New York Sign Language How Americans Get Caught in Credit Card Debt By BOB YAMPOLSKY	フレームで見る  英文をプリントする  脚注をプリントする
米国流クレジッドカード乱用法 アメリカはクレジットカード社会。筆者も4枚のカードを持っています。しかし度を過ぎた買い物はカードの支払いを滞らせます。そんな場合、利率の低い新しいカードに加入し、それで借金を支払う方法がよく使われます。それでもだめなら事故破産という手段も…。

Let us begin by looking at the three questions at the top of our sign for this month — which is, in its own way, quite a wonderful sign. Not only does it have a low-budget amateur design and neglect to tell us the name of the company being promoted, but there is an egregious grammatical error in the very first word.

"Creditor's calling?" it says. What it means to say is, "Creditors calling?" — that is, "Are creditors calling?" In other words, are your creditors — the people to whom you owe money — calling you and demanding that you pay debts that are long past due?

It continues: "Robbing Peter to pay Paul?" "To rob Peter to pay Paul" is a fairly common expression. It refers to the use of funds for a certain necessity — such as rent — to pay for another necessity — such as food.

And then we have, "Using one card to pay for another?" Card here is credit card - - in other words, do you use one credit card to pay off the debts on another? This is where we will focus our attention today.

About once a month I find in my mailbox an invitation to apply for a new credit card. If I had said yes to every offer that has come my way in the past couple of years, I would probably have over 20 credit cards and a combined credit line of about $200,000 (¥2.7 million). As it is, I have four with, a combined credit line of close to $40,000 (¥5.4 million).

When you make purchases with a credit card, you get a bill each month that itemizes your purchases and shows you your total balance, your remaining credit and your minimum payment. Let's say I used a Visa card to buy a nice computer for $2,500 (¥337,500). Assuming I made no other charges on the card that month, I would get a bill showing a balance of $2,500, $7,500 (¥1,012,500) in remaining credit (since my credit limit is $10,000) and a minimum payment of around $50 (¥6,750).

Credit cards can be a very nice thing — I get a $2,500 computer and I only have to pay $50 a month. The problem, though, is that the interest rates on credit cards are so high that even if I never make another purchase with the card, it will take me something like 30 years to pay for the computer.

Now $2,500 is a fairly manageable figure, which I could pay off in full at any time. But let's say I was "maxed out" on all my cards, carrying $40,000 in credit card debt. What would I do? Cut back my spending? Impose an austerity budget on my household? Get a second job? Nonsense! I would do what any good American consumer would do: simply wait until I got my next credit card offer in the mail and get another card.

The wonderful thing about these credit card offers is that they start with a low introductory rate, so that for the first six months, you may pay as low as 3.9 percent interest. If I'm paying 18.9 percent interest on $40,000 of debt, it makes sense for me to pay off this high-interest debt with this (temporarily) low-interest card. This is called transferring debt from one credit card to another, and it's a common practice today in America.

This, as you may well imagine, can lead to a cycle of ever-increasing debt. And it's when things reach an undeniably untenable state that you start taking note of ads like our sign for this month. Ads for these types of services are proliferating (in one TV ad, the narrator gushes, "Imagine! A zero balance on your next credit card bill!" — as if that were the very definition of happiness), for the simple reasons that each year over one billion credit card offers are mailed to Americans and that the current total consumer debt in the United States is over $1.2 trillion (¥158 trillion).

If you are too far in debt for these services, there is another option: bankruptcy. That may sound drastic, but from what I hear it is relatively painless, and you end up retaining most of your assets. Best of all, after you've been officially declared bankrupt, your credit rating actually improves, and it is quite easy to get credit cards again.

Shukan ST: Sept. 25, 1998

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