Credit Card Users Need Financial Literacy, Not Shame

Having fallen into the low-mininimum payment cycle, a lot of Americans and Canadians are in trouble financially.

Tens of millions, in fact.

Yet, in reading comments on blogs and on-line articles, understanding for the plight of the those who have entrapped themselves seems in short supply.

Those who comment seem to think that just because they resisted the traps set for consumers, or they have enough money for a standard of living that does not need credit, that those who fell in the credit trap are deserving of shame because they “should have known better.”

In fact, it is consumers who are being accused of “taking advantage” of the system, both in regard to the subprime mortgage meltdown and the credit card meltdown, even though it is they who are now losing everything they worked for.

OPTIMISM: AN AMERICAN TRAIT

Yet, the vast number of those who bit the bait and were reeled into the minimum payment trap were just trying to live.

If they are to be accused of anything, let it be this: American optimism.

So many thought that, somehow, someway, down the line it would all work out. They would get a better job, make more money and pay it all off. 

Some went into debt to start their own businesses.

Others, who had homes, thought that the remaining equity in their homes would bail them out.

So call them naive, over optimistic and financially illiterate if you must call them something.

Do not, however, call them bad or stupid or criminal.

Resist the temptation to shame or mock them.

Because what happened to them was the result of a single-minded attempt  to exploit them as an economic class in order to make others rich, as this interview with credit card consultant Andrew Kahr shows. 

The best defense against exploitation is education. We can’t do much about the mistakes of the past. We can, however, avoid similar mistakes in the future by improving our personal financial literacy. 

The best way to do that is to Increase Your Financial IQ: Get Smarter with Your Money.