Election Break – Cash Still Counts & Daylight Savings Time is Bad for the Economy!

If you’re like me – you need a break from the election campaign news. On the election, the best I can say is that Tuesday it should all end and we will have elected a new leader of the free world! Whatever happens – and that could be a lot of things – rest assured – our republic will survive and the “Separation of Powers” clause will become more important than ever – no matter which candidate wins!

Now for the diversion. In the Wall Street Journal today I noticed two interesting articles. On the light side, a study out of California concluded that the switch to and from Daylight Savings Time actually has a negative impact on economic spending because the amount of extra spending that occurs when we create an extra hour of daylight at day’s end is less than the loss of spending that occurs when we take away the extra hour of daylight! Imagine that. As for me, I’m glad they are not going to change it in the Fall – since we Fall Back tonight and get to enjoy an extra hour of sleep on Saturday night.

Daylight aside, another article in the WSJ indicates that in spite of the multitude of ways to pay for goods other than cash – debit or credit card, electronic, check or other – Cash is still number one – representing the preferred way to pay among 32% of the public in 2015 in contrast to 40% in 2012. That is a decline of 8%, but it did not all go to debit and electronic. Here’s the breakdown, Debit Cards gained 2%, Electronic Gained 4%, Check’s declined 1% and Credit Cards increased 4%! It is the increase in credit card payments that disturbs me for two reasons.

First – you’d certainly think that electronic and debit would be the big gainers – given the advent of the electronic technology and the tendency of millennials to avoid credit – but here we find Credit Cards right there with the electronic and increasing at twice the rate of debit cards. The second thing that disturbs me is that this is a 2015 comparison and we know that credit card debt has significantly increased this year – 2016, which means when all is told – Credit Card payments are more likely the lead gainer. I often notice when waiting in line at a fast food outlet or drug store, how many people pay with credit cards for relatively small purchases. I understand the situation – believe me – more so than probably anyone – but I find it painful because the vast majority of those people are not paying on credit to “get points” they are paying to defer the payment and that means they are paying interest.

Here’s the rub. The interest on one Taco Bell meal of $10.00 – at 20% is $2.00 per year. That may seem like a good deal, but it’s just the beginning. Before you can say “Charge It,” the credit card balances accumulate to $20,000 or more – and then you’re paying $4,000 per year of interest – and over 10 years that’s $40,000. This money is a waste – you are getting nothing in return for the interest you pay. Break this habit and save the interest for retirement and guess what – you will have a life after your work days that you can enjoy!

If you or someone you care about is in this trap – here’s the solution – attend this coming Wednesday’s seminar – “It’s NOT a trick, it’s a TREAT to get out of Debt.” The seminar is FUN, FREE and you even get a free copy of my book Dump Your Debt. Information to sign up is below.

Enjoy the great weather this weekend and be sure to VOTE ON TUESDAY – your voice counts and needs to be heard – whichever way you see the election.

Regards,
Ken