Wednesday, January 30, 2008

Dolly Iris and Credit Cards

Let me tell you something people...... credit cards can either work for you or against you. I personally believe that everyone should do their research and understand how credit cards work and what a big responsibility they are before getting one. Especially 19 yr old babies......

I learned this lesson the hard way. My sister told me how easy it was to get a credit card by applying online and even helped me do it on her computer. Two weeks later mine arrived in the mail. It was red and shiny and it had a $500 limit. I believe I was 19 at the time and thought it was such an accomplishment to have my first Visa.

At first I was great with it. I had a great paying job and limit was appropriate for my usage. I would purchase everything on my credit card and every payday I would just pay it off. I really had no idea how credit worked or how to take care of it but luckily I was doing just great. My credit card and I were like two peas in a pod.

Then I fell for a boy who was no good for me in many ways. I left my job and followed him to Alberta. We couldn't pay for thing when we first got there and he convinced me that if we could only put things on my card for a little bit he would find a job and pay me back right away. The blind fool that I was called the Visa company and asked if they could up my limit. They said "no problem" and offered me an additional $4500.

Wow! I thought this was incredible and I felt very proud of myself (eyes rolling now) but something in me was telling me to be cautious. So I agreed to up my limit by $2000 making it a total limit of $2500. I told the boy it was all they would offer.

Long story short Boy was a jerk and left me the majority of the debt I had. I'm taking took me for every penny and then some. I do still have some promisary notes from him but whats the use? The guys a bum and I would never see a dime.

For years I paid the minimum and just above because its all I could afford and I didnt understand why it wasn't even making a dent in my balance. It seemed like all my payments were eaten up. I was always borrowing from Peter to pay Paul and it was a very stressful way to live. Everywhere I went ... debt followed.

Finally one year I moved multiple times in a short time frame and had a lot of stress happening in my life.... yes even more stress. A lot of things slipped my mind. One day I went to the bank machine to discover all my money was gone... including money I had put in for my student loans. I ran into the bank scared and asked what was happening. All they could tell me was that somebody in the Yukon had drained all my accounts... or what little was in them. They couldnt tell me anymore until they did an investigation.

Well it didnt take long to find out my Visa company which was also my personal bank had claimed every red cent to my name. I cried and they gave me some of the NSF charges back from my student loan bouncing and helped me put through a payment to them without it being snatched up.

The collection company was horrific. The things that man said to me were horrible and quite inappropriate. I had been in collections before due to the famous boy and knew that this was unacceptable. I was so upset because I didnt want my credit to be hurt anymore than it already was so I tried to get a loan to get myself out of collections before it hit my credit report.

In the end I did get a loan..... at a whopping 36%. I nearly cried. I got three jobs and slept approximately 4 hours a day. I ended up with a 90 day late payment mark on my credit report and was no better off than before.

One day last I did the math and realized I was paying approximately $10 a day in interest for all my loans. I nearly fell over. That meant that everyday I woke up on this planet I was shelling out $10 a day to nothing... just throwing it away. This was a real wake up call.

I got serious about debt. My new super fabulous boyfriend was very supportive and knew I had a big load on my shoulders. I opened up completely about my debt and showed him all my paperwork. He helped me by setting up Excel spreed sheets for my debts. I loved being able to plug extra payment numbers in here and there and watch the way it shed away the months and years of debt doom. This was the big realization for me.

Last year I managed to pay off that ridiculous loan and hopefully built some good credit doing so. This year I plan to become debt free by paying off my student loans. One should be paid off next week. *does happy dance

Now I have no credit cards and I'm fine with it. After all my debt is paid off I will apply for another one to start building credit again. I'm pretty sure my credit has been improving but even if I get a secured credit card I'm okay with that. This time I'm fully educated about credit cards lol. Hey, you have to laugh about these things... cant cry forever about it.

The moral of the story is if you don't have the money to pay off your credit card don't use it. The other moral is bad boys equals no good ANYTHING.

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