Credit Cards and Kids. They go together like Gasoline and Flame.

“So you listen to me and you listen well.  Are you behind on your credit card bills?  Good, pick up the phone and start dialing!  Is your landlord ready to evict you?  Good!  Pick up the phone and start dialing!” – The Wolf of Wall Street

So, this is how I viewed the world when I was in college.  Free money!  What could go wrong???

It started as an innocent dinner conversation.  One thing about our dinner conversations – they’re not normal.  We might discuss topics as diverse as financial impacts of currency devaluation on the Roman Empire, or what food makes Pugsley toot the most.  It turns out its pretty much any food, he claims, except for ice cream from Dairy Queen® and Cheetos® and whatever else he’s eating at the time.

But this night The Boy piped up.  “Hey, Dad, I was thinking about getting a credit card.”

Being that he’s 18, he’s and adult and that’s his right.

“What credit card were you thinking of getting?”

“Well, one company sent me an application . . .”

“So, if you were going to buy a car, would you just drive down the street and just buy the first one you saw?”

Long pause.  My dad logic was a laser-guided missile.

“Well,” he replied, “I really don’t know much about credit cards.  Can you help?”

I can.  And I promised I would.

So here it is:

The first thing a young person should know about credit cards is that they are evil.  Not evil in the sense of being a direct minion in the service of Satan® that slowly creates global warming just so it can barbeque endangered species over oil from the tar sands in Canada™.  No, credit cards are worse.  Besides, have you ever eaten slow-cooked panda with bald eagle sauce?  Or fried whale?

This may be the first time this sentence has been written in English:  “You haven’t eaten until you’ve eaten panda.”  Goes great with ketchup.  Tastes like chicken.

Wait, where were we?  Oh yeah, why are credit cards evil?

Mark Twain had the answer:  “Willpower lasts about two weeks, and is soluble in alcohol.”

Yeah, the credit card company was pretty excited when I bought that original picture of Cats Playing Poker.  Who knew there would be no market for that??

Let’s conduct an experiment that shows how 18 year olds feel about money.  Pretend you’re 18.  For the average adult, one fifth of scotch should do to start the simulation.  Now, let’s pretend your net worth is, oh, some paperback books, t-shirts you got in high school for band camp, and empty tubes of acne medication you planned on turning into an attractive art piece.  Now, stare at your phone a lot.

Now, some nice person has offered to allow you an amazing opportunity.  He sounds nice, but he’ll let you to spend money you don’t have.  He’ll even give it to you in advance.  You’re a good guy.  You deserve this, right?

And for every second that you carry that credit card in your wallet, well, your struggle is to not spend money.  You have it, it’s available.  But you’re 18, and at the peak of hormonal activity in your body.

So, after you’ve spent a Friday night on a crazed PEZ®, pantyhose and elephant ride binge, well, now you have a bill staring at your face for all of that crazed fun.  But, hey, elephant rides, right?  And the bill is approximately every cent that you would make in the next year of your life, if you didn’t have to spend money on stuff like rent, food, gas, and, well, more elephant rides.

The second thing an 18 year old should know about credit cards is that you can’t really have one:

You’re 18.  With no job.  You’re in luck!

In 2009, Congress passed a law that says you can’t have a credit card unless you can pay for it.  Yes.  Banks were giving 18 year olds credit lines even though they had no income.

But after 2009?  Congratulations!  You’re a winner!  You can’t have a credit card.

In what could be seen as the barest hint of morality coming out of Washington, this bill passed with the support of both Republican’ts and DemocRATs.  Yay!  But is it just me that worries that the stuff that gets support of both parties is the scariest?

Anyway, The Boy can get a credit card limit that matches his documented income.  Both of which are zero.

Unless . . . I cosign.

What is a cosigner?

Robert Mueller would call a cosigner an unindicted co-conspirator.  You sign your name to the credit card so your kid can buy pantyhose, PEZ® and elephant rides, but you get no pantyhose, PEZ™, or elephant rides.  And if your kid can’t pay for the cool party?  You pay.

Queue a sad trombone playing.

Note that a co-signed credit card does nothing to help your credit rating.  What’s a credit rating?  It’s a mathematical formula that computes the ability of the banks to squeeze you between two blocks of concrete and extract gold.  The bigger the number?  The more gold they can squeeze out of you, if you start talking back to them.

