Debt and Credit Cards: Beware of “smallenfreuden”

DD2 = Dear Second Daughter
DH = Dear Husband
                A couple of nights ago, DD2 and I were watching a bit of TV when a commercial came on that I’d never seen before.  I was at once captivated by the quirky charm of the ad with its 1950s-era music, film footage, sound quality, and narrative style, and I was pleasantly bemused by its focus – a word I’d never seen or heard before:  smallenfreuden.  But when the commercial’s purpose became clear to me, I could feel my eyes narrowing into a glare as my mouth tightened.  A growl escaped me, and I muttered my contempt, but I kept it brief and quiet because DD2 tells me I talk about debt too often – and I don’t want to be that mom.
                The commercial was all about Visa, and the “joy of small” that comes with using the credit card for “small purchases you’d make anyway”.  In the days before our journey out of debt, I would have remained somewhat amused by the commercial from start to finish, perhaps rolling my eyes back when the Visa bit became apparent.  One full year into our debt-reduction, however, I see it as an insidious new agent of the Debt-Matrix.
                We’re following Dave Ramsey’s plan in our efforts to become debt-free, and Ramsey is unequivocally opposed to all things credit card.  “As I said, when you play with snakes, you get bitten,” he writes in his book, The Total Money Makeover.  “I have heard all the bait put out there to lure the unsuspecting into the pit.  A free hat, airline miles, brownie points back, free use of someone else’s money, a discount at the register – the list goes on to get you to sign up for a credit card.  Have you ever asked yourself why they work so hard to get you involved?  The answer is that you lose and they win” (Ramsey, 41).  Nevertheless, DH and I still use our Visa.
                Our debts have been in the form of lines of credit.  Credit card debt has not been an issue for us.  With very few exceptions, we have always paid off our credit cards in full.  And while Ramsey points out that “according to MSNBC.com, 90 percent of the airline miles are never redeemed” (Ramsey, 41), we eagerly use up every single one of ours.  Furthermore, the credit card points that we rack up at the gas pump earn us a restaurant meal every two years.  When I recently raised the possibility of getting rid of our credit cards, DH pointed out these things, and without directly stating it, essentially said that we were avoiding the pitfalls of being duped and that we were actually gaining from our credit card use.  “Wrong again,” says Ramsey.  “A study of credit card use at McDonald’s found that people spent 47 percent more when using credit cards instead of cash.  It hurts when you spend cash; therefore you spend less” (Ramsey, 42).
                Is it possible that if we took a pair of scissors to our credit cards, we’d ultimately spend significantly less?  That we’d actually save in real cash far more than we could ever earn in terms of air-mile points or restaurant points?  We’ve been living pretty frugally over the last year, so on the one hand it’s hard to believe that we could do better.  On the other hand, we would never have believed that we could increase our debt-repayment by over 300% from one year to the next, and yet in the first year of our journey out of debt, we have.  (See last week’s post, “First Anniversary of Debt-Reduction:  $50,000 Down!”) We use our credit cards for relatively few and very fixed purchases, but I’m inclined to believe that we really would spend less if we got rid of them altogether.  DH doesn’t feel as I do at this point, but he’s giving the idea some thought.
                There has been some negative commentary on the whole “smallenfreuden” initiative.  The Urban Dictionary has two entries for the word.  The first one posted, obviously by a Visa-friendly individual, defines it as “An English/German loanword that literally means ‘the joy of small.’ ”  The entry later posted, evidently by an individual with some reservations about Visa’s motives,  defines it as, “The joy of falling into debt in small increments.”  As for me, I’m just itching for a pair of scissors.

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  • Schadenfreude: pleasure derived from the misfortunes of others; fail joy. Per the documentary “Maxed Out”, consumer lending is obscenely profitable. CC companies make the biggest profit from folks who make minimum payments on their debt plus interest. Their favourite customers are the those who are in debt, stay in debt, and continue to service that debt.

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