headed for college. Enter the big hall on registration day, and there are all the credit-card companies lined up in booths, with easy credit on offer. The whole act of going into debt is sanctified by the halls of ivy.

First kids start using the card for textbooks, then stereo equipment and clothes. Next thing, they're asking their parents to bail them out.

Or they put tuition on a card. It seems worth it. It's for their education. But no one's educating them about the false freedom a credit card gives them. No one's telling them what a wrecked credit rating does to their future attempts to borrow for a car, or a house.

The big point about debt is this: it doesn't put you in control, it puts you in chains. You want to be making the decisions about when and what you buy -- and with money that's in your pocket, not money you hope to get in the future.

Credit-card spending plays havoc with rationality. It encourages impulse buying, bad-mood buying, grandiose buying. ("With that $2,000 suit," you tell yourself, "I'll be able to cut a better deal, so it'll pay off. In the meantime, I'll look like a million dollars.")

So, what's a debt trigger? It's anything that causes you to jump, reflexively, for your credit-card holder. Beware, or be square.

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