J. Glatham

January 3, 2009

Once upon a time, when I was about 20 years old, my father said to me, "Stay away from credit. Buy everything with cash." I thought it strange advice, as I knew he relied on credit cards and American Express in his day-to-day personal and business life.

Well, shortly thereafter I found myself in the US Air Force and one of the first things I did was buy a car, on credit. As a young airman, my monthly income was $110.00 and my monthly car payment was $99.00. Of course, I did not need much to live on, as I was fed and clothed and housed on the government's dime. Also, my girlfriend was working and that helped. But I felt the crunch, especially when the car failed and I had to put money into keeping it running. Secondary lesson: cars are liabilities.

So, I started a process to get myself out of debt. I fixed the car, sold it and bought another, fixed it myself and sold it for twice what I bought it for and paid off the debt and bought another for cash. Since then, I have always paid cash for cars. One of the best cars I ever owned cost $35.00 and $25.00 to make it run. I drove it for years. Nobody needs a new car and nobody needs the associated debt.

About ten years after the car experience, I found myself married, with children, and, pretty much on a whim, established credit with a department store which led to eligibility for Master, Visa and American Express cards. I went through a bout with alcohol and some seriously bad decisions regarding the use of these cards. I had the American Express card confiscated for non-payment of the account and the Master Card was cut off for non-payment as well at about $2500.00. My father's advice was sinking in.

Ten years later, I received a letter from a financial institution that had purchased my debt and was willing to settle it for $500.00. I guess they figured anything was better than nothing. I checked to make sure they were legitimate and paid the debt. That was the last time I incurred debt, and I cannot express the relief I feel at having absolutely no credit record or history. The problems resulting from this status have been minimal (trouble renting a car once).

I think my father recognized that I would have trouble using credit in a responsible way. He was right. Maybe he saw the trouble that others had dealing with it or simply saw it for the trap that it is. Right there too. Having taken some licks, all I can say is that it is not hard to live what may seem to some to be a relatively austere life if it includes the psychological freedom of not owing my soul to the company store.