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Money in a rich man's world
by Richard Berman
2007-01-25 09:39:34 |
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Everywhere I look they are trying to push me and others to get a loan, apply for a credit card or buy now pay next year, but do we really need loans?
Ok, so many people get a loan to buy a house, this is normal because without a loan most people would have to rent, since we don't all have the odd 100,000 euros hanging around in our bank accounts to buy outright. I have about 18 years left on the loan for my place and I cannot wait, counting the years until it is all over, that extra money in my bank account each month to spend on what I like.
The quick loans are what really get me, this idea in Finland that has been around now for about a year. They are so easy and they do not check out if you can even pay it, all you need is a mobile phone, a Finnish address and ID number, and then the money is all yours.
Just text all this information to the company and within 10 minutes 100€, 200€ or up 300€ could be yours. You get 30 days to pay it back, with 25% interest added. So gone are the days when the young could not go out because they were low on cash because now they can now get it in advance.
During the summer this year, a company called hetilaina.fi, had ads everywhere you looked: Buses, bus stops, billboards and more…they went on a crazy marketing campaign. However, the great thing about this company is that they give you 13 months to pay back and you can borrow up to 2000€ and the interest on that is 19%.
I understand the fact that people need loans, not everyone has money to get the new car, buy some new gear for the house or pay the rent, but these kinds of immediate loans should be stopped. They are making it too easy for people to just say, "I can have that car, I can take that holiday, that new flat screen would look really good in my living. There is not much you can buy with 100€ to 300€ on a Saturday night, so these companies know where the money is going, which is why they keep their office open until 9pm on a Saturday.
My wife is one of those people that say, “If we cannot pay for it, we don't have it.” This has worked great for us because if you have the cash to buy outright, you also get a large discount on the items that we wish to buy. If you take these deals in the shops, buy now pay in summer 2007, you pay full price and in some shops, you get a store card, and they let you pay off the amount like a loan, so there comes the interest.
I think she is like this because years back when she met me I was one of the people these immediate loan firms target. I had the nice car, 150€ pairs of shoes and great clothes, but they all came at a cost. I had a good job that paid well, but I found every time I was paid most of it would go back into the bank to cover my overdraft, pay off the car loan and my credit card. As you can guess, my then girlfriend - now my wife - was not too pleased when she found out about how deep in debt I was.
Having a loan hanging over my head, for a long time, is very stressful, but I did pay them off. I was young and people were giving me money to spend on what I wanted, when I wanted, which is why these companies should be stopped. Allowing people to live on credit this easily is crazy. I no longer have the stress of the next red letter coming in my post box, everything I own is mine, and, with this, I am happy and stress free.
Ovi-lehti Ovi Finland Finance Economy |
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