The conversation then turned to credit cards. The CC companies are not much better in terms of screwing people over. Someone on my friends list had a shocking experience with a CC company who actually punished him for paying down his debt by raising his rate.
And so here is Papabear's words of advice for today. PAY OFF YOUR CC DEBT ASAP!!! I have had a cc since college. I have only carried a balance a couple of times, and that was mainly due to problems getting my check in the mail on time. I have rarely made a purchase when I didn't have the money already in paw. The notable exceptions would be my vehicle and my house. I could pay off a significant chunk of the house, but that would leave me house rich and cash poor, a potentially dangerous situation if the housing market takes a downturn. A mortgage is also what is called "good debt." We all pretty much have to pay rent in some form. At least one gets to keep or recover some of that money when the house is sold. But I digress.
If you have an outstanding balance on your cc, go back about a year and add up the columns that say "finance charges." See how much money you have given the cc companies over the year. Now visualize a pile of $1 bills on the table in the amount you have paid. Now visualize dousing the bills in lighter fluid and lighting it. That's exactly what you have done in reality. Think about how many hours you have worked to earn that amount. You have essentially been a slave to the cc company. You worked for that money and you gained absolutely nothing.
Why am I writing this? Hadn't I said this at least once before? Yeah, probably. The one thing my co-worked said was that they don't teach basic financial responsibility in schools. He's absolutely right! And it's almost as if the major financial institutions don't want people to know. Ignorance means profits for them! I just want to encourage all of you that have a balance to get rid of it as fast as you can! I realize that it might be easier said than done if you are living paycheck to paycheck, but once you get that albatross from around your neck, you will be able to keep your head above water much more easily. Trust me, you don't have to run out and buy a Wii simply because everyone on your FL has one and writes "OMG! It's so fun!" You can buy one next year. You don't have to buy the latest dvd even if it is your favorite movie. It will still be available when your balance is 0. All this takes is patience and discipline. Forgo a bit of fun now for great rewards later. Keep your money for yourself!