Credit Card Horrors

Credit card horror stories

I got my very first credit card in my 2nd year at a local university. I told myself “Hey, this is great I’m finally becoming a full-fledged responsible adult”
The credit card was issued to me through a company along a Dean's List enrollment plan. So I said to myself
“Hmmmm.... it sounded good to me so I added my signature to that little form, dropped the postage paid envelope in the mail and a couple of weeks later had a shiny new piece of plastic in my hands”. Now my limit was low (max $500), so I thought it couldn’t hurt to use this a few times? As i convinced myself that I will never fall into one of the horror stories told so often by my financial ad visors at AIA, moreover I did a financial planning module before and was working a full time job while studying.

Well, here I am a number of years later. Now married to a beautiful wife, mother of 2 great kids, good job, friendly in laws, an almost perfect family. What was not prefect is that I have acquired 8 different credit cards since that first one with such a nice low limit. The ones I have now have limits that are higher than what I paid for my BMW. My wife thinks that I have full control over our finances and that we have good saving amount in our joint account. But the thing is, I do not dare tell her that even with all our savings was not enough to pay the monthly recurring interest that I’m incurring from all those damn cards. How did I end up like that? Why are the horror stories coming true? Some more right in front of me?

Well, the problem started when I use one card and then another. I was always too ill-disciplined to pay off all the principal owned to the respective card companies. Bills would be rolling in and I would pay the minimum payment at least, but rarely had extra to pay off the principal sum owned. Then it got to where it was hard to make the minimum payment and paying the other bills on time. I would pay the telephone and PUB bills with one credit card and use another to pay for groceries. Then I would constantly look out for discounts in the newspaper to buy the necessaries for my family etc Diapers for my baby boy, I would cut coupons when my family wanted to eat at Mac Donales, bargain furiously with the fruit store uncle, because I was trying to scrap up enough money to pay the credit card payment’s.

It got to a point where I couldn’t even buy my kids a 50 cents ice cream cone when they pleaded for it. I felt useless, horrible and depressed. It came to a point when the interest payments were taking everything I had to buy even a decent meal. I am finding that late fees and over the limit fees are really adding up. I can't keep up with any of my regular bills because I have maxed out all of the credit cards I have. I can't get a lower interest rate with any of the companies anymore because I have been late within the last six months on my minimum payments. Letters upon letters would arrive at my mail boxes, reminders from banks didn’t make the any situation better. I finally had to confessed to my wife and declared bankruptcy immediately. As of today, I am proud to say im still a bankrupt, but one that has cleared almost 70% of the debts.

The moral of this story is simple. Credit cards are a great thing to have only if you are truly disciplined in paying off ALL, yes ALL! Your credit debts. The interest rates charged are horrible! @(#*(@#&). It’s all in the mindset, being young and arrogant; I thought I couldn’t fall into the typical situation, but what was really lacking in me was financial Prudence, and the ability to not only read what I’ve learn, but to apply it in real life.

Cheers
The Determined fighter
Mr Lim.

Thought this story is somewhat one sided, there are also good points in using credits, the rich uses these cards to get discounts when dinning, get air mileages when flying, discounts on petrol, privileges during certain events or attending concerts and many other attractive perks. But like what Mr Lim have mentioned, be discipline and pay off ALL your credit debts on time and on Target. =D

Evaluation by an expert:
Hi Akat~
Very interesting story i must say. My take is unfortunately, our emotions usually depicts our spending habits. Out of the 5Cs , the 2Cs give people a false sense of 'power' and 'invincibility' manifested our spending power, which highlights our status or 'better' our lifestyle. Whether consciously or not, many too, turn to shopping to make themselves feel better whenever Life's stresses knocks on their doors. For some, they become overly-dependent on them.

My take is that people who find it difficult to manage money, it is not so much as the inability to do simple caculations it has more to do with managing their emotions.