As would be expected from an executive with a credit counseling agency, I read with interest most nationally published articles relating to the wise use of personal credit. In a world where often the term “credit” has a bad connotation – the insightful article (WSJ – Say “Au Revoir” to Your Credit, May 3, 2013) by Karen Blumenthal discusses what happens to the average US consumer when they suddenly lose their credit score and thereby drop out of the U S consumer credit system.
With stated appreciation to Ms. Blumenthal for raising the issue, I suggest that another lesson learned is that the wise use of credit is not an inherently bad activity. Unlike some commentators who pontificate on the subject of credit and therein describe its use as a near sinful undertaking, the wiser approach is to educate the consumer on the “how and why” of consumer credit. Leverage and liquidity have their places in a well-designed personal financial plan and can, when used properly, improves the lives of the users.
My children never realized how important the use of the family car was until they were restricted! No one really appreciates the accessibility and safety of electric lighting and refrigeration (and maybe climate conditioning) until the summer thunderstorm or winter snow storm deprives that individual of that convenience. Non-use or poor use of credit can bring about the same shocking reality. Let’s make the issue the wise use of credit, and not the credit system itself!