Comments on: Our Credit Cards – The Damage (aka The Expensive Lesson Learned) http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/ Our Journey to a Debt-Free Life Sat, 20 Mar 2010 21:28:43 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: Matt http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-501883 Matt Thu, 07 Aug 2008 12:10:01 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-501883 I'm not sure that I would want to know how much I've paid in finance charges. Its a bit of a depressing number - knowing that you've spend X$ of your hard earned money just paying the interest on something that you probably couldn't afford in the first place. Just seeing the finance charges makes me frustrated with myself because that money could be going to something much more useful and beneficial like an investment fund (at least for me). I'm still amazed at your progress, congrats on breaking the 10K mark. I’m not sure that I would want to know how much I’ve paid in finance charges. Its a bit of a depressing number – knowing that you’ve spend X$ of your hard earned money just paying the interest on something that you probably couldn’t afford in the first place. Just seeing the finance charges makes me frustrated with myself because that money could be going to something much more useful and beneficial like an investment fund (at least for me).

I’m still amazed at your progress, congrats on breaking the 10K mark.

]]> By: Chris http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-500964 Chris Tue, 05 Aug 2008 21:11:28 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-500964 That is great that you were able to get all of your cards at 0%. With $72,000 in credit card debt, I can only manage to get about $28,000 of it at 0%. Last month I paid $285 in finance charges on credit cards alone. That amount will be a lot higher once the promotional periods end. I'm not about to try and figure out all of my past finance charges on my credit cards. I've done so many balance transfers in the past, that it would be impossible to figure it all out. That is great that you were able to get all of your cards at 0%. With $72,000 in credit card debt, I can only manage to get about $28,000 of it at 0%. Last month I paid $285 in finance charges on credit cards alone. That amount will be a lot higher once the promotional periods end. I’m not about to try and figure out all of my past finance charges on my credit cards. I’ve done so many balance transfers in the past, that it would be impossible to figure it all out.

]]> By: Money Funk http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-500882 Money Funk Tue, 05 Aug 2008 16:51:40 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-500882 Eegats! I know! It's dreadful, isn't it? I just paid $130 interest, for this month, on our Bank CC. On that particular card we pay $2,011 interest annually. As a whole we pay $6K on annual interests. I am glad I finally woke up!!! Eegats! I know! It’s dreadful, isn’t it? I just paid $130 interest, for this month, on our Bank CC. On that particular card we pay $2,011 interest annually. As a whole we pay $6K on annual interests. I am glad I finally woke up!!!

]]> By: fathersez http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-500647 fathersez Tue, 05 Aug 2008 08:15:51 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-500647 Wow! $10,000 is a respectable sum of money. Whilst playing with numbers, if you were to compound this amount....you may be well surprised by the opportunity lost. So we lose both ways. Paying interest at rates Shylock would approve and losing out on opportunities. It is good that you are putting your lessons learnt in number form like this. It hits harder and truer than just words. Regards Wow! $10,000 is a respectable sum of money. Whilst playing with numbers, if you were to compound this amount….you may be well surprised by the opportunity lost.

So we lose both ways. Paying interest at rates Shylock would approve and losing out on opportunities.

It is good that you are putting your lessons learnt in number form like this. It hits harder and truer than just words.

Regards

]]> By: Sarah http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-500500 Sarah Tue, 05 Aug 2008 01:58:29 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-500500 Hi Tricia, That's a really high number, but since you and your family have made so much progress (and will continue to) against the debt, I don't think there's any need to "cry over spilled milk." Not that you were crying about it. :) Keep focused on the positive present and future as you have been. Hi Tricia,
That’s a really high number, but since you and your family have made so much progress (and will continue to) against the debt, I don’t think there’s any need to “cry over spilled milk.” Not that you were crying about it. :) Keep focused on the positive present and future as you have been.

]]> By: Family Man http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-500388 Family Man Mon, 04 Aug 2008 20:53:03 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-500388 I know my interest will be at least twice that if not more. I hope that we can achive some freedom within 24 months. I do ride the zero percent where I can, but we shall see. I know my interest will be at least twice that if not more. I hope that we can achive some freedom within 24 months. I do ride the zero percent where I can, but we shall see.

