How Millennials Became Spooked by Credit Cards

MotherOfDragons
Fri, 19 Aug 2016 13:50:37 +0000

Personally I’d probably be looking for a used on to buy because I have a tendency to be frugal (which makes it especially ironic that I’m the one advocating that debt can be a useful tool), but for many it makes sense to make the purchase immediately knowing that on a $1000 item, they’ll be paying $17.50/month (assuming 21% APR) in interest.

For most, paying $17.50 beats living a month without a refrigerator, and for those with low incomes, assuming that all they can do is make minimum payments for a year until they get their tax money in, $17.50/month in interest beats the prices they’d pay at a rent-to-own place every time…

My opinion on this is you shouldn’t be buying a $1000 refrigerator if you have to “make minimum payments for a year until they get their tax money in.”

That’s how poor people think, and that’s why they stay poor.