A Fool And His Moneyby Brendon Bosworth / 09.06.2009
The undisciplined spender had other plans in mind. When he signed for his first credit card, he had nothing but self-belief in his eyes. That 8% on a credit balance beat the hell out of his savings account (parody of a term). Keep it in the positive; reap the generous rewards of compound interest – his master plan. All he could see was swiping for car rentals in far-flung countries, free travel insurance and fledgling steps towards building a stellar credit rating.
But he was weak. It was harmless enough at first: sucking a few extra notes from the ATM. Flirting with that negative balance, taking it to (–) R1000. Then, registering the 20% interest on debit amounts and heeding the cautionary voice of his dishevelled future self, paying it all back in one instalment. Safe. But it got easy, far too easy. ‘Put it on the card’ – his catchphrase, doubling as a death knell. He knew his ship was coming in soon: gold-plated, weighed down with bounty. Pay it back when those cheques hit shore.
But that ship sank before it even set sail. Shot through with rot; crafted from the lowest-grade timber. Now there’s a pecuniary albatross to deal with and, man, is it heavy. This debt monkey might be irresponsible, but he’s nobody’s fool. He scrutinized that APR, understood the compound interest, minimum monthly repayments, grace period. He was well aware when he took it all on. But he needs the bigger picture. Without a financial maths degree on the wall, he fails to get his head around the necessary equations – the ones that calculate the term of sentence. The exact number of days ‘til he can discard those financial manacles and once again walk free and whole. If he pays his minimum monthly instalments each month, on time, and doesn’t spend another cent, how long until the end?
In his naivety (and inability to afford the petrol to get to his nearest branch), he thought the banks would have online calculators to help him. After all, they have calculators for everything else: home loans, vehicle finance, savings and investments, foreign exchange, bank fees. Everything but the magic card. Standard, ABSA, Nedbank – websites filled with sound advice, tips and tricks, but no sign of a credit card repayment calculator. Branson – same story. Not an abacus to be seen at Virgin’s digital portal. FNB – almost, but not. An online ‘credit budget calculator.’ Good for someone who used the budget facility and chose to pay off over six months, two years or three. But this indebted soul never ventured that close to the torture rack.
Of course they don’t want him to know. Don’t want to lift the veil of fiscal ignorance. It might have scared him off in the first place, stopped him from over-spending. Then again, it may not of. He’s human just like everybody else. But the internet is a wily tool and he found the clarity he so desperately sought. So now he knows the true meaning of revolving credit. Just like a set of revolving doors, spinning in painfully slow motion. He is the gormless specimen trapped in that claustrophobic compartment. Face up against the glass, drool trailing from his idiot mouth. Paying for his undisciplined ways, and rightly so. He is shackled now, but knows that, ultimately, this ride will come to an end.