If you have a credit card with an interest rate over 20%, you are basically screwed if you get into a situation where your spending is tight and you get behind on bills. The interest will accumulate faster than you can pay it off, period.
And that is the entire point right there. People in general and the media love to posit that money problems are a problem of not having enough money. If you are in financial difficulty, the answer is to make more money, either by working harder, getting a better-paying job, or getting "assistance" or relief from the government in the form of handouts or debt-forgiveness. Anything else simply won't work!
But a funny thing, as I made more money in life - raising my educational level and job skills levels higher and higher - I found I was never off the money treadmill. It always seemed that the credit card bill was nagging and the monthly mortgage payment was anxiety-inducing, no matter how much more money I made. Of course, this didn't stop me from looking at new car brochures and spending my weekends dropping hundreds at the big-box store.
We lie to ourselves, and one of the biggest lies we tell ourselves is that our financial problems are external not internal. We would be on easy street if only we got a raise. That would solve all our problems right there! But raises come and go and not much changes, other than we find ourselves even deeper in debt.
Perhaps this form of living is a survival instinct. After all, we lie to ourselves about a lot of things. We aren't that fat. We are pretty handsome. We will live forever. Death is something that happens to the other guy, not us. If we had to be truthful to ourselves about all of the bad things that have happened to us and will happen to us, we'd probably flip out or suffer from anxiety attacks. Simply not thinking about death - or your nagging credit card bill is a lot easier way out.
When I started this blog, I "kinda sorta" kept track of my finances. I carefully organized every bill and statement into file folders, which were neatly labeled by month and year. On a moment's notice I could tell you what my phone bill was for May of 2005 - or my credit card bill. But I never bothered to look at the bill to see if I could lower it somehow or whether I was paying too much. Similarly, I never bothered to look at my credit card bill, other than to glance at the charges and then pay off as much of the balance I had left in my bank account after paying off the mortgage and other bills.
It was a pretty dumb way of managing finances - but a lot of people do it. And I was well into my 40's and still doing it. Maybe it was the financial crises of 2008 that forced me to re-think things. It caused a lot of people to react in one of two ways. Many did a lot of soul-searching and thought about what they were spending their money on and why. Others doubled-down their bets and lied even more to themselves convinced that nothing was their fault but that somehow the government or the banks had deceived them.
It took several years of tracking expenses to figure out that while I was making a lot of money, I was spending it just as quickly. Oh, we had a lot of fun, but the stress levels were pretty high as well. Selling off "things" and owning less turned out to be the path to real relaxation. Having a lot of stuff was fun, but a lot of work as well. While middle-class America might be able afford a mini-mansion, only the truly rich can afford the real deal - and the gardener, the maid, and the rest of the staff needed to maintain it all.
Am I totally 100% honest with myself today? No, not at all - that is part of the human condition. We all lie to ourselves to some extent, on a continuous basis. Confronting truths - ugly truths - is never a fun experience. It is a lot easier to believe in fun things, like Santa Clause and Guaranteed Minimum Income (I am being redundant, again) that to believe in sacrifice and balancing the books.
But deep down, of course, we all know when we are lying to ourselves. You can feel it, and you can see it in others. It is that certain, far-off look in the face of the tea-partier, who claims to be "overtaxed" when he likely pays little or no taxes at all, but rather is pissed-off because he owes the finance company for a Jet Ski he broke three years ago. It is that insincere smile on the face of the "progressive" who claims that if only the government would hand out more money, the massive unemployment problem (!?!) would be solved. They all know they are lying, deep down.