Modern America
John decided he needed things he didn't have the cash
for. He applied for a Visa and based on
his $30,000.00 income, the bank granted him a card with a $5,000.00 limit. After a couple of years he maxed out the
credit card.
He had a low interest of ten percent, so the monthly
interest came to $41.60. John had gotten
used to buying nice things so he asked the bank for an increase in his
limit. Since he had always made his
payments on time, the bank granted an increase to $10,000.00.
After a year he had maxed out the new limit. his payment was now $83.20. He decided that he needed a new television so
he went to the local store and bought one on credit for $1000.00 at 20%
interest. Then bought a new car for $30,000.00
at 6% interest. With these new purchases
his monthly credit costs, along with principle on the car, was $700.00 a
month.
On a salary of $30,000, his monthly take home after taxes
was $1,625.00. After rent, food,
utilities, and recreation he didn't have $700.00 a month; so he asked for a
credit increase. Since he continued to
pay on time the bank increased his limit to $12,000.00.
Johns old furniture didn't go with the life-style he wanted
to project with his new car and big screen television. He went to the furniture store and bought a
new living room, dining room, and bedroom.
He put as much as possible on a store credit, and the rest on his newly
increased credit card.
Sadly, this is a story of our government, as well as much of
our population. If we don't wake up, and
grow up, we will soon be facing bankruptcy as a nation, debt increase or not.
Ken Choate
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