Spring 2003
Instant Gratification
by Carrie Meredith
“I spent $1,355.72 on my credit card in two weeks and all I have to show for it is some bar tabs and new clothes,” University of Washington graduate Megan Hubner said.
Hubner said she spent money because it alleviated her depression and stress.
“When you have money, you are never alone,” she said. “You always have something to do. What makes a person feel better than spending a lot of money when they are feeling down? With a credit card you get immediate gratification. You don’t have to save up money to buy what you want, it all gets charged.”
Four years after finding a credit application at the bottom of her bag while buying books from the University of Washington bookstore, Hubner found herself $9,600 in debt.
Since overcoming her debt, Hubner is very conscious about how she spends her money. Her checkbook is balanced and she knows where she spends each penny. She said having such a negative experience with credit cards made her realize how easy it is to slip into an unmanageable amount of debt. She said since she overcame her debt she is much happier and more in control of her life.
Robert Rylander, executive vice president of Alaska USA Federal Credit Union, attributes the extreme amount of debt in America to the change in technology during the last 50 years and American’s need for material wealth. Because of access to credit, material possessions are easier to obtain than they were decades ago. The increased consumption leads to environmental degradation while debt places strain on lower-middle-class Americans, he said.
“We abandon traditional family values in favor of consumption,” said Kenneth Gould, sociology professor at St. Lawrence University and co-author of “Environment and Society: The Enduring Conflict.” “Spending quality time at home with your family, or playing softball, or going to a town meeting or church is bad for the economy. Folks used to spend a lot more time doing those things, partly because wages were higher so less work was required, but also because those activities were considered important and fulfilling.”
Gould said Americans are working more and spending more, which affects their family lives and their health.
“Americans work longer hours, spend less time with their families and in their communities, and they stick with a job they don’t like, or look for jobs they’ll like even less if they think they can pay down the MasterCard faster,” Gould said. “When people are economically desperate they will do almost anything to get cash quickly. After working two lousy jobs for low wages, people rightly feel that they deserve a little reward, a little pleasure in life.”
He said the media has made the words “reward” and “pleasure” synonymous with material consumption. Because of this, when workers head to the mall they use credit to buy possessions when their bank account can’t cover the bill.
“There was a time in this country when people saved for years to buy themselves things like a new car,” Gould said. “People didn’t consume now and pay later, they saved now and consumed later.”
Today credit is available to anyone.
“Credit cards are everywhere,” said Erica Fleming, a former Mervyn’s California employee. “I remember getting credit card offers in the mail as young as 15. Now I get at least one per week in the mail.”
Fleming said she saw flyers for credit cards at Bellevue Community College and a credit card table offering incentives such as free shirts and Frisbees to students who opened a new credit account at the beginning of the school year. She said when she worked at Mervyn’s she had to ask every customer if they would like to open a Mervyn’s credit account. As an incentive, employees would receive $1 for each account they opened.
Fleming said one of the reasons she quit working at Mervyn’s was because she felt uncomfortable pushing credit cards on customers. Mervyn’s offers a 15 percent discount on the first purchase made on a new credit account and an additional 10 percent off after $250 in purchases.
“Inequality, advertising and the corporate ideology that debt is ‘normal’ is what makes people go into debt,” Gould said. “People in the U.S. are saturated with media images portraying elite lifestyles that the economy will simply never make available to them. As a result, we all feel relatively deprived, even folks in the top 10 percent. We are bombarded with advertisements that essentially tear down our self-esteem. The result is consumption becomes a form of self medication.”
In 2000, Western Washington University’s Prevention and Wellness Services conducted the National College Health Assessment. The survey found nearly 15 percent of Western students have more than $1,000 in credit card debt.
Rylander said debt at a young age is a problem because students are not educated enough to make the decisions necessary to own a credit card. For example, Hubner spent her money on alcohol and new clothes.
College students are not the only people acquiring debt. According to the Federal Reserve’s bi-annual consumer survey, 44 percent of families in 2001 had credit card debt. Most debt — 70 percent — was attributed to buying a home and 16 percent of all debt was due to consumer loans and credit cards.
Gould said consumption associated with debt is also affecting the environment at many levels.
“All consumption requires natural resource depletion and waste production, from buying an SUV to buying medical care,” he said. “If you want to reduce your impact on the environment, don’t buy.”
Gould said while reducing purchases is the answer to preserving the environment, many people are not willing to give up their material wealth. He said not everyone holds the same views he does on the issue of debt being a contributor to harsh environmental impacts.
“Without the ability to borrow money, few families would be able to acquire the necessities of modern life, which include a decent place to live, appliances for cooking, machines to clean their clothes and houses, reliable transportation to get to work, go shopping and visit their families, fix their teeth, have an operation, take a vacation, go to college or buy a toy,” Rylander said. “Without debt, the world economy would collapse and the human condition would materially suffer.”
Rylander said debt is one of the repercussions Americans must deal with to be able to live the way they do.
Alaska USA has 250,000 members and $1.2 billion in consumer loans, Rylander said. The credit union is currently making $65 million to $75 million per month from these loans. Among the 250,000 members, 46,000 have credit cards and 96,000 have consumer loans.
Rylander argues debt is good and is inevitable in a consumer-based society. He said he looks at debt in a positive and logical manner. His company is one of many that make acquiring debt possible.
“The question is, are we and the environment better off with debt and the lifestyle of the first world, or without debt and the lifestyle of the third world?” Rylander said. “I think I would rather deal with our problems than theirs.”
Gould said some debt is inevitable but Americans consume material goods at the cost of the environment and natural resources. The instant gratification from credit obscures people’s ability to see the end result of damaging the environment and their financial future, he said.
“People carry a larger debt load now than 50 years ago,” Rylander said. “Their expectations for acquisition of material wealth are higher, things cost more, credit qualification is easier, bankruptcy laws are much more forgiving and the stigma of failure to pay has dissipated.”