You head off to college. You’re finally on your own truly feeling like an adult for the first time. As you head to the cafeteria you pass a table run by a credit card company. If you sign up today you get a free t-shirt. Hey, you’ve wanted a credit card and it’s getting close to laundry day so an extra t-shirt will come in handy. Fast forward a few years and you’re thousands in credit card debt. Lucky you!
Yeah, credit cards suck!
So you have a big balance that you built up on the card. Wasn’t too bright, you know. You want to pay it back but you’re trying to make ends meet too. You get your credit card bill and you see the minimum amount due. The low amount entices you to pay it. The extra money can go toward other things like food and rent. Fast forward a few years and rather than your purchases getting paid off your amount due grows instead. You look at the interest you’ve paid out and realize it was as much as the original items you bought!
How about this – You need a new refrigerator. You head to the appliance store and find one you like. As you are getting ready to pay, the salesperson tells you if you open up a credit card with them there will be no payments for 12 months. A year of no paying would be pretty good. So you pay the minimum for 12 months. On the 13th month you see a huge interest charge! What you didn’t know was if you didn’t pay the whole thing off after 12 months you pay interest on the balance going back a whole year! Oh, and the rate on the card is like 24%!! And you thought you got a deal on the price a year back!
Credit cards suck.
Here’s one – Yeah, you had a lot of credit card debt. But you worked your rear off to correct those mistakes and pay it off. Hours of overtime and scraping by to make sure you don’t have to pay interest payments anymore. You’ve tuned the page and you’re now a responsible credit card user. The day comes where you have paid off your entire balance. You now owe nothing. Congrats! You get a letter in the mail a few weeks later saying the credit card company is canceling your account now that your balance is paid off. Seems you’re not credit worthy now that you’re responsible.
This one’s good – You know you have a high interest rate. You screwed up a few times in the past. But you have been reliable for 6 months now with no late payments and you have been paying more than the minimum. You heard that you can call the credit card company and ask to have your rate lowered. Nervous, you call them up and explain the situation. To your surprise the CC company is more than happy to lower your rate by a few points. That wasn’t so hard! It’s not until some months later that you find out that rate change only applies to NEW purchases. The old balance is still at the higher rate. And here’s the kicker – those payments you have been making? That went to the lower rate balance while the higher rate balance sat back and accrued interest.
Have I mentioned credit cards suck?!?
Last one – You haven’t been the best with your credit card but you’ve been trying. It’s been tight with the money and you are trying to stretch every dollar out. Your credit card bill’s due date is the 2nd. You get paid on the 30th and mail out your bill the day you get paid. It doesn’t get to the CC company in times and you are charged a late fee of $35. On top of that your interest rate goes up to 22%. You call up the company and beg and plead but they won’t do anything since you haven’t had the cleanest credit record the past 6 months. That $15 CD you bought just cost you a whole lot more!
Yup, credit cards can be killer!
I’ve been in a lot of these situation myself (I remember getting my first credit card on campus and received a Koosh ball too!). Not fun times being stressed out with credit card debt.
How about you? What are your credit card horror stories? Tell me why you think credit cards suck!
Check out the other side of the argument: Credit Cards Don’t Suck, You Suck!