Credit Cards and Hemlines
Even The Fashion Police can’t arrest this economy. The pain, suffering and torment of “Fashion Don’ts” have been surpassed by recession hell. How did this happen?
Basically, banks and mortgage companies lent a lot of people money they probably shouldn’t have. In turn, people invested in properties which cost more than they could afford. The idea, was that property values would continue to increase (and, why not, they had been for years) and everyone would make money. Everyone forgot that what goes up also comes down.
Fashionista’s already knew this – hemlines fluctuate between micro-mini and trains depending on designer’s collective will. The economy, like skirt lengths, has proved subject to the same kind of whims. In fact, in the 1920s, the economist George Taylor conceived the hemline index, finding that skirts got longer as the economy slowed. Lately, there’s been talk of a haircut index, with short locks signaling a declining economy. Bob’s have been all the rage – perhaps Katie, Posh and Gwyneth are onto something?
The next part of the crunch will be credit cards. A credit card is a small, but powerful, piece of plastic. It allows you to buy something now, today, this minute, when you want it, on credit; meaning you don’t have to pay until the bill comes. Unless you pay the bill in full each month, in return for letting you borrow money credit card companies charge you a fee. These charges are interest and the amount of interest is called the Annual Percentage Rate (or APR). Since there really is no such thing as a free lunch (or dinner…often someone wants SOMETHING for it), credit card companies charge a big fee for letting you borrow money from them.
In the coming weeks and months credit card companies may raise these rates – which means, if you do not pay your bill in full, it will cost you more to use your credit cards. They will also certainly make it harder to get a credit card, transfer balances from one card to another and, if you have a line of credit (an amount of money you are pre-approved to borrow at any time) they may reduce the amount of the line and thus how much you can borrow.
The very best thing you can do for yourself? Pay off any outstanding credit card debt you have as quickly as you can. If that means putting your cards away (out of sight is, after all, out of mind) then do so. The reason for this is so that you have as clean a slate as possible – that way when you need your credit card you will be able to use it.
Add comment October 31st, 2008