[With economy people are in the tide of credit. Banks are smart dealers of money; they have created credit market where we can plan your expense in present with the stipulation of earning in future. Author’s excitement of earning, saving and investing doesn’t last for long. Author is sharing his personal experience of how his simple calculation of saving and investing turned into reverse and complex calculation of saving and paying debts. He mentioned Bank as smart cheaters. Author admitted that he was in trap of Bank enticing calls for the varieties of product including credit card and loans. Author later realized that the benefit offered hides the charges. Here author shares that though cards are easy to get but it’s difficult to handle.]
We are in the era of credit and discount. Credit and discounts are new ways of doing business. The More you offer credit and 
Economy in Credit: Credit has given new concept to our living and the way we do our business. In this 21st century “no money is no more a matter of worry”. Even without much money in pocket, we can get credit facility; bank is ready and happy to borrow money for those who needed. Bank loves investing money on people. Bank considers people as “future of money” and “money in future”. For Bank, People who have idea, entrepreneur skill, and appetite of taking risk are the “future of money and money in future”. Bank like Venture capitalist is ready to fund on our idea and skill with a faith that in future we have ability to give money a “multiplier effect” by making “money earn money”.
Money has a swing: it can have either multiplier effect earning profit or discounting effect giving losses. Money can be invested through mechanism where money will earn money for us giving it a multiplier effect and this is where our skill, knowledge and risk taking appetite matters most. If money has multiplier effect, money keeps earning money, and $1 may earn much more than that and it can be like $10, $20 and may be much more. For money having discounting effect: if we invest in property and price of property plummeted due to reducing demand caused by the downturn in economy, freezing credit market, this will cause huge losses and we may not be able to recover even the principle we had invested in the property. People will start defaulting on loans, banks will reduce lending, business will slowdown and this down turn spiral will swing all over the economy effecting badly.
Who are smart dealers of money? Reckless lending will give enormous exposure to bank as bank may not be able to get the amount borrowed in return. But Banks are smart dealers of money. Since banks have created a market of converting their debts into securities, it can be sold out to the number of small and large investors all across the world. Thus Loans provided become highest liquid assets and this helps Bank to keep on generating money from the market worldwide for lending it to its new customers.
But what if underlying value of the securities goes down, for example loan given for purchasing property and value of property gone down. This pull down the value of securities and due to the poor performance of securities, it will be hard for bank to convert more of its fresh debtors into securities and sale it in market. This limits bank’s ability to generate more cash to lend to new customers. This ultimately freezes the credit market and with this millions of people and institutions who are holding the securities, with the underlying value of securities going down, the price of securities go down causing huge losses all across the whole world.
People in credit: Credit is ruling all facet of our living. Benefit of credit may be easily muffed if not handled carefully and 
Thought it was long time back, I still remember what one of my senior colleagues said to me one day, “Before I started earning money I stared accumulating debt and later it seems as if I am earning just to pay my debts.” It was a rainy day and he was smoking cigarettes and releasing his frustration. He added, “Now I feel as if I am living just for paying my debt, I am working hard, earning overtime, and whenever possible do some part-time job, even if I need to work at night I do it because I can’t simply keep on accumulating my debt.” I am into debt, he admitted. At the same time he was into illusion on: Do he really needs to save money if someone is there ready to lend him whenever he needed. This story of my senior colleagues was real, alarming and scary to me.
When I was young and doing my graduation, people around me were earning lots of money, they have great job, wear lavish suit, have nice home, car, go on vacation, keep on partying and so on … It seems they can afford every good thing this economy has to offer. This was the time when our economy was booming. During those days people were getting job like getting credit cards. As with the offer of credit card you just have to negotiate for your higher card limit, for job offer you needed to negotiate for higher salary and designation. Those were days where Job agent’s keeps on calling to the potential candidate and offer the job; just we need to go for interview to negotiate our salary and designation. Job was almost assured if we somehow had good education.
Getting job was easy for me too. Immediately after my graduation, I was offered great job having good reputation in market. Though this job was offering me good money, I struggled saving money. Later, saving money to me becomes critical, typical and almost impossible. With my first Job I got Bank account. Company opened my salary account with leading bank of the region. It seems like a combo offer and that really excites me. Soon after a week of opening saving account, I started getting enticing call from bank for credit card and various other loan products. That was really fascinating, and it really came to my surprise - for what they were offering me; it seemed they were offering me more than my earnings, more than what I could have afforded.
Due to the intimidating story of my Colleges I shared in beginning, I have been very serious with my salary calculation from very beginning. I started with maximize saving and minimize expenses. Though I started doing this successfully but could not continue for longer. Day I receive salary I used to be involved on deciding on how much could be saved and how much could be invested for more return. Though the saving and expense calculation was easier to me in beginning, later it grows complex and more critical. Later I couldn’t avoid the situation what my colleague encountered, and soon just after a year into job, my salary calculation started getting reversed. With my job I started living in reversed calculation. No more my salary calculation is on saving and investing. Now I am involved on calculation of - how much I can save to pay for my debt. To me saving money is getting out of the box question. It doesn’t seem I will be saving really good money in near future. Though I was burdened with the credit card payment, offer from bank doesn’t stop. I kept on getting calls for varieties of loans product. Though it was fascinating, it was more flashy, fantasy and scary.
Your bank is offering more than my appetite, but why? I questioned my Bank manager one day. He smartly replied back - you are young, you are ambitious; you are into very good job and hold good education. We are just investing on your talent and your youth and on the opportunities that lies ahead for you. We trust and believe in you and we are sure that you will be earning more and will be doing great in your career ahead. And we know that giving you some benefit like loan and credit will help you cherries your dream, afford the comfortable living, invest in the opportunity you look for, buy what you desire, provide fund to family, fund your own further studies and so on... We are funding you not only for your better future but for your bright future. Don’t you think this will help you ahead?........ Somehow I was convinced with this response of bank manager.
When I get first credit card I never inquired them about the charges. Later I realized that my credit card was not for free. I learned that the list of benefits more or less equal to the list of charges and fines - some of the charges were annual charges, high late payment fees (penalty), and overdraft charges.
With the credit market, our expense in present on the stipulation our earnings in future 
Article Written By :
Bijay Kumar Yadav
Administrator/Member
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