Skateboarding Articles
Sk8 Debt - Credit card companies will always want to use you. DON'T LET THEM!
Imagine my surprise when this little gem arrived in my e-mail inbox from Darkstar:
"Get your Darkstar Skateboards reloadable, prepaid MasterCard!"
I click on the subject and discover some scumbag bank has convinced a few skateboard companies to sellout in the name of getting kids to buy more of their crap. I'm not saying that the companies involved sell poor quality products, but what does it say when your Mastercard has the Darkstar logo on it?
I subscribe to a variety of sk8-related newsletters and receive a quite a few on daily basis. This offer seemed particularly odd - even more when I opened the e-mail and confirmed that a host of skate companies have sold our their names, logos, branding and reputation to First Premiere Bank (pursuant to license by MasterCard International) with the catchy name Myplash. OK, its not a as much a catchy name as a playful Mtv-ish cover for a bank looking to get its hooks into kids who think having a credit card would be cool - especially if it has a sk8 logo on it.
Maybe your friends think it's cool (in which case, get new friends), but its designed to inspire you to spend more money on the Darkstar brand - or whatever brand you select for your ridiculous card.
Credit -vs- Debit
If you're contemplating getting a real credit card or a fake one that's reloadable, it's important to know the difference between credit and debit.
- Credit - means a bank is issuing you a credit line that you are responsible for paying back - usually monthly in small increments. They may give you $5,000 up front and you can go wild spending it all on the first day, but beware of the interest you'll also have to pay.
- Debit - A reloadable debit card (like the myplash) is like one of those cell phones for which you buy minutes as you go. If you add $300 cash to your card, you then have $300 to spend on it.
Lets say you are able to spend that whole $5,000 credit limit you got on that real credit card. The allure is that you can spend more than you physically have to spend. You can blow the whole $5k even if you only have $100 in a savings account. But you'll pay later in interest fees. The monthly minimum payment will likely be around $150 - $200. However the bulk of that money is going toward the interest, not the principal (the $5k you blew through). So each payment may only be $150, but you're only paying off $12 of the actual loan. The remaining $138 is going to the credit card company or issuing bank in the form of interest. You'll be paying off that money for more than a decade and if you manage to pay it off, you'll have spent a small fortune in interest... all because you wanted to go buy some stuff.
Most of the stuff you bought will be out of date or broken by the time you pay it all off.
That sucks! So you're thinking a debit card like the ones above may be a good idea.
Yes and No.
Don't Get A Credit Card!
Both the credit card and the reloadable Debit Card have flaws and traps. Nothing in life is free or as some people have said, "There ain't no such thing as a free lunch".
If you're worried about how easy it will be to get into debt, then avoid the major credit cards like the plague. They want you to fall into their trap and get into debt - they collect all the interest. But don't assume that the reloadable debit card is free and easy.
There are plenty of introductory, set up and maintenance fees that will get you. The convenience of having any type of credit card can easily be nullified by these hidden fees. The bottom line is don't get a credit card just because it has your favorite skater or sk8 company plastered across it. That doesn't make it a good idea.
If you need a credit card, consider getting one through the bank you use or investigate various interest rates. Make wise decisions. Debt can cause problems you never knew existed.
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