Nick Farina: There really isn't any other perspective to have. That's just how you're supposed to do it. The thing is, it's true. Their business model is of course based around people not doing that. So you can certainly argue that the good customer is in fact the customer who gets in trouble. But if you want to be responsible and you want to avoid hassle, credit cards can be a great tool. You can build rewards. It's a safe way to make payments. They can give you purchase protection plans oftentimes – I love American Express for one. They give you convenience. You don't always have to carry cash on you. If you pay it off at the end of the month on time, I can't stress it enough, you're not going into trouble. That's something that people really need to realize and get into their minds.
Monty Loree: Exactly. Credit or banking or contracts of any sort are very simple. If you make your payments on time as agreed, life is good. As soon as you miss a payment, the alarm bells go off and a hundred different things happen. So it's smooth sailing when you keep the agreement but it's not smooth sailing and it sets off a bunch of alarm bells if you don't make your payments. Even if you one day past the agreed date, you're going against the contract or breaking the contracts.
Nick Farina: Exactly and not to linger on this point too much, but I'm working with the City of Chicago's Treasurer's Office on developing this set of videos to teach young people about finance. One idea that we've all come up with is simply that, and this is a true situation around the world these days, is a young person walks into a pizza shop and says, “Hey I'd like to order that,” the pizza for $10.00 and the guy at the counter says, “Well wait you're putting on your credit card and that's going to be $90.00.” The person says, “Why?” Well, here's what's going to happen. You're not going to pay your bill on time because you're going to get $40.00 of interest over time by making other payments. Then you're going to end up paying your bill two days late because you overslept your alarm or something. Then you're going to get a $40.00 late fee too. There's an unlimited amount of ways that they can make your life miserable, that you don't pay on time or you don't pay this whole balance. A lot of times, they're paying you money.
