figured out how I got into trouble

iVillage Member
Registered: 05-09-2005
figured out how I got into trouble
3
Sat, 03-04-2006 - 12:37pm
Well, I finally figured out what went wrong to get us into the ugly credit card debt we are in. Actually I think it was the availablity of the low rate balance transfer offer. I had been trying to figure out the giant expenses that got us into trouble. But really it wasn't really huge necessary things or repairs we just couldn't put off. We had one card that we called the "day to day" credit card. When the balance got too high to be paid off each month, I would transfer it to a low rate card. AND THEN CHARGE IT UP AGIAN THE NEXT MONTH. I think this is kinda the same thing folks might be tempted to do when they use a HELOC to pay off the credit cards, and then charge them up again. So be aware that there can be danger here too. My husband was actually against the transfers to the low rate cards because he said the high interest would force us to pay the credit cards off. But I transferred them anyway. I'm not sorry now, really, that I did, because the horrible debt is all at a pretty low rate. BUT we kept on using the day to day card and did not get into the habit to force ourselves to pay it all off before we used it again. Anyway, just thought I'd share the final insight I had with this. So while the low rates are a life saver, I should have not buried my head in the sand, and gotten some plan to keep our 'day to day" bills down and not rely on credit cards. This group has really helped me change my way of thinking. If we do use the "day to day" card, we pay it off each month. No more avoiding the truth. But we still have a very very long way to go before those wonderful low rate cards are paid off.
Megan
iVillage Member
Registered: 12-12-2004
Sat, 03-04-2006 - 3:12pm
Hi, Megan. Well, I've fallen into that trap also. DH is merrily sailing along, only two cc to pay off, and $19K from the refi he put into bank, new SUV, new job, new everything. Meanwhile, I had to charge some of my medical bills to the cc, so they wouldnt slap late fees, and wow, my cc is up to $5600!! I did transfer stuff to a lower interest card, but my problem is using my bank card (it's a Mastercard/Debit card) for everything. It's not "charged" but debited from my checking account. Am tempted to just leave my wallet at home, and just carry my DL for driving. Sigh. WHiz.
iVillage Member
Registered: 05-09-2005
Sat, 03-04-2006 - 3:45pm
Even when we don't carry the credit card, we somehow end up using it!!!! We are going to have to go to the cash only method before we drown. I totally understand what's going on. It is so good to transfer the $$ to a lower interest, BUT they haven't really gone away. They are just not biting at you so hard. And that's my problem. The high interest rates are a real punishment, and stupid to pay, but a real motivator!!!
Megan
iVillage Member
Registered: 03-16-1999
Sun, 03-05-2006 - 4:31am
I think cc companies are counting on exactly what happened to you.They make it SO easy to do. They don't offer us great rates because they like us... We have rolled almost everything into either 0% or a fixed 2.9% for life. Once that happens we lock up the cards so that we cannot possibly use them. Our incentive is that all or most of our payment goes to the principle and we get to watch the numbers come down. We are using a day to day card that just plain gets paid every month. We are using a quasi Ramesy system of building and maintaining an emergency fund so we don't reach for credit cards when something goes wrong. As an aside.. we are now at a place where we have a bunch of credit cards with no balances locked in the safe. We don't close the accounts when they are paid off because every book says not to. If anyone saw how many cards we have they would faint. Allowing that we have two cards for every account we still have a bunch. I have gotten addicted to the saving for emergency thing so now I am having trouble letting go of the excess savings (that I should use to snowflake/snowball). I guess it is all part of the journey.