Sample College Admission Essay: Why Credit Cards Should Not Have Existed

Admission Essay Prompt: Choose an invention that you think should not have existed. Defend your position.

I have always frowned upon the idea of incurring debt and planning to pay for them at a later date. Ever since I learned the value of money, I made sure to minimize possible liabilities and avoid owing money to someone. I prefer to either pay in cash or use a debit card to purchase goods. Whatever payment method I use, I want the receipt and my financial accounts to reflect the instant transfer of money. This has always worked for me and it allowed me to efficiently manage my finances without worrying about debts and credits. This is also why I think that the existence of credit cards is unnecessary and can often be more disadvantageous than useful.

The concept of credit began thousand of years ago. In ancient Mesopotamia, merchants utilize the concept of credit to purchase goods and pay for them at a later date (Frankel). In the Old West, farmers and ranchers also utilized the concept to receive goods from merchants and pay them once they have sold their crops and livestock. These data indicate that the concept of credit began early in human history which could mean that it could have a large impact on human progress. For example, certain key organizations and figures may have utilized the concept of credit to build historical sites and objects. With this, it is important to note that the subject of this admission essay is the invention of credit cards and not the concept of credit. I think that credit cards should not have existed but also acknowledges the utility of the credit concept.

The first actual credit cards were metal plates that businesses issued to their customers. The metal plates or “charge plates” acted as store cards that customers can use to purchase goods in a specific store through credit. The first official credit card was the Diners Club Card, which members of the Diners Club used to pay for restaurant meals. The card charges the meals to the Diners Club while the members pay the Diners Club each month for their purchases. Eventually, banks adopted the concept of credit cards. The Bank of America issued the BankAmericard that gave customers a $300 credit limit. However, this issuance led to high delinquency rates and rampant fraud as customers took advantage of the credits. 

While this failed attempt led to the strict policies for obtaining and using credit cards, it also emphasizes my point on the existence of the cards. Allowing individuals to purchase items and pay for them at a later date can promote unhealthy financial decisions. Since credit cards give users the benefit of purchasing items instantly, the temptation of buying beyond one’s financial means is greater. For example, an individual may be walking by a phone store and see the new iPhone product. Due to manipulative advertising , they may decide to purchase the $1,000 phone despite having a salary of $.7.25 a day. The temptation of utilizing their credit card to purchase the phone is greater since they can rationalize that they will have the $1,000 by the billing date. If credit cards do not exist, they may refrain from purchasing the unnecessary product or take the time to save $1,000 and pay through cash or debit. 

The difference between the two processes is simply the time in which the individual receives the product. With a credit card, they can instantly take possession of the phone while paying through debit suspends the time of acquisition. If the individual chooses to save the amount, they may need to wait for six months or more before they can purchase the product. However, the latter process comes with less risk and better financial decisions. It completely avoids the risk of going into a $1,000 debt and promotes the healthy practice of saving money. Additionally, it provides an individual time to think about the purchase and assess if it is a healthy decision. The temptation of credit card use can often blind individuals to their current financial status and make them create rash decisions.

Aside from promoting unhealthy financial decisions, credit card use can lead to accidental non-refundable purchases costing thousands of dollars. There have been many reports of children using their parents’ credit cards to purchase items in online games. Since credit card companies only send bills by the end of each month, most parents find out about the purchases then. By this time, most refund policies will not apply, thus, leading parents to pay for accidental purchases. Some reports even mention children emptying their parents’ savings accounts, placing them in difficult financial situations. The various news about these accidental purchases implies the ease of access to credit cards that even children can use them. These situations illustrate my preference for debit cards instead of credit cards. If the parents utilized debit cards, their banks may have notified them about the large expenses and they could have instantly reversed the transactions.

Additionally, these accidental purchases do not only affect parents and customers but also companies that utilize credit card transitions. Due to the accidental non-refundable purchases, some parents filed lawsuits against the companies that sold the items. In 2014, the lawsuits led Apple, Amazon, and Google to pay settlements to parents amounting to millions of dollars for the accidental purchases (White). While the parents have the right to file the lawsuits, I think that the companies should not have to pay the settlements. The accidental purchases were due to the parents’ poor credit card management and their decision to use credit cards. The companies are simply offering their services and have no control over the approval or denial of the credit card transactions.

Lastly, I think that if credit cards did not exist, individuals are more likely to live within their means. Without the temptation of credit card use, individuals are less likely to purchase unnecessary things. An employee that earns an average salary will avoid purchasing iPhones annually despite the good condition of their current devices. Parents that have to pay for their children’s education will not link their credit cards to online accounts and prevent accidental purchases. The nonexistence of credit cards may even lead some leisure items to become cheaper since companies will have to adjust their prices to the means of their customers. Without credit cards, they cannot entice customers to purchase expensive items and pay at a later date.

Despite my negative perception of credit cards, I think it is noteworthy to state that they can have their use. During the coronavirus pandemic , many parents have admitted to having incurred credit card debt along with other debts (Hess). This is due to the high unemployment rates and the overall poor performance of the economy. Credit card use allowed these parents to purchase necessities for their families. In this regard, I cannot argue about the advantage of credit cards. Still, personal and bank loans may be other alternatives if credit cards did not exist.

If credit cards did not exist, people may be more cautious of their purchase decisions and develop better financial literacy. I, as an individual that avoids using credit cards, think that the invention of the credit card is a discardable bookmark in history. The world may or may not be the same without its invention; but since there are many payment methods, the world may be better for it. There is no way to guarantee the effects of the nonexistence of credit cards and the only thing that we can do is responsibly utilize them. Individuals must be aware of the disadvantages of the cards, act with common sense, and develop financial literacy.

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Works Cited

Britannica, The Editors of Encyclopaedia. “Credit Card”. Encyclopedia Britannica. 2021. https://www.britannica.com/topic/credit-card. Accessed February 6, 2022.

Frankel, Robin. “Invented: The History of Credit Cards”. Forbes Advisor. 2021. https://www.forbes.com/advisor/credit-cards/history-of-credit-cards/. Accessed February 6, 2022.

Hess, Abigail. “Survey Finds 36% of Parents Have Taken From College Funds to Cover Coronavirus Costs”. CNBC. 2020. https://www.cnbc.com/2020/05/27/survey-finds-56percent-of-parents-have-taken-on-debt-due-to-coronavirus.html. Accessed February 6, 2022.

Kleinman, Zoe. “My Son Spent £3,160 in One Game”. BBC. 2019. https://www.bbc.com/news/technology-48925623 . Accessed February 6, 2022.

White, Alexandria. “Who’s Responsible For Your Kids’ Unauthorized Credit Card Charges?’. CNBC. 2021. https://www.cnbc.com/select/whos-responsible-for-kids-unauthorized-credit-card-charges/ . Accessed February 6, 2022.

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