Breaking Down the Credit Card Trap

Over the course of launching Relief, I’ve gotten to know countless people struggling with credit card payments and debt. But it invariably can take them time to open up to me, even as they know I focus on this field and am firmly on their side.

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I think this is one of the insidious ways that the credit card industry actually continues to consolidate its power. It has figured out the power of shame.

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So many of the young people I speak with find themselves embarrassed, feeling stupid, and even downright mortified at the balances they carry. As a result, they just don’t talk about it all. They may even find themselves pushing it out of their own head as a way to avoid dealing with the feelings of shame and despair that are so prevalent. We see a long-term toll being exerted on the mental health of the millions of Americans in this predicament. Let’s remember that wellness isn’t only about working out, but maintaining mental health – and that’s increasingly tough to do under the specter of crushing bills owed to a collector. 

In short, the credit card trap is working perfectly. We can only begin to break down the trap by demystifying debt, how it works, and who it serves. 

You shouldn’t blame yourself – any more than a deer should blame itself for wandering into a trap. One of the great insights of the financial sector has been placing the onus entirely on young people who have never truly gotten a financial education in school to read the fine print on agreements they sign, whether for their student loans or monthly credit card bills. The game has, in many ways, been rigged from the beginning with manipulative tactics and language that’s next to impossible to make sense of in terms of deducting what your costs will be over time.

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Here’s how the trap works.

• One day you receive a letter in the mail – congratulations, you’re old enough to receive your first credit card!
  

• Suddenly you have this shiny piece of plastic available that vouches for your status as a newly minted adult. It’s a dopamine hit not unlike a piece of candy. And it all sounds reasonable, with a small amount of credit offered so that you don’t exceed your budget. 
  

• Do everything right and pay your bill off on time and you receive a “gold star” from the credit card company – that’s right, access to even more credit!
  

• Now you’re getting a second, even bigger hit of dopamine.
  

• Your new golden reward; a larger credit line to spend even more on. 
  

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This goes on and on – but what you don’t quite grasp is that the credit card companies are systemically putting a number together that moves you closer to not being able to pull off the full balance at the end of the month, to where you can only avoid making minimum payments. 

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Consider how many credit card websites and advertisements go to great pains to emphasize the “minimum payment” owed each month – as if that’s doing you a favor. In truth, their entire business model is predicated on you only making minimum payments each month and becoming further mired in debt. 

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The whole system works perfectly. It does exactly what it’s intended to do. If you’ve ever seen “Good Will Hunting”, you may recall the famous scene of therapist Robin Williams telling abuse victim Matt Damon of his troubled childhood, “It’s not your fault.” Over and over again. “It’s not your fault.”

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I have the same message to the victims of the Credit Card Industrial Complex. It’s not your fault.

So what can you do to claw your way out of this trap that has been laid?

That’s the subject of a whole other article…

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