86: Recharged Without the Cards

86: Recharged Without the Cards

From Chicken Soup for the Soul: The Joy of Less

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Recharged Without the Cards

Credit cards are like snakes: Handle ’em long enough, and one will bite you.

~Elizabeth Warren

I was twenty when I got my first credit card. My dad said I might need it in an emergency while I stayed with my friend in Hawaii. My shiny blue Visa card remained untouched in my wallet throughout my trip; when I ran out of money, I returned home. What a concept: when you’re out of money, you stop spending!

I can’t remember the first thing I charged, but like the first puff of a cigarette, it was my line crosser. I’d entered the world of plastic and it became easier to rely on it with each new swipe. My charge card replaced old tires and covered costly veterinary bills. The minimum monthly payments seemed very reasonable to me and I worried less and less about saying, “Charge it.”

Soon my wallet expanded as I accepted an assortment of department store cards. Each store enticed me with sizable discounts on the day I opened my account. They kept me coming back with mailers promising extra discounts or rewards for my loyal purchases. The more I bought, the more I saved… or so I thought.

A major vehicle repair maxed out my Visa but that didn’t seem to be much of a problem. After all, I was receiving weekly invitations from other banks offering more Visa, MasterCard, and Discover cards. Everyone seemed eager to help me obtain whatever I might need or want without any saving, waiting or planning on my part.

Interestingly, many of my charges were not for me personally. I gave wonderful gifts, especially to my mother. Each piece of jewelry I chose for her on Christmas, Mother’s Day and her birthday cost as much as $500. My friend couldn’t afford the surgery his cat needed, so I charged it. Three of my friends died within a two-year period. At each of the funerals, the extravagant wreath with the banner “Friend” was from me. Meals out with friends and co-workers usually ended with me picking up the tab. If they resisted, I’d say, “I’ll just put it on my card.” You would have thought I had an unlimited corporate expense account instead of the reality: every cent would eventually come out of the Bank of Marsha.

Finally, my charging hit a dead end. I had thirteen well-worn cards and was making the minimum payment on each. Once the interest (18 to 22% annually) was added, the balances didn’t decrease even on cards I’d stopped using. The principal stayed the same.

At this point, my minimum payments totaled $1,270 a month — exactly half of my take-home pay as a teacher. My mortgage took the other half. I thought I’d found my escape from debtors prison when I received a twenty-thousand-dollar book royalty check and I applied almost all of it toward my seventy-thousand-dollar credit card debt. Unfortunately, I’d forgotten to set aside money for my income taxes. At the end of the year, I couldn’t pay my federal taxes. The IRS set up monthly installments at 12% interest.

This new monthly bill returned me to my credit cards, no longer maxed out, to pay for essentials like gas and food. About this time, I hit rock bottom. Standing in a grocery store line, I realized my shiny little addiction that had once bought tires, extended Buttercup’s life and made my mom’s eyes light up was now needed for eggs and milk. Like the habitual smoker who finally recognizes the source of that bad taste in his mouth, I was suddenly sick of my dependence on credit cards.

My sister Connie took me to Consumer Credit of Iowa to end the cycle. My counselor totaled my recent statements. Despite my royalty payment, I still owed over fifty thousand dollars.

“You can’t reduce your balances by making minimum payments. The thirteen hundred a month you’re paying isn’t making a dent. Are you ready to give up the cards?”

I gulped. What choice did I have? Resigned, I muttered a barely audible, “Yes.”

“Okay. You need to write to each of your creditors using our form. You will assure them that you intend to repay every penny and NOT use the card before you reach a zero balance.”

“But I can’t pay any more per month. How can I pay them off?” I protested.

“We’ll contact each of your creditors and negotiate a lowered interest rate for you. If you’re not charging and your rates have decreased, your balances will steadily be reduced.”

“How will I know if they agree to lower my rates?”

“We handle all your payments. Each month you send us one check for thirteen hundred dollars and we disperse your payments to your creditors. In effect, they’re making the agreement with us.”

Once in the program, I learned that the lenders agreed to as little as a half percent to as much as a sixteen percent reduction in their interest rates. My monthly statements from Consumer Credit showed how much each account had received and my after payment balance.

The changes weren’t dramatic until the smaller accounts began to be paid in full. When a zero balance appeared on an account, that monthly payment was applied to another account. I was finally making progress!

I continued writing to earn my bread and butter money. Obviously, my teaching money was tied up for the next five years.

After the last bill was paid off, my counselor congratulated me. He couldn’t have been as surprised as I was that I’d made it without charging as much as a pack of gum. Was I cured?

During my five years without credit cards and a limited, irregular cash flow, I developed some of the traits of people who survived the Great Depression. Forget about shopping for trendy new outfits. I now wanted to wear my clothes until they fell apart. Who was treating everyone to dinner now? It certainly wasn’t me. My gifts became more thoughtful and less expensive. One Christmas I made everyone brownies and these were received with much more enthusiasm than my usual store-bought offerings.

When I was finally free to resume using credit cards, I didn’t. For big purchases, I used my debit card and anything under $200 was strictly cash. If I didn’t have the cash, the purchase could, and did, wait.

Weekly offers for store and bankcards still fill my mailbox. Each one has an introductory offer meant to lure me in. They won’t find me signing up for a low introductory rate, discounts on merchandise or cash back rewards. I’ve already ridden on that merry-go-round and I know how hard it is to get off.

~Marsha Porter

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