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Credit cards and the illusion of wealth

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David Goldman/AP Photo/File

(Read caption) Credit card logos are seen on a downtown storefront as a pedestrian passes in Atlanta. Hamm warns of the illusion of wealth credit cards can create.

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When I was a lot younger – freshly married and child-free – I spent a lot of time with a small group of young professionals who were in fields similar to my own.

We would go out to eat for lunch a few times a week. We went out for drinks quite a few nights each week. Sometimes, we’d meet up for other events as well.

A big part of that group was professional relationship building and some friendship building, which was helpful. At the same time, though, that group involved quite a lot of “oneupsmanship.” All of us were reasonably successful young professionals, but almost everyone in the group wanted to be seen as a very successful young professional.

How did we show it? We used the same method that an awful lot of groups use – we bought expensive items and expensive meals to show off our affluence. 

We ate at expensive places. We had only the best drinks. We went golfing with nice clubs. We drove shiny vehicles. We had the latest gadgets.

Of course, we all also had student loans, and none of us were really earning that big of a salary.

Still, we were able to pretend to afford all of these things. We were able to play the role of earning a lot more than we were actually earning. For a while, anyway.

Credit cards can pay for anything, and if you have a decent salary and no missed payments, you can easily get a pretty big credit limit.

A person can make $40,000 a year, yet spend like they’re making $60,000 or $70,000.

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