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Plan Well, Retire Well

Saving and investing your money

Virtual Debt: Credit Moves to Facebook, Farmville

What do you use credit for? Buying a house? Paying for college? Keeping food on the table after months of unemployment? Well, here's something I didn't even know you could use credit for. Nope, not Starbucks. Not vending machines. It's not even real...

If you're into social media, you may be playing online games such as Farmville or Zoo World, Fishville or Mafia Wars. Have you been tempted to "invest" in some virtual goodies for your game that cost real-world money? BusinessWeek quotes Atul Bagga of research firm ThinkEquity as saying that, so far, only a very small percent of players have spent any money. But that could change as EASY CREDIT becomes available in the world of social media.

Apparently, one company thinks that the main barrier to people making these small purchases (examples in the BusinessWeek article ranged from 25 cents to $5.95) is the ease of making the purchase. So they're selling software to the companies behind these games that will allow players to buy now, pay later.

In the title of today's post, I said "virtual debt." I miss-spoke. The debt will be very real and has to be paid with real-world money.

Someday in the future, I can imagine a conversation between two young people:

Young A: "My mom said that, when she was growing up, you only used credit to pay for real stuff, like food and gasoline."

Young B: "Oh yeah? My great-grandmother told me that she remembers when people would only use credit to buy things like a house or pay to go to college. It was something about how you should only use credit to buy things that would increase in value. She even tried to convince me that there was a time when there weren't credit cards. I think she's getting senile."

Young A, shaking her head: "That's so sad. Anyway, why wouldn't I use credit to feed my lions and elephants on Virtually Extinct? It's not like I could let the species die!"

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