Credit cards
As many who have followed our story know, we've been dealing with excessive credit card debt for most of our marriage. I accrued most of it in late high school and early college, when, for reasons unknown to me then, I was offered amounts of credit I was certainly not qualified to receive or to manage.
When we started *culture is not optional and, later, World Fare, we entered into an uncertain financial existence that often saw us barely able to pay bills. Through all of this, credit card accounts were a constant financial and emotional drain. We were managing to pay the minimum amount due on all six accounts we had at the time, only to see our balances decrease by a few dollars every billing cycle due to exorbidant interest rates and fees. So, while we hadn't actually used a credit card in almost five years, we were still attempting to pay off this mountain of debt that never seemed to erode at all.
Some day I might write a book about all of the smarmy practices of credit card companies, but I'll just quickly note here that they have no interest in high-risk consumers paying off their loans and build their business practices around abusing these customers. While I'm completely willing to take responsibility for my debt (and it is mostly mine ... Kirstin has been very gracious in this regard), at a certain point repayment becomes punitive. For example, if I add up the payments we've made to all of our accounts over the last seven years, we've more than paid off, with fair interest, our original borrowed amount. At this point, we're simply paying off interest and fees that piled up over the years.
Anyway, a little over a year and a half ago, we reached a point where we weren't able to pay our credit card bills anymore. We simply weren't making enough money and quickly got so far behind that regular employment became a necessity. Amazingly, the perfect job landed in our laps in the form of the Student Activities Office at Calvin College.
Since taking the Calvin job, our primary financial goal has been to pay off this credit card debt. Last year, we managed to pay off nearly a third of the total and we've gotten the remainder into accounts with 5% or 0% interest--meaning we're no longer paying any more than we rightfully should. While we're excited about making progress toward debt-free living, it is pretty annoying to be spending so much money (and it really is a lot) to profit an industry that, ultimately, provides only convenience. I sincerely look forward to spending this money in ways that actually make the world a beter place.
And now we're receiving more offers than ever for credit. In fact, we received an offer today that was completely unbelievable: $1,000 to $3,000 over 2 years at 96% interest rate. Ninety-six percent. So, were we to borrow $1,000, we'd end up paying $2,279.52 over two years. I'm not sure what qualifies as predatory lending anymore ...
Comments
I heard a story on NPR (maybe Fresh Air?) on credit card companies. I could not believe the things they'd do...assess all of their millions of customers a $12 bogus fee, then reap the rewards when the hundreds of thousands who didn't catch it unknowingly paid, etc. Congratulations on making it this far! We should have a huge blowout when you're finally all paid up...maybe we could rent a yacht or something. :)
Posted by: Kristin | November 27, 2007 9:35 PM
Yeah, it's pretty despicable. I'd recommend the film "Maxed Out" if anyone wants to know more about this issue. While the film itself isn't particularly great, it does highlight a lot of unseen practices of the industry.
And thanks for the encouragement, Kristin! We'll definitely have to do something when we're finished. :)
Posted by: Rob VG-R | November 28, 2007 2:22 PM
This may or may not be what Kristin heard on NPR, but interesting anyway:
http://www.npr.org/templates/story/story.php?storyId=9156929
Posted by: Kirstin | November 29, 2007 6:31 PM
That is great progress, Rob! Thanks for sharing your experiences. I encourage you to keep chipping away at it. Debt is really a form of slavery isn't it? Sounds like a good Catapult issue topic. "The Lordship of Christ in Loans and Debt" or "Usury: A Biblical Overview"
You might consider using a debit card only. It seems a card account is necessary in our world of on-line purchasing but a debit card comes with the accountability of having the money in the bank.
Posted by: Jeff | December 1, 2007 1:50 PM
The introduction of the debit card has been very helpful with this process. I think if debit cards had been around when all this started, I wouldn't have gotten us into such a mess.
Thanks, again, for the encouragement! We should do a catapult issue about debt ...
Posted by: Rob VG-R | December 3, 2007 10:19 PM