Spreading the Gap

Earning money any way you can, that's the true nature of capitalism.  But is that nature hurting others?  I think it may with how someone goes about earning their money.

Credit card companies make their money by the interest they charge their customers.  The money they make off of this interest allows them to expand the credit they can give to other customers.  Though these companies have traditionally looked away from giving credit to low income houses, they've recently started to look to them as a way of making more money at the turn of the century.

And it's not just the credit card companies that are doing this, other businesses have made a lot of money by making offers to the less fortunate that appear to be good deals.  These offers only encourage the less fortunate to become deeper and deeper in debt.

An example of this is with Byrider, a used car lot which offers financing to those that aren't as well off.  Often they will sell a car with a high interest rate.  If the payments aren't being paid off, then they will reposes the car, keeping the money they have already gained.

Other places that offer rent-to-own deals do things similarly, though they aren't as obvious.  Renting to own can appear like a good idea, but over time you end up spending more money than you would have if you bought it at the beginning.

While these companies are earning their money, they are creating a larger and larger gap between the wealthy and the poor.  This is making it harder for those less fortunate to get out of the situations they're in, spreading the opportunity divide.

But it's not just the companies fault for this spread.  People need to educate themselves about the good and evil of credit.  They need to understand what credit is, how it's used properly and how it can hurt them.  A big part of that, and probably the simplest thing to learn about is interest.  Interest is where most people get bogged down by the numbers, not realizing that even if they pay the minimum payment, they'll not be making a dent in how much they owe with interest building up.

It can be hard to know where to start learning about credit.  In high school it was mandatory for all seniors to take economics as a semester class.  The class itself taught us the basics of how economics works, but not much of a practical use of this information.  I feel that a class in practical economics should be taught in every high school.  This would at lest give young adults a starting point for their knowledge so they can better themselves in the future.