Arthur Vidro
On Consumerism
My friend Della reached middle age without ever having a credit card where she was the designated cardholder. She married young and her husband, Paul, was happy to get additional cards on his accounts for his wife to carry and use.
Those additional cards bore Della’s name, so my friends believed that no matter what might happen to Paul, Della would still have charge cards to use.
During dessert one night in a restaurant called Hildebrandt’s, I pointed out the fallacy of their belief.
“Sorry, folks,” I said. “Each credit card account has but one cardholder — regardless of how many cards exist on that account. That cardholder is the person responsible for paying the credit card company. In your case, that person is Paul.”
They nodded, not knowing where I was leading.
“However,” I added, “if — knock on wood it doesn’t happen — Paul should pass away, then that account gets closed. A dead person is not permitted to be the cardholder. Any card on that account, even a card bearing Della’s name, would cease to function, once the credit-issuing company learns of Paul’s demise.”
They looked shocked. They resolved to get Della her own card, without Paul’s name on the account at all.
It proved difficult, because Della had no credit history. Because her income was limited, she feared she wouldn’t qualify.
“That’s another fallacy,” I stated. “Most credit card issuers care only about how much income is available to you – they don’t care who in the household earns the income. So you’re within your rights to include Paul’s income when you put down your own income on the application.”
Paul was relieved. “Truth be told,” he said, “I froze my credit reports years ago, after reading your column on the process. I wouldn’t want to unfreeze them.”
Alas, Della’s applications got turned down. Even though she had never been in debt, most credit card issuers felt she had an insufficient credit history. Even an application supplied by their local bank got rejected.
But one card was all it took, and one issuer (Citi) sent her a card.
Last week, Della used her credit card for the first time. She went to Frank’s Bargain Center in Claremont to buy fabric.
“Did it feel different using a card instead of your usual method of paying with cash?” I asked her.
“It sure did. The card makes me feel richer. It feels like I can get so much more stuff than if I was paying by cash.”
“Did you buy anything you wouldn’t have bought if you were using cash?”
She blushed and nodded. “My wants and needs got blended.”
She pointed out a psychological difference I’d never noticed. “With cash, at most, you get some change. But you get the card back. You can get more stuff and go more often, and you don’t feel anything is being taken away from you, because your card gets handed back.”
I asked what she would do when the monthly card statement arrived.
She brushed aside that concern. “You only have to pay a minimum on the balance. Besides, when I max this card, I can get another, then use the second card to pay off the first.”
She was just pulling my leg. Then she somberly asked for advice.
I suggested when she gets home after using the card, to put aside in cash the amount that was charged. That way, she won’t spend more than she has available.
It’s best to avoid spending money you don’t have.
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