In olden times, those who ended up burdened with debt they could no longer pay back would end up in Debtor's Prison which was essentially a sort of "work house" where you'd be incarcerated until you either worked off your debts, or someone made good on the debt, on your behalf.
Although we no longer have debtor's prisons, we still often use terms like "debt trap" and "debt slavery" to give name to the way people so easily can end up trapped by their borrowing.
"Mine?" My ass....
Debt Traps Take Many Forms
I often think about how our own kids labor under the burden of student loans they will likely continue to make payments on for another 10-20 years.
Here in the US, there are so many people bucking under the weight of "medical debt;" and all that happened in their world was that they had an accident and suddenly found themselves $50,000 in debt for a hospital visit.
I know how easily that can mess up people's lives: in 2011 and 2012, Mrs. Denmarkguy had rotator cuff surgery on first one shoulder, then the next. EVEN THOUGH it was basically outpatient surgery (no overnight hospital stay) AND we had medical insurance that was costing us $633 a month, the result was still that we had more than $25,000 worth of out-of-pocket expenses... and many of our current financial woes can be tracked back to there.
I don't THINK so...
But the worst culprits that effectively place people in some latter day version of "Debtors Prison" are really credit cards and personal loans.
Once you get ensnared, it becomes virtually impossible to extract yourself again.
Now, keep in mind that I'm not talking about people who are simply reckless and irresponsible with money, I'm talking about normal working folks who suddenly find themselves with a major car repair and have no choice but to charge $2,000 (they can't actually afford) to a credit card or a personal line of credit... because if they don't, they won't be able to get to work, and then they'll basically be out of a job.
I get lots of offers in the mail, and some of them are outright mindblowing!
A recent "offer" tells me that I am pre-approved for a personal loan of $1,000... all I have to do is check in and accept the terms and conditions.
Of course, the "terms and conditions" are almost impossible to find, and unless you actually stop and pore over the extremely tiny print, you wouldn't see this:
Bottom line: They hand me $1,000 and a little over a year (60 weeks) later, I will have paid them back $4,437! This results in the staggering APR of 378%...
NOTE: This is simply an illustration, I'm not actually in the market a personal loan of any kind. However, this is an example of how debt can become a trap and not unlike a psychological prison, in no time at all.
Now you might be thinking to yourself "Who'd be stupid enough to TAKE such an offer?" and all I can say to that is that the world is full of desperate people who may be perfectly normal hardworking folk who are always just a whisker from the next financial disaster.
But no matter how you turn it, THIS is basically the 21st century version of (voluntarily?) putting yourself in Debtor's Prison!
So.. Don't DO it!"
Thanks for reading, and have a great remainder of your Sunday!
How about YOU? Do you have any debt? Does it feel like a trap; like shackles around your life? What do you think of offers like the one shared here? Comments, feedback and other interaction is invited and welcomed! Because — after all — SOCIAL content is about interacting, right? Leave a comment — share your experiences — be part of the conversation!
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Created at 20210808 12:52 PDT
0315/1558