Brainwashed to Borrow: Six Lies Lenders Use to Keep Borrowers In Debt
by Mogamahttp://mogama.info
Lie #1: The language of lending: Borrowing money is called anything but debt. Debt's many nicknames include note, mortgage, line of credit, home equity line of credit, buying power, charge card, charge, plastic, loan, pay-day loan, cash advance, commitment, lease, the American dream (nickname for mortgage or home loan), etc.
Lie #2: Borrowing is necessary. The certainties of life are no longer just death and taxes. Debt is the third necessity of what it means to be American or human. Indebtedness is needed to fuel the good life. You'll have to make payments on a car loan until you die. So get used to it.
Lie #3: You need a good credit score as your ticket. This lie has caused people to be more concerned about building their credit, creating credit, or repairing their credit. Why? So they can get approved for that car loan, home loan, or vacation loan. With this mindset, having no credit is worse than having no debt.
Lie #4: Your only question that matters is, “Can I afford the monthly payment?” This lie hides the true cost of borrowing. Thus, the borrower fails to see that he will eventually pay close to three times the cost of that $100,000 house, or $5,000 more than the ticket price of that car. The borrower rarely factors in the cost of taxes, insurance, and maintenance associated with the house or car.
Lie #5: Renting is throwing money away. This lie pushes millions of borrowers into taking on home loans long before they are anywhere ready for such a financial obligation. To say that renting is a waste of money is like saying, buy the hotel instead of paying for a room for one night or one week. It's like saying, buy your own taxi rather than pay a cab driver. Here's the common sense truth: If you're sleeping in the house you're renting, you are not throwing money away; you are meeting your need for shelter, and you are no less financially responsible than the debt-bound “home owner”.
Lie #6: The economy cannot function without debt and borrowers. The American economy is designed to run on the engine of lending and borrowing, which guarantees the creation of debt. This thinking equates spending with borrowing, as if every consumer has to borrow in order to spend money. The truth is, we can spend money without borrowing; we can spend the money we actually have, and that will help the economy. Won't it? The lie that debt is necessary to the economy makes many people feel like they are doing the economy a favor, or that they are even being patriotic when they borrow to spend money they don't have just to feed the economy.
Can you think of other lies that lenders tell us to keep a stranglehold on their financial slaves?
Article submitted Tuesday, January 12, 2010 & read 128 times.
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