So, human sacrifice is really in the terms and conditions of every credit card company and on a cosigner they make you live without a kidney or liver.  Just letting you know.

The third thing to know is that you don’t have to worry, the second you turn 21, the banks will be glad to lend you all the money you want that you can’t afford to pay back:

Yes.  When I was in college, there were hot chicks in scanty clothing that attempted to convince you to sign up for a credit card, with the insinuation that, you know, they’d ignore you later after you spent all of your cool credit cash on them.  Party!

And this will happen to you when you turn 21.

Why?

That temptation that I talked about, that constantly burning credit card in your pocket, whispering in your ear “buy me now”?  It is a tool.  It’s a tool with a purpose.

This is why credit cards are awesome . . . for those you have to pay money to.

I was talking with a friend who is a zillionaire.  He had hundreds of apartments in Dallas.  He looked at me and said, “You know, John, it’s like I have an army of slaves working for me every month.  I own the apartments.  They were paid for on the first day they were constructed through me selling government tax credits to third parties.  Then people move in.  And they have to work every day to pay me.”

I was stunned.  Here was a zillionaire, telling me that his tenants were . . . his slaves.  And he is right.  Any time a man is obligated to pay a debt, to work for another is a slave.

The fourth thing you need to know is that debt is enslavement, but enslavement on steroids:

A lease, like a credit card, is a debt.  But a credit card allows you to buy pleasure now for future labor.  But it’s not an even trade.  Every month, the debt gets more added to it.  That debt is interest.  That means that for every elephant ride you charge to your credit card, you have to pay an elephant ride, 25,000 PEZ™, and two pairs of pantyhose.

You have to pay your purchase back, plus more.

When you buy a house, if you can’t afford to pay in cash, you get a loan that’s called a mortgage.  Mortgage is from the Latin root, meaning “Morty” and “Gauge” – so it’s a gauge of how many people named Morty that can live in your house.

Not to get heavy, but, you know, sometimes it’s worth it?  Oh, not really?

Just kidding.  It the Latin root for “mort” is death.  And “gage” is pledge.  Yeah.  A death pledge.  Happy thought, right?  Back in the day you were pledging your life to pay back the loan.  At least they were honest, then – you would die rather than not pay this money back.  But at least you have a pool, right?

The fifth thing you need to know is that credit cards can be a weapon to fight back:

I have in many years, paid for every single Christmas present with rewards from my Visa© card.  Yay!  Credit cards give cash back bonuses for spending with them.  The idea is that you spend money on the card.  They make money when you spend it via extortion fees from the people who sell you stuff.  Buy PEZ® online?  Get cash back.  Buy 25 Macanudo™ cigars online?  Burn the enemy’s crops.  Heck, Mark Twain used to smoke 300 cigars a month.

But what did that guy ever accomplish?

The sixth thing you need to know is that credit cards only make sense when they make sense:

I was married before I met The Mrs.  It was a mixed marriage.  I was human, she was Klingon®.

Just sayin’

How much would you pay to be rid of a Klingon™?  Well, as Henny Youngman asked . . . “Why are divorces so expensive?”

His response:  “They’re worth it.”

After my divorce from She Who Will Not Be Named, I was in debt.  My student loans.  My death pledge mortgage.  The debts from the marriage.  I consolidated them into four credit cards.  The total was enough to allow me to have gone to the Super Bowl® on a private jet with 2/5ths of the Spice Girls® as companions.  But all I had was a bill.

Well, maybe I’d pass on all of the Spice Girls®.  (Shudder)

It was paid off three years later.  Thankfully, I didn’t have to wash Spice Girl© off of me.

The seventh and final point is this:

Credit cards are like fire:  helpful when you are in control, but like ice cream and Cheetos®, a fearful master.

And, for extra credit:

I hate to ask this question, but I must:  how much could we achieve as a civilization if we abandoned debt.  Paid it off.  Bought houses with cash.  Paid up front?

What if interest was illegal?

What if no one was a slave to debt?  What if our country paid our bills, in full, every month?

Everyone who reads this blog knows I’m a fan of capitalism.  Of freedom.  Of Western Civilization.  I’m not sure that interest is required for any of these.

Discuss.  A Macanudo® to the best response . . . or some PEZ®.  Your call.