Thursday, September 03, 2009

VISA, Mom's Charge Accounts, And Me

When I was a little kid, I never understood why Mom kept charge accounts all over town. We certainly had enough money floating around to pay cash for whatever we wanted.

"Always keep a balance in as many stores as possible,” she said. "You never know when you might need to use it. Once your credit is established and you keep it active, you have a back-up in case things get tight and you need to ‘borrow’ money from the merchants. It’s good to have it there ready to use.”

For a while, things did get bad and her wisdom saved us. We could borrow money (which is what a charge account really comes down to) from here and there to cover what we did not have at the moment. What’s due this week is paid and what comes due next month will be taken care of later on.

Eventually, it all worked out and I learned how to work the system: have a safety net in place and pay off the debt when it is due. If the time comes when you really need to lean on it, the “bank” is there for the essentials – and only for the essentials. It’s an emergency loan based on the trust between you and the merchants.

I don’t know if we have such these days. Plastic has replaced the individual agreements we had between people and you can bet Visa will not be that understanding. Sure, you can make a partial payment, but it will cost you. You can’t go to the manager and ask for another week until the bonus comes in.


Anonymous Anonymous said...

Sage advice - always listen to your mom. Isn't amazing the older you get the smarter mom has become! My grandfather once commented he had active charge accounts all over town. He said it was the only way he could be certain people would miss him when he was gone.

September 03, 2009 1:52 PM  

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