Cutting out Credit Cards: Living Within (or Beneath) our Means

Cutting up Credit Cards

There’s more to buying that high-tech gizmo or fancy new clothes, especially if you put it on plastic.   If you’re anything like the so-called average American with combined balances on your credit cards pushing upwards of $10,000 per household, then you’re paying a lot more than the purchase price after factoring in an exorbitant interest rate on the unpaid balance.  Just one credit card with a balance of $15,000 and a monthly minimum payment of $300 based on an interest rate of 13 percent would take nearly twenty years to pay off, amounting to nearly $9,000 in interest, according to the website

To save or spend?

This raging debate among economic recovery pundits mask the reality that based on our current “free trade” global economic system, what we really mean by spending is consuming.  And in this global free trade system, ecological costs are “externalized” if we use the correct economist’s jargon.  As a result, we pollute, destroy and exploit where ever we can.  If you can’t do this in the United States very easy thanks to national laws and regulations, well then, export your manufacturing and service operations to places that don’t have many, or any, regulations.  Then import these products back into the U.S. to sell at a big box store, plopped down where there used to be viable farmland.  For example, these BIG companies move operations to places where poor people can sort through toxic junk computers for scrap or to places where throwing something away can’t possibly ruin our own clean air or water in our communities.

According to Emily Kaiser’s analysis for Reuters:  “U.S. President Barack Obama needs to convince Americans to spend now and save later in order to get the U.S. economy back on solid footing.”  It doesn’t have to be this way.

How are we going to grow spending with millions of American’s without jobs, without health insurance, with nominal (if any) “emergency savings,” dwindling 401(k)s, perhaps, even, without a home?  We will not, or cannot, unless every one ends up working for the government, perhaps helping out with the U.S. census.  Putting it on credit cards is not a sustainable way to go either.

Millions of Americans now recognize this path we’re on.  They’re cutting back, if not trying to pay off altogether, their credit cards.  According to Lucia Mutikani for Reuters (April 7, 2009), “revolving credit, made up of credit and charge cards, plunged at a 9.7 percent rate, or $7.79 billion in February [2009], the largest dollar drop since the Fed started tracking the series in 1968.”  So Americans are finally saving some and cutting back. Many Americans, like my family, are growing at least some of our food, exchanging items for free within our communities, or in various ways choosing to simplify and live within our means.  Now I have more time to hang out with my son!  Credit card users beware, however.  If you stop using the cards long enough, the BIG banks that issue them will simply close your account.

Here’s the sustainability story not told often enough.  Despite what the BIG bankers, economists and BIG government might claim, our economy operates under the laws of nature, not just the laws of supply and demand.  That’s right.  Nature runs its course in cycles (spring, summer, fall, winter) and so, too, does our economy.  Our economy is based, in part, on natural resources on a finite planet, so our economy cannot grow infinitely.  Ecopreneurial enterprises, whether for profit or non-profit, recognize this, guided by the “triple bottom line.”  So do conserving customers who prioritize their values when making purchases, values like vibrant local communities, healthy foods grown organically and where fair “living wages” are paid to those to offer the products or services.

Mindfulness, not abstinence

I’m first to admit, the use of a credit card is both convenient and, since I pay the balance off every month, a nice way to get a short term “loan.”  Using a credit card also allows me to track just about every expense (I don’t even know how to use a cash machine).  Talk about budgetary control and understanding.  But the most important aspect of my family’s spending is its priority of being a tool for mindfully making the changes we want to see happen in the world.  For items we don’t grow ourselves, we support our regional food cooperative (Willy Street) which, in turns, supports local farmers and fair trade relationships, for example.  For other purchases, we see our role and responsibility to invest in the restoration economy, patronizing those companies that care as much about the planet and its citizens as we do.

There are many who feel living at or below our means will bring about a Depression.  My experience, however, as reflected in my books, ECOpreneuring and Rural Renaissance, is that the change we’re seeking is exactly the kind of change that such change in our approach to wealth, money and consumption might bring.  A caveat, however, is that this kind of a future based on community, collaboration, self-reliance, cooperation, and personal responsibility are the types of values BIG corporations cannot sell, or profit from.

To be fair to President Obama, he does understand that the change we seek starts with us.  Here’s what he said recently at the G20 Summit:  “In order for growth to be sustainable, it can’t be based on speculation, it can’t be based on overheated financial markets or overheated housing markets, or U.S. consumers maxing out on their credit cards, or us sustaining nonstop deficit spending as far as the eye can see.”

I would agree with everything he said except for the part in calling us “consumers.”

Photography: John D. Ivanko/

Written by johnivanko

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