Clipping the Credit Cards
It’s a bold new credit world out there and I’m learning very quickly that I don’t like it. Last week, I cancelled our Sears store card because they had raised our interest rate to over 25 percent.
I’ve had this card for nearly 3 decades, and I have to admit, cutting it up felt a little like losing an old friend, albeit an old friend with whom I shared a dysfunctional relationship.
I’ve blogged a little bit before about our relationship with money and credit. Dale came into the marriage a believer in using cash, or if we had to use a credit card, paying it off every month.
My parents used credit very liberally. They were continually caught in the cycle of getting into debt, paying their cards off with large income tax returns, proceeds from the sale of a house, or the last time, with a small lottery hit.
As the years went on for Dale and I, and our wants became bigger, so did our debt. We never got in way over our heads, but we usually carried a balance on at least one of our cards. Since we’ve moved, I’ve tried not using them, but the recession and a few household emergencies changed our plans.
The card I cancelled is managed through Citibank (who, BTW, took a huge chunk of tax payer money through bailout funds).
I’m a 3rd generation Sears card carrier in my family. My grandmother had a Sears card, as did my parents. Like my parents, we have used our Sears card for household emergencies (when the 4 year old fridge shot craps and when our 6 year old water heater bit the dust last year). The balance isn’t very high, which makes the over $10 a month, 25 percent finance charge even harder to swallow.
We’ve never missed a payment. We have an extremely high credit score and while the nice customer service manager acknowledged all of this last week, she said I could have opted out when they raised the rate, but I failed to do so.
While I take responsibility for my use of the card, they’re kidding right?
I could have opted to keep my lower rate, or because I somehow missed this important announcement in all of the junk mail we get, my rates were raised?
What kind of moron would intentionally not “opt out” of having their interest rate jump from 11 percent to 25 percent?
I calmly told the lady I would cut up my card and find a way to pay off the balance. This, I know, will also affect our credit score, as when you close a card, it lowers your credit rating.
So be it.
Part of our goals this year is to get ourselves out of most of the debt we’ve incurred and to build our emergency funds and savings back up.
We’re not alone, this recession has made people realize that we need to spend less and save more. As the pitchman for insurance on television says, “We’ve learned to do more with less.” People are fed up with debt and credit cards, as evidenced by their spending habits. The Federal Reserve reported this past November that revolving credit card spending fell to its lowest level since 1943.
So, keep raising our rates, you credit card companies, it’s just more incentive to eliminate more of the clutter from our lives.
Tell us about your credit card horror stories.