Unleashing the Debt Noose, Part 2

This is the continuation of a previous post. You can catch up on Part 1 HERE. 

Watching Amy Fisher attacking a block of ice to get to an emergency credit card in “Confessions of a Shophaholic” was downright hilarious but when the debt collector came knocking, not so funny. After my first frightening foray into debt, I became a little more conscious about using a credit card and restricted the one I had left for only important things. Then the lovely recession arrived and I lost my job twice. When you don’t have a source of income, it’s quite easy to turn to “free” credit. Eventually I maxed out the card again. The limit wasn’t that high but it was still debt. I called the bank to renegotiate terms or something and I was rewarded with multiple threats of what would happen to me if I didn’t cough up the money. Thankfully, I found another job before things got out of hand and I drew up a plan to pay off the card within a year.

However, sometime last month I signed onto my online credit card account for the first time and had a mini stroke. I discovered a finance charge of $120. I scrolled down lower and discovered the charge again. In fury, I called the bank. I hadn’t used the card in 3 months and I always paid more than the minimum due so what was this stupid $120. I was rudely informed the stupid $120 is what is known as the finance charge. I never noticed it when I had paper statements because I just looked at the amount due, multiplied it by two and paid that in without looking at anything else on the bill. In shock I realized if these guys tack on these finance charges every month, it literally means outside the limit on the card I’m going to pay the bank over $2,000 a year just for having the card. Jumping Jehoshaphat! I could take a course, pay rent for 2 months, electricity for 3 years, petrol for 10 years and a host of other things with that money and I’m giving it to the bank just for having a card. After recovering from my mini stroke, I quickly re-evaluated my debt repayment plan. I had given myself a year to pay off the card but with the new information, I knew it was out of the question. I was not going to give the bank free money. I decided to engage the same tactics from the time I maxed out 3 credit cards and shortened the repayment period to 6 months. I will discuss these tactics in a separate posting.

The minute you activate a credit card, you have effectively slipped a noose around your neck, and if you continue to make only the minimum payment every month, you will be in guaranteed perpetual debt. Once I pay off this card, it will be a great pleasure to walk into the bank, ask for the manager, tell him what I think of their terrorists disguised as Customer Service Representatives and then cut up the card in front of him.