The Appealing Nature of Credit Cards

Have you ever thought about why debt is so appealing? Yes, debt. I know you're thinking, "Debt isn't appealing at all." Ah, but it is! Pay attention to the next credit card commercial you see. It most likely features a celebrity or kitschy theme that tells you how much easier life is with a credit card; how you can earn points, rewards or cash back to make life better for you and your family. Does that not sound appealing?

It's all in the marketing. Debt is one of the most successfully marketed product of our time. With the right marketing, anything can look good. Even credit cards. Credit card companies spend millions every year on their advertising. So what does that tell you? There is money to be made in peddling debt—lots of it! Credit card ads only highlight the advantages, not the disadvantages. And with $747 billion in total credit card debt owed by U.S. consumers, I'd say the credit card companies have more than made their money back.

Next time you come across a credit card ad, I want you to remember that they are trying to sell you a product. Debt is a product. They are looking to pad their pockets, not yours. Using a credit card sounds all well and good until you get the bill and see the interest that's been compounding daily because you didn't pay the balance in full. That is how credit card companies make their money. They're betting on the fact that you probably won't pay the balance off and will keep swiping—increasing the balance, while increasing their bank accounts.

Don't fall into the marketing trap. Debt is one product you don't need in your life. No matter how good these ads make it sound, you'll come out better in the long run when you only spend what you have.