]]> By: Kev http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-500374 Kev Mon, 04 Aug 2008 19:51:26 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-500374 I'm also in the in the zero percent interest zone and will remain there until next July. I'm currently on track to pay off my remaining credit cards by this December (Can I get an Amen?!?!). Here is my dilemma though... Knowing that I'm riding the zero percent interest train until next July, It would make more sense for me to just pay the minimums on those cards and roll all the extra money I've been paying into a high yield savings account or CD. I'm having a hard time doing that though b/c I want to pay them off SO BAD! Decisions Decisions... I’m also in the in the zero percent interest zone and will remain there until next July. I’m currently on track to pay off my remaining credit cards by this December (Can I get an Amen?!?!).

Here is my dilemma though… Knowing that I’m riding the zero percent interest train until next July, It would make more sense for me to just pay the minimums on those cards and roll all the extra money I’ve been paying into a high yield savings account or CD. I’m having a hard time doing that though b/c I want to pay them off SO BAD! Decisions Decisions…

]]> By: tvo http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-500373 tvo Mon, 04 Aug 2008 19:51:13 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-500373 i wish i was reading blogs like this three years ago i wish i was reading blogs like this three years ago

]]> By: Tricia http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-500264 Tricia Mon, 04 Aug 2008 14:34:00 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-500264 Jim - we don't get hit with finance charges that would have happened once the 0% is over (thank goodness). Whatever balance is there will just be subject to their interest rate from a going forward standpoint. Jim – we don’t get hit with finance charges that would have happened once the 0% is over (thank goodness). Whatever balance is there will just be subject to their interest rate from a going forward standpoint.

]]> By: Jim ~ mydebtblog.com http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-500263 Jim ~ mydebtblog.com Mon, 04 Aug 2008 14:28:33 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-500263 When your 0% goes away and it goes back to normal, will you get hit with a bunch of finance charges that would have happened over the 0% period? The reason I ask this is I have had 0% offers before, and typically if you pay them off before the deal is done, you don't pay any finance charges. I don't have the time to go back through every credit card statement to figure out how much money I gave them. When your 0% goes away and it goes back to normal, will you get hit with a bunch of finance charges that would have happened over the 0% period? The reason I ask this is I have had 0% offers before, and typically if you pay them off before the deal is done, you don’t pay any finance charges. I don’t have the time to go back through every credit card statement to figure out how much money I gave them.

]]> By: CanadianKate http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-500257 CanadianKate Mon, 04 Aug 2008 14:07:50 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-500257 Tricia, it is good to see that after the last month or more of unexpected expenses, your credit card debt hasn't increased. So you really do have a handle on using your credit cards. As for using the credit card to buy only needs vs. wants, here's some incentive. I just finished my first year on the Compact (not buying anything new). This was done for environmental reasons, not to save money (not an issue with me.) I track my spending in Quicken so was able to get a rough idea of the savings though. In the category of misc. I spent 1/6 as much while on the Compact than the year before. On clothing for me, I spent 1/5th as much. The numbers quite shocked me because I thought I had an excellent sense of want vs need. I also thought I was frugal (actually, I am, so that means I bought lots and lots of junk on sale!) The actual numbers were HUGE and will pay outright for a solar hot water system and a portion of the metal roof (which goes on over my existing shingles so no addition to landfill.) So my environmental savings by not buying unnecessary junk is going towards an investment in my house, and reducing landfill and electricity used. Interestingly, our gasoline expense went down by $200 despite the increase in the price of gas. The difference is that I'm not buying things, therefore I'm not going to the stores. It is only a 30km round trip for me, but it obviously adds up. There are times when the car goes out only once a week (we work from home) because we get milk and bread on our daily walk to the general store. Tricia, it is good to see that after the last month or more of unexpected expenses, your credit card debt hasn’t increased. So you really do have a handle on using your credit cards.

As for using the credit card to buy only needs vs. wants, here’s some incentive. I just finished my first year on the Compact (not buying anything new). This was done for environmental reasons, not to save money (not an issue with me.) I track my spending in Quicken so was able to get a rough idea of the savings though. In the category of misc. I spent 1/6 as much while on the Compact than the year before. On clothing for me, I spent 1/5th as much.

The numbers quite shocked me because I thought I had an excellent sense of want vs need. I also thought I was frugal (actually, I am, so that means I bought lots and lots of junk on sale!) The actual numbers were HUGE and will pay outright for a solar hot water system and a portion of the metal roof (which goes on over my existing shingles so no addition to landfill.) So my environmental savings by not buying unnecessary junk is going towards an investment in my house, and reducing landfill and electricity used.

Interestingly, our gasoline expense went down by $200 despite the increase in the price of gas. The difference is that I’m not buying things, therefore I’m not going to the stores. It is only a 30km round trip for me, but it obviously adds up. There are times when the car goes out only once a week (we work from home) because we get milk and bread on our daily walk to the general store.

