Living Paycheck to Paycheck: Credit Cards are to Blame

July 8, 2015

Living Paycheck to Paycheck: Credit Cards are to Blame.

Credit cards are one of the leading causes of why people in America are living paycheck to paycheck. Credit cards have greatly contributed over the last 30 years toward the mentality that leads to living paycheck to paycheck.

Credit cards: Spending Money Before You Receive It

Living paycheck to paycheck has always been a problem for people who have strapped budget due to their limited income potential. However, credit cards have greatly intensified this problem: it gives the ability for people to spend their money before they earned it. The very premise of a credit card is that anything can be purchased at any time without restriction. There is no loan approval process or any other hurdle toward spending instantly according to your desires.

Spending Money Before You Earn it Leads to a False Impression of Financial Realities

Because the premise of absolute financial freedom is planted in the mind by credit card usage, this generates a false financial reality. Families that could otherwise have very balanced budgets and sizable savings, are falsely led to believe that they can operate with large unnecessary monthly expenditures and absolutely no financial education or understanding. They have always been able to have anything they want and are preprogrammed to make large monthly payments on what ever they purchase. These payments are made into infinity with no plan for anything otherwise.

Credit Cards Destroy Normal Warning Signals: “We Are Fine Because We Are Doing What Everyone Else is Doing”

Normally this would send off huge danger signals such as you are wasting substantial portions of your income or are in imminent danger of losing everything you own because you have no equity in it.

However, because credit card usage destroys your true concept of financial reality, these signals are ignored or muted. To receive solace, the monthly payer looks around at his neighbors and sees that he has been doing similar things. In the monthly payer’s mind, there is no other financial alternative.

The Financial Alternative to Living Paycheck to Paycheck is Obvious: Dump the “Credit Card Mentality”

The financial alternative to the “credit card mentality” is extremely obvious: become financially savvy and live within your means. Just because you are able to live in a slightly elevated status because you over-leverage your life with credit cards and mortgage loans, does not mean that you have to instantly default to that very poor and self-destructive mentality.
File bankruptcy, acquire financial knowledge, and live according to reality instead of monthly-payment financial insanity.

Nothing is impossible: You can learn how to live on 30% of your income instead of 130% of your income. How much better would it be to live the same life-style on 30% of your income than 130%?

If you have solid income at this point of your life, take advantage of the time you have left. The alternative is to pay $100,000’s of “rent” to your credit card, mortgage, and other debt payments only to be left with nothing at the end of your working life.

Credit Card and mortgage companies want you to continue with some form of financial fantasy – as long as they can take your money. If you can bear to admit you’ve been taken and drop the credit company’s financial fantasy, you can finally break out of the system that has enslaved so many into the paycheck to paycheck trap.

If you need any help on rebuilding your financial status, give our office a call: we are here to help.


~Indianapolis Bankruptcy Attorney John F. Bymaster on Living Paycheck to Paycheck: Credit Cards are to Blame.

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