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The big print giveth

By Steve Pierce | 29 October 2009

And the small print taketh away!

I consider myself pretty money savvy but I've been caught out more than once by the small print of a credit card agreement! A friend had some money on a balance transfer at 0% and some at nearly 20% from his Christmas shopping. He paid off a good chunk each month - but the money always came off the cheaper 0% rate first, so interest continued to mount up.

It's like a Las Vegas casino: you think you are good but the house always wins! The government has now proposed to limit the tricks of the credit industry trade:

  • no more hiking credit limits without prior permission;
  • no raising of interest rates on existing loans
  • higher interest rates to be paid off first
  • raising minimum payments to pay off debt first
  • a ban on unsolicited credit card cheques

This matters because so much of finance revolves around the relationship between borrower and lender. It's not always an equal relationship as Proverbs 22:7 indicates: 'as the rich rule over the poor so the borrower is servant to the lender'. The lender is rewarded for risk but should not abuse the relationship.

Likewise the borrower should not enter into the relationship lightly. As well as the financial implications, credit also affects the relationship between waiting and wanting. Two years ago my wife and I bought some furniture on the never never. It arrived the following week and two things happened. It was nice stuff but we never stopped to say thank you or paused to appreciate it. There had been a wanting but no waiting, no celebration. Then we looked around and said “What else does this room need to finish it off?”.

A wise relationship with money runs deeper than managing well. That is why Baptist minister Bishop C. Vernie Russell says

“You can’t serve the Master and the Mastercard!”

"Credit buying is much like being drunk. The buzz happens immediately and gives you a lift... The hangover comes the day after." Dr Joyce Brothers

"Credit is a system whereby a person who can not pay gets another person who can not pay to guarantee that he can pay." Charles Dickens

The goverment proposals

Consultation details (closes 19/1/10)

Money Education, 1960's style [vid]

In debt we trust (Provocative film on credit; 90mins. Stars Bishop Russell!)

Steve Martin: Stop buying stuff [vid]

Buy Nothing Day (28 November)


Steve Pierce
Posted by Steve Pierce

Steve Pierce was born, raised, educated, ordained and employed in Liverpool and is the Director of Learning and Stewardship for the diocese of Liverpool. He supports, of course, Everton.


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