Monday, June 22, 2009

What credit culture is doing to us?

On Sunday, a friend who is still a student called to invite me to his 21st birthday party this coming weekend. I told him that I might be working hence can't guarantee my attendance. If I'm too tired, I will have to miss it.

All is well until he told me that he still short of money to pay for the party. Then he asked if I can lend him. I reminded him that he still owe me a sum which I lent to him a while back. Nonetheless I asked him how much does he need, to see if there is any amount that I can help out. He said, "$400."

He has sent invitations to people to attend his party about 2 or 3 weeks ago. That means probably he has booked the place and arranged the food. So when he told me that he still lack of $400, I was very surprised. That means he organized a party without having the money to do it.

My friend and I have very different worldview on 'consumption'. When I was 20, I was already in a foreign land laboring for my own food. If I don't work, I don't get paid. If I don't get paid, I don't eat. Simple rule to consumption.

My friend is not working and he is organizing a birthday bash by lending money from everywhere. This is consumption by credit. A prevalent culture around me. My friend is just perhaps a minuscule example compared to adults' marriages. Most people who are getting married booked the banquet first. And then hoping, or perhaps more accurately expecting, that the monetary gifts from their guests will be enough to foot the bill. (But marriages is not really an exact example as there is a "you rub my back, and I'll rub yours in return" unspoken principle in place)

The other day I saw an advertisement on MRT that encourages consumers to borrow money from the bank. The bank in return will give presents to their customers. The more you borrow, the better present you'll get. I can't remember the exact condition but it goes something like this: If your credit amount is 5 digits (ten thousands and above), you'll get an iPod Touch. If lesser than 5 digits, you will just get a normal iPod.

And recently, cineplexes have been showing Visa's GO advertisement which features places and various hobbies around the world. Throughout the whole advertisement its subtle message is this: "GO everywhere and do whatever with Visa credit card. Enjoy yourself and we will take care of your bill." But the truth is, these credit services just postpone the billing (with interest, of course). They don't take care of the bill.

These advertisements are basically wooing people to be in debt. I'm offended.

So did I lend money to my friend? Not merely I did not want to, but I can't. My saving account currently has much less than that. So I bid him good luck to look somewhere else.

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