Some days ago I had a conversation with a friend about credit card debt, which in his case was rather extensive and had been continuing over the years. He is a very intelligent guy but like so many people, he sees to have blinds on which it comes to common sense about money. What really surprised me about this conversation was the fact that he told me that he puts money away for retirement and tries to invest in the stock market with mutual funds. When you consider a credit card debt over a number of years that ranged between 10-30 interest, putting money anywhere other than trying to pay off this horrible debt is clearly insane. For one thing, you will never get the kind of return credit cards are able to get by ripping out the American public charging interest rates that are designed to ruin financial lives by investing in the stock market. For me getting rid of this horrible criminal kind of debt is just basic common sense.
Over the years I have been continuously angered by the fact that Congress has not stepped in and regulated credit card companies to prevent the abuses that they have gotten away with for so many years. There is no way any credit card company should be allowed to charge anyone as much as 30% interest. What would be fair would be a maximum rate of 10% and that would be allowed only under the worse conditions in terms of the credit of the person who has the debt. This level of abuse has been going on for many years in this country and we all know that after medical expenses, which is another financial tragedy in this country, credit card debt is the second leading cause of bankruptcy.
As far as my friend, I think I convinced him that his first priority from now on is to take any money he has in extra income every month and put it towards getting rid of that debt along with having some kind of an emergency fund in case he loses his job. My friend is 60 years old now and unfortunately got divorced about 2 years ago. He is a good guy and desires better than a divorce after 30 years and then losing half of his life savings but that is what happens to so many people. We also know that divorce also ranks very high on the list of reasons why people go bankrupt and I do know that the 2nd leading cause of divorce is because of financial problems.