The one thing my parents taught me was exactly how interest works. So, when I got to college in the late 90’s, I avoided the credit card company tables like the plague. My friends and dorm mates snapped up the hats, t-shirts, and knick knacks along with the credit cards they were subsidized by.
One night, I’m sitting in my friend’s room and notice that he has a new CD changer. On top of that, he’s ordering pizza for the third straight night. We came from similar economic backgrounds and I was broke as hell, so I asked him how he was making all this dough. “Oh man, I just charge it, and then pay $20 on it each month.” I began to tell him that he was only paying interest, and if he’s only making $20 payments, he’ll be paying that card off until he’s 30. His face suddenly fell, kind of like when a dog figures out that the steak you’ve just made isn’t for him.
This guy, along with my some of my other pals, had to take on a second job and cut way back on everything to help pay down that stereo and all that pizza. I was still broke, but at least the money I made went to my bank account and Playstation games. games.