The whole U.S. seems to be focused on banks and what we must do to keep them afloat. What do banks do? They lend money. That’s how they make money. Lets imagine that everyone stopped borrowing from banks ( that includes credit cards) and they saved and paid cash for everything.
First of all people would still spend the money, which would spur the economy, and the only ones not making lots of money would be the banks. I have a home in Bangor, Me. and the major buildings going up are banks and drugstores. It seems there’s a new bank being built on every corner!
The myth is that if people don’t borrow from banks the economy will suffer. Wrong, wrong, wrong! There are 6 billion credit card offers going out every year. Why? It’s a big money maker. It’s a rip off if you ask me and highway robbery with the interest rates they charge.
We keep seeing that consumer confidence is down. All they are really measuring is how much people are putting on credit. Believe me if everyone was out of debt consumer confidence would be sky high.
Saving and investing causes an increase in wealth while borrowing creates bondage, poverty, and more banks on the corner. Do I sound negative about banks? Maybe. Did you every have to go for a loan and made to feel like you where not worthy to sit in the chair in front of the loan officer who was probably making not much over minimum wage?
I use credit cards in my business and personal life and pay off all balances at the end of the month and my wife and I use this to get air miles on different airlines. We accumulate enough points to get several free tickets every year. In the last 10 years we have started doing this we have never been late on a payment. This past Christmas we went to Florida for 12 days and when we got back our credit card bill had come in at about the time we left. We sent our credit card payment immediately and it was one day late. A $30 late fee. Give me a break.
Americans don’t need to keep borrowing enormous amounts of money every year to keep the economy afloat. That is a lie.
Get debt free. Stay debt free. That will make for a more sound economy in my book!