Credit Cards are Evil Things

The Past~

I had credit cards while in college and my parents paid all of my bills - rent, utilities and my credit cards. I know, I know..why did I need them? Reason: it was 1997, credit card companies could set up tables on campus to capture bright eyed and clueless college kids into debt and I seemed to always want more.

I moved to NYC on credit. After I got my first musical tour in Oct 2001 my dad took over my cards and began to pay them all off. Nice right?

But once I got off my 2nd tour in June 2002, my parents were done. I was 25 and if I wanted to stay in New York, I was going to have to do it on my own. Back then I actually had dreams of making theatre a career and New York is where I needed to be. So, with me being the resourceful person that I am, I got the card statements, brand new cards reissued and sent to my current address in NYC...without my father's permission. Upset does not describe his reaction, lets just say my mother felt the brunt of it and then her softer and imploring voice came at me over the phone, a "how could you do this?" and "who's going to pay for this, we can't afford this!?" is what I remember.

I lived in a state of denial (not just a river in Egypt). I would take cash advances at 22% ARP- sometimes $400 a night for dancing and partying (so much for auditioning)- thinking that some how I would pay the cards back. I paid rent on my cards more then a couple of times. It got to a point where I couldn't afford to pay the minimum payment, so not only was I gaining debt for clothes, bfs, two trips- home and Austin, cell phone bill, clubbing, drinks, computer, dinners out, dentist, doctor, more clothes, bf's clothes, movies, car rentals, etc -I was also getting charged late fees ($40) and over the limit fees ($50) each month on 5 different cards.

From $0 debt to a grand total of $26,445.65 in just 13 months.

After avoiding the numerous calls from creditors, I accidentally answered my cell phone one night. It was MBNA, I owed them $11,840. They said if I closed my account and went with this debt consolidation company they could get my APR from 33% to 1% and it would stop all the calls. The next thing I knew, all my cards were closed expect my Dell card- I only owned $930 and I said to the lovely debt consolidation girl, "Oh, I could pay that off on my own, np."(wrong: try $2,796 for a computer that cost me $1100 and is now 4 years old). I now had to make a monthly payment of $592 and if I missed more then two payments I would be booted out of the program and I also had to pay them $36 a month.

I started with my debt consolidation company in July 2003. I was 26 year old working at Equinox, in accounting off all places, making 24K

The first two months were the worest. It was hard to go from not having to worry about cash flow, going to nice dinners or seeing a movie whenever I felt like it to looking into restaurant windows and wondering how anyone could afford to eat at such nice restaurant or seeing someone walking a dog and thinking how do people afford feeding a dog when you can't even afford feeding yourself

I broke down, called my mom crying, saying that I was drowning in debt and could she please take over just one of my credit cards to lower my monthly payment. She agreed but it was going to be her paying the bill..my father would have nothing to do with it. She took over the second highest card I had- 1st financial bank, amount: 8,800. This lowered my payments down to $388 per month and would allow me to at least function in NYC.

The Present~

February 21, 2007: I paid off my first credit card, Dell Financial
Stats:

• Price: $1268.58
• Paid: $ 2303.12
• Interest: $1034.54
• Time: 4 yrs 6 m

I thought it would be this big relief but it was like...ok, next card.

February 23, 2007: 2nd card, Amex
Stats:

• Debt: $4,300 (est.)
• Paid: $4,300
• Interest: none
• Time: 3 yrs 7 m

The deal with this card was that if I missed more then two payment, I would be lay able for all the interest since the start of the program. My last cc statement had about 3,900 in interest since I started the program. I was very worried that I might have missed a payment and have to pay the remaining 3K but in the end it was cleared. I think maybe this is when it started to sink in. I was seeing a light at the end of the tunnel.

March 23, 2007: 3rd card, Citibank VISA
Stats:

• Debt: $1,500 (est.)
• Paid: $2,596
• Interest: $1,096
• Time: 3 yrs 8 m

The APR went from 20% to 9% when I started, but that 9% still got 1K from me.

• April 17, 2007: MBNA MC
  Debt: $11,840
  Paid: $8991.14 (and counting)
  Remaining: $2848.86
  Est Time: Nov '07
  

Also in March I was able to take that credit card my mom was paying on. If was a very proud moment when I was able to call my mom and tell her the news. I could see her smiling all the way from Texas!

But here is why credit cards are evil- 1st Financial Bank

This card is not on the program, they do not work out deals with my consolidation company. So I'm suck paying for at least another two years. So on my first bill after my mom sent it to me this is what happen

Payment was do Apr 2. I made two payment, a $150 each. The first payment posted fine but the second payment posted Apr 3 (my birthday)..one day late. I called them to explain that I had just taken over the payment and could they please reverse the $37 late charge. He said no because the card was closed.

Then I asked him why the payment posted on Apr 3 didn't carry over to the next months bill so that I would have at least started chopping at the minimum due. He said the billing cycle didn't end until Apr 4! UUUGGHhhhh!

So because they choose this random date of Apr 2 (not Apr 4, which would actually make sense), I'm out an extra $37 AND I still own the full minimum payment for my next bill! I HATE CREDIT CARDS!

Oh, AND they are charging me $2.75 a month for having a balance on a closed account! That's $32.88 a year for nothing!

I need to go work for a credit card company, they are pros at getting the must bang for their buck! Maybe I'll sent them my blog and they will have pity on me. (most likely not, they will most likely sue me for using there name and talking trash!)

Future~

I should be out of debt by Nov 2008. I'll be 31 and still an assistant..but that's a whole other posting. Total amount paid: 29K (est.)

Lesson-

Debt consolidation works at a price. I hear there are companies that don't charge a fee (my sister told me this after 2 years into the program). Credit is not some magical source of money, you will have to pay it back with interest. Amex is he best card, hands down. Silver lining- I would have never met Lucky and fell in love (and the crowd goes..aahhh)!