Wednesday, January 11, 2012

Cut Up Your Credit Cards

A long, long time ago, I was a naive 19 year old college student who wanted to go on vacation but had no money for said vacation. So I got a credit card. It was free money, right? Pay over time, right?

That "free" vacation wound up costing me my dignity.

//getting onto soapbox

Because I had to pay it back - plus 18%. I don't remember how much that vacation was, but let's just say $500. I paid an additional $90 for that vacation over the course of a year. More if it took longer to pay off.
Over the years, my credit was increased. And I got an additional Department Store card for "emergencies." But then Department Store upgraded me (to commercial card) and I could then use the card at more locations than just Department Store.
Then we got married and had a baby. Baby things counted as emergencies, right? And the credit card was convenient.
Then the company my husband worked for went bottom up with 2 days notice. He started his own company. We used the credit cards to survive for a few months.

Over the past 12 years, I have gotten completely out of debt once six years ago - about $5,000.
Only to rack it back up again within two years' time.

We have not spent money on those cards in over THREE YEARS. But we are still paying. We have a very nice payment plan set up for the stupid 19 year old me card, that was a primary mode of survival 4 years ago when the company Marshall worked for failed. That is very manageable and everything is going to the principle. That company has worked very hard to work with us, and I am so grateful.

But our other card - the emergency one that then went commercial - did not work with us.

So, I will be completely honest, I stopped paying it. We had Mac's legal bills, household bills, and no money. And all the credit cards were maxed out. So I stopped paying when they wouldn't lower payments or accept a principle-only payment plan.
They got nasty, I got nasty.
Finally, they had a lawyer threaten me. They probably would have spent twice what I owed suing me. And didn't they realize I didn't have the money in the first place? If I didn't have it, I didn't have it.

But suddenly we came into an amount of money that would cover the bill.

I called the attorney in charge of my case, who had send the letter demanding the full payment. I cried - I mean cried - paying that debt.

I called Marshall when it was done and sobbed to him. He asked why I was crying and I said it was because I felt so stupid for falling into the credit card trap in the first place. I felt stupid for not paying anything on it (he reassured me we had nothing to pay and had tried to work something out with them).

And when I hung up the phone I literally went prostate and cried my eyes out. I cried from sadness over parting with the money that could have been used on more useful things for us. I cried from the exhaustion that dealing with a debt causes.
And I cried from relief that finally I could be done with this nasty blemish in my life.

Then, in the midst of my tears, I began praising God. "Thank you, thank you, thank you," I called out. God, through the hand of generosity, had lifted my burden. We still have a roof over our heads, we still have food to eat. We are still going to Disney (why did we not pay this off first? We should have. I admit that.). I walked around the house for 15 minutes with my hands in the air whispering "Thank you," to the Lord.
So grateful!

With credit cards, you pay so much more than the money you initially "borrow." So much more. We paid about 1.5 times that amount (so $500 becomes $750+), and some people wind up paying twice as much! You pay in your emotional well being. You pay in your relationship with your spouse and children. Having debt hang over you eats away at you.

People, cut up your credit cards and pay them off! We are now credit card debt free aside from one card we have an easy payment plan (all going toward the principle) for. I feel such a weight off my shoulders. I don't feel like I have to watch my back anymore.

Credit cards are evil. Pure and simple. And if you can't live off your own income - reduce what you are spending and get rid of the cards!

//off soapbox

For more info about going debt free, we recommend doing Dave Ramsey's Financial Peace University Class. It is rough, but well worth it and we are on our way to financial peace and a better life for us and our kids. Our first steps were/are paying off the cards and eliminating excess spending like satellite/cable and the home phone.


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