Credit: Facts About Living With Debt

What is credit? Credit is the ability to obtain goods or services before payment, based on the trust that payment will be made in the future.

Why would anyone want credit?

In essence, whenever you purchase anything on credit, you are borrowing. With these lines of credit come several conditions. Credit card companies have ways of enticing you into signing up. The most common hooks used by credit card companies are:

  1. Reward points, often used to redeem for prizes
  2. Discounts
  3. 0% introductory rates
  4. Cash back rewards
  5. Frequent flier miles

However, although these rewards seem generous, the risks involved in using credit out weigh the rewards. We have to mature and take ownership of our financial actions. It’s worth waiting another day, week, month or year to make a purchase for the sake of saving your finances. All that glitters isn’t gold. And there are always new sales. Credit card companies are very aggressive with their advertising techniques, if you don’t consciously guide yourself, and make sure you know exactly what you’re getting yourself into, you could land yourself in a world of trouble. Once you choose to play with fire, at some point, you will get burned.

With credit however, there’s always a catch-22. Using credit is dangerous, human nature or lack of self control; we usually end up over-extending ourselves and purchasing stuff that we don’t really need.

The National Foundation for Credit Counseling March 2011 consumer research had these findings:


  • 1 in 5 U.S. adults (22%) do not have a good idea of how much they spend on housing, food and entertainment, the highest proportion seen since 2007.


  • This year only 2 in 5 Americans (42%) are spending less. Almost 3 in 5 say that, this year, they are spending the same (31%) or more (26%) compared to one year ago. This is opposite of the trend for the past 2 years, when at least half of U.S. adults reported spending less than in previous years,


  • 1 in 3 (33%) do not have any non-retirement savings.

Concern about Finances

  • Nearly 3 in 4 U.S. adults (73%) express concern about their finances, primarily about insufficient savings for retirement (48%) or emergencies (45%).
  • African-American and Hispanic adults are particularly prone to assorted financial worries.


  • 1 in 3 (32%) do not save any portion of their household’s income for retirement.

These statistics are a wake-up call to all of us to continue striving for control of our finances. The good news is that you can live a prosperous life without having credit cards!

This is a narrow path that only a few courageous people will choose to take. Many have done it and so can we. Let’s backtrack to the days were credit was non-existent, people back then built wealth and we still enjoy the fruits of their labor today.  Saving and generosity was the norm.

How many wealthy people have accumulated their assets by the use of credit cards?

Cash is King. A combination of cash and time, make up the most important wealth building tools we have. When you finally pay-off all of your debt, you free up one of the necessary tools and are on your way to the finished line.

About The Author

Keroy King

Keroy King is a Financial Educator, Podcast Host, Keynote Speaker & Empowerment Expert, residing in Los Angeles, California and the Founder of "Life Then Finance" a community where she coaches individuals to overcome personal and financial obstacles that are holding them back so they can quickly and effectively live a full-filled and purpose driven life. Even when they think the odds are stacked against them. She is also an online course creator & instructor of several personal finance and personal transformation online courses.