Every time I try to get out…

5/5/07 10:28I opened a credit card account the other week. A secured account through Bank of America. I had to just suck it up and take some responsibility about my finances. I get the calls and the letters from debtors. I pay what I can, when I can and even when I request all correspondence in writing, they still call. I know the credit and collections game, I’ve worked both sides of it in my time. I know they’re just doing their job, and perhaps in a moment of anger I have told one that “I’m doing my best here, do you think you’re really going to make me feel guilty when all you are is someone that gets paid a crap amount to leave messages all day?” But when it all comes down to it, it’s my fault.

Whenever I get asked what I’d do if I had a time machine, the very first thing I think of is going back and unplugging the extension cord of that sweaty, overweight white guy that stood out (and stood out) on the campus of FAMU with a table, a small photocopier and free soda cozies. He was calling out “Get a Student Master Card, just need a copy of your class schedule!” I laugh at the fact that I was willing to sign over my info for a soda cozy, but I had just as much knowledge of credit cards as most anyone else my age did back then. We knew that our parents had them, occasionally they gave them to us for dates or the needed school purchase, but for the most part they were magical cards that got you stuff and I never understood where the money came from to pay for it. I was a student, I had no income aside from monthly allowance and I was getting a credit card… what the hell was I thinking? Oh yeah, free soda cozy.

I feel a bit ashamed that with the income I have now that I’m still paying off past mistakes, but I also have to look to the future. I know I’m not alone regarding debt, I’ve seen the statistics. But even with those statistics, the cards are still stacked against those of us in debt and/or working our way out of it. Mr. Housing Bubble I love DC, eventually I will want to make it my home, which means buying a place of my own and getting out of this renting craziness. I’ve had a lot of luck renting, even with roommates, but I think I’m ready to get out of the game and have a place of my own that, if I got a wild hair to do so, I could paint Pink Panther Pink and no one would go nuts aside from the obvious reasons. And anyone that’s aware of the market in DC knows that now is always the best time to buy, regardless of the bubble hopes.

When I left my last company, I never rolled over my 401(k) money, so it’s been sitting (and increasing) there and it’s not a staggeringly huge amount, but it would be enough to pay off my debt completely, even after the withdrawal penalties. It seems like an easy choice, but it’s a pretty hard decision to just go through with it even though I know I can put the remaining funds back into a retirement account of my own. I guess part of that is that retirement seems such a foreign concept to me. There have been many times in my life I never thought I’d live to see certain milestone ages. 30 seemed unlikely, 40 was highly improbable and I’d never be as old as my parents. Clean livin’, good genes, the passage of time and mostly just plain stubbornness have all proven me liars on that front.

I welcome any good advice from friends and readers. This is one bit of stress I’d like to have off my back. I have enough elsewhere as it is.

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6 Responses

  1. I hear you on the debt–working on my own for so many years sure took its toll eating away into my savings, though thankfully, I think the last of the credit card debt will be gone by year’s end.

    There’s no really good advice here–it’s all just toil and sweat. Pay it down, don’t accumulate more.

    As for the DC housing market, despite all the hype, it’s been over-heated for years now. I knew that five years ago when the row house next to mine on Capitol Hill sold, and my partner and I calculated that our new neighbor, who’s house was identical to ours save the fact we had central A/C, was paying a thousand dollars more each month on her mortgage than we were for our rent. That used to be the obvious sign not to buy, but people kept driving the prices up anyway. Prices in DC have already begun to drop, and I suspect once the national housing market collapses and the administration changes, prices will go down even further.

  2. Chris says:

    Do it do it do it do it!!! When I moved from the us to the UK, I owed about US$25,000 on credit cards. I had lots of them over the years. I managed to get it down to about US$20,000, and then took out a personal loan of GBP 14,000 and paid the whole thing off. Then I paid off the personal loan, and started to save.

    Now, granted, we haven’t bought yet. However, when I was laid off from my previous job, I had no difficulty at all living at the same standard for a year and a half (including HWMBO’s salary, of course). Being out of debt increases your choices fantastically.

    So pay off your credit card debt, cut the credit cards up (except for one or two for emergencies). When you use those cards, pay them off each month and don’t keep a balance. The banks will hate you (they call people who pay off their balances “deadbeats” as the banks make no money off them).

    Good luck!

  3. Fredo says:

    It always seems to start in college, doesn’t it? That’s how I got sucked in. I got a Citibank Visa with a $600, which I promptly maxed out a year later after I dropped out of school and before I got a job. It’s been a mostly-down roller coaster ride ever since.

    I also applied for a secured credit card recently and was approved with a $300 limit. This will be my emergency card; it’s nice to have that as an option.

    I’m still paying down my debts. Between garnishments (argh!) and settlements, it’s getting done, albeit slowly. After my recent foray into getting rejected for apartments, I decided I needed to fix my credit before I could start looking again.

    • Chris says:

      It could have started in college, but my parents were always very much against credit card debt. It was only after I left the seminary and got a job that my bank offered me a credit card. I think I could have gotten one at university, but I resisted. It is very seductive.

      Here in the UK the credit card spiral is pretty well established, as students often get an “overdraft” (permission by the bank to be overdrawn for perhaps £100 or £250). This then escalates after they leave school and start to pay back their student loans. They feel they’ll never be out of debt. Credit cards offer a good way of spending now to overcome their overdraft, and they usually take it eagerly.

  4. Having lost more than my fair share of sleep over the years wondering whether I was going to have enough money to eat, I heartily agree with the guys above.

    I was in such a fix that I had to borrow against my life insurance to get out of debt. Not the proudest day of my life, but I now sleep through the night and am even saving money and contributing toward a voluntary retirement program in addition to what gets deducted from my paycheck (since I’m a state employee, I’m in the teacher’s retirement system, which isn’t an account one can draw from.)

    Here’s my advice, tho: pay everything off. Don’t just pay down one credit card so that you can “manage” the other — do it all, consolidate it into one payment that’s low enough so you don’t notice it and get on with your life and start sleeping again.

    For the record: it wasn’t college for me, it was grad school. And Chris — the other Chris — is right: the way they prey on new graduates and college students is criminal. Absolutely criminal…

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