an extended meditation on presence (we also have chickens)
For the first time in my life, I have a credit card.
My parents, who got themselves into trouble with credit cards in their early 20s, warned me away from all the offers I got in college. I got my first credit card at age 25 but rarely used it. My debit card had a higher limit (because I possessed more than $500 US dollars in any given month) and didn't require me to keep track of what I'd spent. I ended up closing that first credit card a few years after I got it, having used it maybe twice.
For years, I didn't bother getting a credit card because I assumed no bank would give me one. Lenders don't like working with the "self-employed." For some reason, they think it's a safer bet that a single employer won't fire me than that a dozen clients won't walk all at once. Weird.
Anyway, I decided to try again on the credit card front - nearly 20 years later - when my bank offered a zero annual fee card with cash back on stuff I actually buy, like gas and groceries.
The call with the loan officer was fun.
Loan Officer: "It says on your application you own your home, but I'm not seeing a mortgage."
What I Said: "I own it outright."
What I Thought: "That's because I own it. I'm not installment-borrowing it from a bank."
It turns out banks get extremely confused when you own your house outright. I had enough basic accounting in college to guess why.
When a bank says your house is an "asset," it's not telling you the whole truth. A mortgage is a liability for you. It's an asset for the bank. Me owning my house isn't making a bank any money, which makes no sense to a bank.
(Incidentally, even owning my house outright does not make it an asset. I estimate that this house has cost my family about $20,000 over 25 years. That's the amount by which its estimated value has gone up minus what we've spent on maintenance, property taxes, and insurance. I don't have a mortgage, but my house is still a liability. /digression)
As someone who understands (basically) how money makes money, I do understand credit cards. But as someone who has lived a cash-only existence for my entire adult life, credit cards are WEIRD.
For example: My first purchase with the new card was to fill up my car's gas tank.
The gas station accepted the card as payment. I got a tank full of gas. I did not pay money. I have the money. I *will* pay the money (I will never, ever carry a balance on this card, not at its eye-watering double-digit interest rate). But I have not yet paid the money. But the gas station has money. I have the gas *and* the money.
...What is this? People just say "yes, this plastic rectangle is a Good Rectangle" and give me stuff?? It's weird???
I get it. The bank is counting on me doing something short-sighted and dumb, like assuming a "$10,000 limit" magically means I now have $10,000 extra dollars to blow. Or forgetting to pay the balance on time. Or looking at my checking account and thinking "wow, look at all the money I have" and spending it because I forgot I already spent it. Or simply not thinking about it at all until the bill comes due.
The bank is counting on me *not* having lived a cash-only existence for so long that I am now unable to think in any other terms.
My bank's website even lists the "line of credit" on my credit card along with my other accounts, making it look as if I have a $10,000 balance in an account. I'm on to you, bank. What I have is your willingness to collect interest off $10,000 of invested cash just as long as I don't repay my balance on time.
As long as I pay the balance in full on time, the card is, on paper, an asset: It returns a few percentage points of my expenses each month. It also lets me leave that money in my checking account until the end of the month, so I'm collecting some additional interest on it as well. But it's an "asset" that feels a lot like holding a cobra by the neck. I can make it work for me as long as I do not for one instant loosen my grip or take my eyes off its fangs.
Meanwhile, stores keep deeming my plastic rectangle a Good Rectangle. Weird.
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