Observations on Debt

Besides my love of this guy and crafts, the other thing I ponder a whole lot is debt. After a very inspiring conversation this evening with a long lost college writing-class-mate, I’ve decided it’s time to get started on a project I’ve been putting off – writing about debt. So to get started, I’m posting this essay that I wrote last summer. I never did anything with it at the time, but this post will serve as my declaration to myself that I’m going to write on this topic more.

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Observations on Debt
“Are you going to pay for this with your Macy’s?”
I enjoyed how the cashier took the words “credit card” entirely out of the transaction.
“No,” he replied, “I don’t have one.”
“Oh,” she perked up, “would you like to open an account today?”
“No, thanks,” he quickly replied.
“You’ll save an additional 15 percent,” the words rolled off her tongue laced with temptation.

I knew my brother wasn’t fazed by this, but I had to put an end to the volley. “He’s too young to have a credit card,” I stated politely with a touch of reprimand.

A few weeks shy of 18-years-old, I would hate to think that my brother could get into debt before he’s even out of high school. We chatted about credit cards a bit on our way out of the store. He said that one of his teachers told his class that she got her first card during orientation weekend her freshman year of college. In fact, his teacher and I were friends in college, and I know exactly when she got this credit card. As part of orientation each year, many of the local businesses come to campus to greet the new freshman class. All of the banks come out, of course, with checking, savings and credit card account offers.

For some reason I have this notion that the bank – the place where all your money comes and goes – should have a vested interest in your financial well-being. I feel like they should be the voice of reason and should help you stay on the straight and narrow. I have no idea where I came up with this notion because it is clearly not the case. Anyone who offers a credit card to someone who has been out of their parents’ house for a mere 24 hours clearly doesn’t care about that person’s future one bit. I didn’t sign up at the orientation, but it was, in fact, my bank that got me.

I can’t even remember why, but for some reason I decided to switch banks my senior year of college, and in the process of setting up my new checking account the customer service representative offered me a credit card. Miraculously I had managed to get by without a card for the first three years of college, though I hadn’t managed to get by without debt. I had taken student loans for my sophomore, junior and senior years. I finally agreed to the credit card because I was a few months away from my first trip abroad. I was headed to Ireland for several weeks with the English Department. The credit card was a good idea at that time. I don’t regret getting it. When you are traveling, you never know when something might happen, and since I was juggling paying for school, all my living expenses and the trip itself, I really needed that safety net.

Since I was at the bank to open an account and I was actually talking to the customer service representative the whole thing didn’t seem too intrusive, but I witnessed an appalling conversation a few days ago. I was at the teller’s window and in the line next to me I heard another teller ask a young college student if she’d like to open a credit card account. The student firmly replied, “No.”
“Well do you travel a lot?” the teller asked.
“Yes,” the student reluctantly replied.
“This credit card has special offers for travel. It will save you a lot of money.”
“I get student discounts when I travel,” the student replied.

This went back and forth for a few minutes and I wanted to just yell “RUN!” to the student. She managed to hold her own and escaped unscathed. I felt violated on her behalf though. I mean, really, you’re trying to deposit a hard earned check, but you have to step gingerly around these aggressive offers just to make the deposit so you can pay your bills.

I did witness something refreshing last night though. I’ve seen plenty of TV shows about 20-somethings who have financial troubles. “Friends”, for instance, was full of episodes where Joey was unemployed or Rachel didn’t have health insurance or Monica took a job she didn’t like because she needed the work. And even non-twenty-something characters on other shows have money problems, like Carrie Bradshaw realizing that she bought enough shoes to equal a hefty down payment on her apartment.

I have never, however, seen a show that takes on the topic of debt until last night. In the TBS series “My Boys”, Stephanie’s car gets towed. While at first she puts up a front that it’s some sort of mix up, she finally confesses to her best friend, PJ, that the car, a BMW, was repossessed. PJ tells Stephanie she can loan her some money, but when Stephanie asks for $5,000 PJ is totally taken aback.

“$5,000?! You’re $5,000 in debt?” she exclaims.
Stephanie explains that she is not $5,000 in debt, that’s what she needs right now to get herself out of trouble. After much coaxing, she finally admits that she is $22,000 in debt. PJ quickly changes her tune from freaking out to compassionate friend. She reveals that she too had financial worries several years ago when they first got out of college. With advice from her older brother she was able to pull herself out of the hole and she knows that Stephanie can do the same. After meeting with PJ’s brother, Stephanie agrees to change her lifestyle. She decides that she’ll quit going shopping, she’ll get a less expensive car, she’ll go out less and the big kicker – she’ll move into a smaller, less extravagant apartment. Once the move is complete, Stephanie gets PJ to reveal how much she had been in debt. How deep a hole did she climb out of?

“Seven,” says PJ.
“Thousand?” It’s obvious Stephanie doesn’t think this is a huge number.
Sort of sheepishly, PJ replies, “Hundred.”

While Stephanie explains that their situations were entirely different, PJ makes clear that even seven hundred dollars deep was enough to freak her out.

And that brings up another point. Deep is a relative term. I was recently privy to a conversation between a co-worker who is my age and a co-worker who is nearing retirement. The 30-year-old, over the course of the conversation, revealed that he has over $100,000 of school loan debt and that doesn’t even include the debt that his wife has. With two kids, two cars and a mortgage payment, they aren’t paying anything on these loans right now. They simply can’t afford it. My heart sank for him and I wondered if they also have credit card debt on top of this. And I wondered how frugal they live. With my own debt about a third of the amount he mentioned, I literally could not imagine living with $100,000 hanging over my head. I think I would be a basket case all the time. I’m already overwhelmed by my much smaller amount. Probably the fact that I feel this way is a good thing though, and I feel accomplished about the significant dent I’ve made over the past year. My co-worker, who isn’t making payments, almost seemed nonchalant about his amount.

Debt is so common that some people don’t seem to understand the magnitude and long range effects of it. At the same time, debt is so taboo a topic that people don’t talk about it in specifics very often. Maybe if everyone had a friend like PJ, who made them verbalize exactly how much debt they have, then they’d think twice before swiping that card next time. Because it’s taboo there’s little or no accountability. When you date a jerk everyone knows, and hopefully your friends challenge you to rethink your choice. When you swipe that card too much no one knows and therefore you don’t have to feel any shame about living beyond your means. Funny that a sitcom, and not the bank, would provide a reminder that debt shouldn’t be taken lightly.

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