Do Credit Cards Help You Cheat?
April 14, 2009 by VideoCreditScore-Andy
Filed under Episodes
Many authors have talked about why we fool ourselves when it come to credit cards. After all, it’s really a 30 day free loan, and in theory it should be a losing business model. However, that’s not the case, as a multi-billion dollar industry has proved.
Unlike other theories, this video really helped me understand the issue at a behavioral level. Watch this TED clip to get the background.
It turns out we can trick ourselves into believing our cost is lower as we aren’t using cash. The fact that people will steal Cokes so easily but not take plates full of cash is indicative. His analogy of why people feel they can steal a pen from work so easily, yet they wouldn’t steal actual cash, shows us that people can weight different measures differently.
What should you do? You’ve got to visualize that credit cards are cash. One way to do this is to switch to debit cards for a month. See how you “check” yourself before you spend. Then, switch back next month. If you get out of the good visualization habit, then switch back again. Do whatever you need to do to keep this up.
Next, don’t succumb to peer pressure spending. This is easier to do right now as the pressure is to save – thanks to our economic conditions.
Remember that credit can be a virtuous or a vicious cycle. It’s best to start watching your credit score as that will often serve as a reminder to you and keep you on the road to better credit management.
South Park Explains the Credit Crisis
April 7, 2009 by VideoCreditScore-Andy
Filed under Credit News
South Park did a great bit on the credit crisis….”and it’s gone”. The continuation of this episode can be found via this link http://www.breitbart.tv/?p=305583
Stan first tries to deposit money in his bank and it’s gone in a few seconds. Next, he tries to return a Margaritaville which was purchased by his dad who is a victim of mindless consumerism.
Once at Sur La Table, he learns that he’s not “abla” to return it. He learns that the Margaritaville mixer was purchased on a finance plan, so he goes to the big Orange finance company to get a refund. The Orange finance company explains the securitization of Margaritavilles. There, he’s directed to Wall Street.
The wall street guy explains he must go to the Treasury to get his answers. By consulting the chart, the Margaritaville is given a value of $90MM which Stan knows is ludicrous.
The sketch ends with a decision around what to do about another insurance company that’s going under. The solution: Bailout.
