Have you ever paid interest on a credit card? Like, ever?
Graham Hicks hasn’t. Just ask him. (See video below)
But I’d venture a guess Graham is probably amongst the minority of adults who hold that potentially-potent piece of plastic. We all know best practice when it comes to credit cards is to pay them off in full every month. No exceptions. But let’s be honest, once in a while the balance carries over. In fact, sometimes it starts to pile up. We’ve all heard stories (often via late-night infomercials) of unfortunate souls who’ve racked up so much credit card debt they can barely make the minimum payments. In such a circumstance, basic mathematics show what amounts to a life sentence of debt. It could be 30 or 40 years before that balance is actually cleared.
If such a fate wasn’t warning enough for everyday spenders like you and I, there’s Bank of Canada governor Mark Carney’s straight talk about interest rates. Speaking to the Economic Club of Canada in Toronto on Monday, Carney cautioned low interest rates could mislead Canadians on their capacity to manage month-to-month expenses.
“Cheap money is not a long-term growth strategy,” Carney warned. “Experience suggests that prolonged periods of unusually low rates can cloud assessments of financial risks.”
In other words, when interest rates inevitably rise, those “rolling deep” could find themselves in serious trouble.
Back to Graham Hicks (and his unsolicited on-air inquiry/assessment of my personal financial situation – see video below). I find it hard to believe the majority of Canadians are wilfully driving themselves into debt. But there’s no denying the fact we’ve become a culture accustomed to options like “Buy Now, Pay Later.” I also belong to a generation that doesn’t flinch at 5-figure student loan debt and $300,000 starter homes. For the most part, it’s all we’ve known.
So…is debt inevitable?
There’s no easy answer, except to suggest “spend less than you make.” Simple, right? I guess until the car breaks down. Or Christmas hits. Or any other myriad of financial challenges arise, forcing us to search for creative ways to stretch our spending bucks.
I’m not saying I’m going hungry this month. I’m also not saying I’m flush. I count myself somewhere in the middle. My name is Ryan…and yes, I have paid interest to a credit card company before. How about you?
rpj.
Well played Ry. Great television. Looking forward to our next trip in a few months (paid for with cash by the way)!
December 14th, 2010 at 4:12 pmNever. Had my CC 6 years now, and every month the full payment (plus a little extra if I know the following bill is a bit higher). Sometimes it’s on the last day because I forget… but never carried over
Interest on a CC is 100% avoidable if you plan and spend accordingly. I accept that some people might let a balance go here and there – but should be paid off ASAP if that happens… days, months.. but no more than half a year! Bank loans have a lower rate than cc companies – so pay off the cc and pay the bank. Case closed. You’re welcome Jespo.
December 14th, 2010 at 4:20 pmWell, you solicited it. I think people can be wholly unrealistic about what they’re “entitled” to, claiming it’s a necessity to own a smart phone, new SUV, tropical vacation, new home (with stainless appliances and granite of course), and nice furniture. It isn’t realistic to own all of that without having worked for a while, saved some money, and found a partner to share one’s life (and finances) with. So, you make do with less stuff, or go into debt. Simple as that. You can’t claim that it’s harder today. It’s just that expectations are higher.
December 14th, 2010 at 4:28 pmRyan Jespersen – you are pure class. Well managed interview, well stated argument and all while well-within-your-rights to lose your cool! Well done!
December 14th, 2010 at 5:57 pmWell that was an annoying man to listen to. Its amazing when older generations cant recognize that its a little harder to come up with the cost of houses these days than it was 20 to 30 years ago. He seemed pretty hung up on the fact that you don’t have kids right now. Well I have two kids and I say its pretty much equally as impossible to come up with $600,000 for me as it is for you.
It shows that there is a really big separation between people like that and the reality that the rest of us live in. And bringing up the example that other countries don’t have access to debt like we do, and glorifying it as a good thing, is ridiculous. One of the main reasons that 3rd world countries stay poor is that people don’t have access to any sort of loans to give themselves the cashflow they need to explore their business options. They cant get ahead because they aren’t given the option to invest future earnings into projects today. True you can get yourself into a heap of trouble when you do that, but I know that I would have never been able to start up my own business without a little help from credit cards and loans.
Well handled Ryan…I probably would a verbally slapped that smug look off of his guy’s face.
December 14th, 2010 at 6:36 pmMr. Hicks’ line of interrogation was inappropriate, ungracious, and bullying. You handled the situation as graciously as you could, but didn’t back down. Good on you.
December 14th, 2010 at 8:03 pmwell handled, Ryan! I guess he makes his living having a smug opinion but it seems he would just as likely do this to “friends” at a dinner party.
December 15th, 2010 at 9:07 amNot all of us live in la la land like Mr. Hicks, who by the way is well used to fancy (free) dinners, entertainment etc thanks to his career. Most people are working Joe’s and struggle even in the best of times. With inflation far outpacing wage increases over the past 20 years, non-baby boomers (Gosh, when will they all just retire and go away!) have this incredible sense of entitlement that is so evident on his smug face. Wait, isn’t he retiring right away! Yay!
December 15th, 2010 at 8:37 pmI meant baby boomers have a sense of entitlement! Love BT!
December 15th, 2010 at 8:38 pmWow! What a guy! Why did it seem like he was attacking you personally?
December 16th, 2010 at 11:53 amIt is absolutely more difficult for younger generations to get established nowadays. Besides the obviously outrageous costs of housing, let’s talk about student debts or even the difficulty of getting into the job market after school is done.
I would have lost my cool. Incedibly handled intereview Ryan!
Thank you for standing up to Graham Hicks. Not only is he “debt free” but he is rude and unbearable to listen to.
Please tell your producer Hicks is not a welcome “guest” and the next time he is on B.T. we will be changing the channel.
You will be wondering who we are. Your dad and my husband, Norm, are cousins.
December 25th, 2010 at 9:12 am