]]> By: Tricia http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-499895 Tricia Sun, 03 Aug 2008 17:32:28 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-499895 Enough Wealth - that would indeed be something interesting to do. With just browsing through our statements, I can see some charges were not as bad as others. But, knowing what I know now, and how much we need as bare minimum income, we didn't have to go into credit card debt. Even with making $20K/year, we could have made it (this was before our son). It's just that we insisted on eating out a lot and buying lots of things we didn't need. Then there are the emergencies (car breaking down, etc.). We should have been stashing money away to cover those. Enough Wealth – that would indeed be something interesting to do. With just browsing through our statements, I can see some charges were not as bad as others. But, knowing what I know now, and how much we need as bare minimum income, we didn’t have to go into credit card debt. Even with making $20K/year, we could have made it (this was before our son).

It’s just that we insisted on eating out a lot and buying lots of things we didn’t need. Then there are the emergencies (car breaking down, etc.). We should have been stashing money away to cover those.

]]> By: Eden http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-499879 Eden Sun, 03 Aug 2008 16:00:06 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-499879 Painful, isn't it? I haven't done the calculations yet, but I have no reason to believe I have paid anything less than 5 figures in finance charges as well. I suppose I'll work on that project after I have finished paying off my remaining credit cards. Painful, isn’t it? I haven’t done the calculations yet, but I have no reason to believe I have paid anything less than 5 figures in finance charges as well. I suppose I’ll work on that project after I have finished paying off my remaining credit cards.

]]> By: Twiggers http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-499867 Twiggers Sun, 03 Aug 2008 14:23:41 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-499867 I feel your pain Tricia! I am sure that in 8 years of using credit cards my numbers might be close!!! Shoot, one card I was paying over $100 in interest every month...and that was only about 1/6 of our total debt! I feel your pain Tricia! I am sure that in 8 years of using credit cards my numbers might be close!!! Shoot, one card I was paying over $100 in interest every month…and that was only about 1/6 of our total debt!

]]> By: John http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-499862 John Sun, 03 Aug 2008 13:52:14 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-499862 You definitely did the right thing to get the interest down to 0%, because all those charges add up, but now that you mention that offer is almost up, how about getting a new credit card with 0% on purchases and use that for all your monthly expenses. Use the difference between the minimum payment and new charges on that credit card to pay off the old debt where interest rates will be going up and that way you will extend 0% interest for a while longer. You definitely did the right thing to get the interest down to 0%, because all those charges add up, but now that you mention that offer is almost up, how about getting a new credit card with 0% on purchases and use that for all your monthly expenses. Use the difference between the minimum payment and new charges on that credit card to pay off the old debt where interest rates will be going up and that way you will extend 0% interest for a while longer.

]]> By: Enough Wealth http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-499857 Enough Wealth Sun, 03 Aug 2008 13:20:23 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-499857 Now that you know how much you paid in interest to buy things on credit, you should take the next step and list the things that were bought, and a) split them into needs and wants b) estimate how much those things are worth today While it's not nice to have paid interest to pay for a "need" using credit (eg. a car repair bill so you could keep using the car to get to work), it's much, much worse to realise that you paid lots of interest in order to buy some electronic knick-knack on credit, only to never use it very much and it to depreciate to worthlessness after a couple of years. To stop using credit to buy things you can't afford is just the first step. To stop buying you don't really need is the next step... Now that you know how much you paid in interest to buy things on credit, you should take the next step and list the things that were bought, and
a) split them into needs and wants
b) estimate how much those things are worth today

While it’s not nice to have paid interest to pay for a “need” using credit (eg. a car repair bill so you could keep using the car to get to work), it’s much, much worse to realise that you paid lots of interest in order to buy some electronic knick-knack on credit, only to never use it very much and it to depreciate to worthlessness after a couple of years.

To stop using credit to buy things you can’t afford is just the first step. To stop buying you don’t really need is the next step…

]]> By: Ryan S.@uncommon-cents.net http://www.bloggingawaydebt.com/2008/08/our-credit-cards-the-damage-aka-the-expensive-lesson-learned/comment-page-1/#comment-499772 Ryan S.@uncommon-cents.net Sun, 03 Aug 2008 05:31:20 +0000 http://www.bloggingawaydebt.com/?p=1466#comment-499772 Wow! That's a lot of finance charges. I think I don't want to find out how much in terms of interest I've paid in my past life after that... Wow!

That’s a lot of finance charges. I think I don’t want to find out how much in terms of interest I’ve paid in my past life after that…

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