Confessions of a Credit Card Junkie
I did it. I cut up my credit cards today.
Kind of.
I cut four credit cards today. I kept one - the one with the lowest interest rate - just in case. In case of what, I don’t know.
As I put that card back into my wallet, it hit me - I am a credit card addict.
In a previous post I mentioned that I accepted an offer to consolidate all of my outstanding credit card debt at 5.99%. Yesterday, all of the payoffs came through on my existing cards. Today, I got a shiny new credit card in the mail - it gave me access to the $25,000 credit line that came with my consolidation loan. I proceeded to cut it up immediately (the rate on purchases is 11.99%, 4% higher than my existing Chase card).
It is such a relief to see all of that high-interest rate debt wiped out. Never mind the fact that it’s just been refinanced. I can’t wait until the day that it’s legitimate, and I’ve paid off all $17,000+ of that revolving debt in full.
Which brings me back to that one remaining credit card. I don’t know why I think I need to keep it. I have $1600 plus change in my wedding fund - I could tap into that in case of an emergency. I have proven to myself that I can’t be trusted with plastic buying power. Why keep what is clearly one of my great weaknesses available?
Here is the story I am telling myself: I am keeping the card in case something catastrophic happens to me or a loved one and I need to have immediate access to $4000. But to be completely honest, there is an underlying subtext that I don’t want to own up to (but for the sake of my reader - not a typo - I will).
The truth is that I’m afraid that I will regret of not having that credit available more than I fear the bottomless pit that is unsecured debt. I don’t believe that the $326 in my bank account will be enough to get me to the next payday. What if I find the perfect Christmas gift for my mom tomorrow and it just happens to be $150? Will I have enough money for gas and groceries next week? What if I am admitted to the hospital for some reason (I have already tapped out my health flex account this year)? Logically, I know that these are just excuses and I need to pull the trigger (or snip the scissors, as the case may be) and cut up that card, but I can’t bring myself to do it.
My name is Heidi and I have a problem with easy credit.
I posted my 2008 financial resolutions last week, but I’ll add one more to that list: I will cut up that credit card by January 31. By then the holidays will be over and I should have an additional $1200 in my savings account (thanks to some teaching income). By then I should be able to say “no more excuses” and mean it.
Stumble it!
December 5th, 2007 at 8:06 pm
There are at least two of us.
You write at least as well and probably better than even JD and Trent, so keep it up. Your readership will increase exponentially as more and more people are introduced to the site.
As for the credit card, if you can’t be trusted with it, then cut it up.
However, even JD of getrichslowly had a similar addiction and got a credit card again for many of the same reasons you mention here, though he did go for a long period without one. Perhaps there is a “healing phase” one has to go through.
December 6th, 2007 at 9:56 am
yeah, there’s at least a few of us out here! i love your entries so far
i also have a bit of a plastic problem although the main issue i’m dealing with these days is $30K in student loan debt from grad school. have you thought about freezing the card in a block of ice or one of those other crazy schemes that would mean it would have to be a true emergency in order for you to use it?
December 6th, 2007 at 10:09 am
I have thought about literally putting that card on ice. That way I would have it if something catastrophic does happen - but I’m afraid that one week later I’ll find myself breaking it out for non-emergencies. For example: because I’ve had a hard week and, darn it, I deserve a nice dinner out (a typical inner monologue).
As Red mentioned, maybe there is a healing phase that I need to go through before I can be trusted.
@Amanda - my second largest problem is my $60,000+ in student loan debt (undergrad and grad school combined). I feel ya.
December 6th, 2007 at 12:25 pm
Hey Heidi. Found your site and wanted to say, go Speed Racer, go! Not only are you helping a lot of people, but by being so open and confessional, you are helping yourself ensure that you stick with the program.
As for me, I’ve taken to robbing banks. From my limited understanding of the Legal Code, that endeavor sort of falls into a legal gray area. The pay is horrible but the hours are terrific.
December 7th, 2007 at 8:37 am
Heidi–Love your blog! Congratulations on your new-found financial discipline and resolve. On your emergency/wedding fund…would it be possible to have the wedding you want (considering the vendor deposits you’ve already paid) but postpone the Ireland trip until you have the money? It seems a trip like that would be a great reward to yourselves for clawing your way out of cc debt. And you could do a smaller, driving-distance getaway in the days right after the wedding just to spend some relaxing time together. Many people think they “need” a big honeymoon because everyone’s doing it, but it’s just not necessary.
Just my $.02. As a natural saver, I wouldn’t be able to enjoy such a trip knowing I could have used the money to pay down debt, but (like JD says) you have to do whatever works for you. I look forward to following your journey!
December 7th, 2007 at 8:46 am
@AC - I have been giving the honeymoon a lot of thought. I have traveled pretty extensively (been skiing in Whistler, BC; done the all-inclusive carribean thing; spent a couple of weeks in Hong Kong, etc), and wouldn’t mind waiting on the trip. However, my fiance and I have never taken a real vacation together - and we’ve been dating for nearly five years.
My beloved isn’t much of a saver or a planner. I have a sinking feeling that if we (I) don’t make the honeymoon a priority - we may never take that big trip.
My biggest challenge in this whole process is going to be getting my partner on board. I’m hoping that he’ll learn by example and that our meeting after the first of the year will be a turning point for him.
And you’re asolutely right - a trip to Ireland would be just the thing to celelbrate being credit card debt free.
December 9th, 2007 at 4:12 pm
[…] from BankerGirl presents Confessions of a Credit Card Junkie, and says, “Working on eliminating unsecured debt from my life. This article is about a step […]
December 10th, 2007 at 8:48 am
[…] be what you are looking for. Whether it is the above, or whether you want to find out if you are a credit card junkie or learn how to manage your cash when traveling or just looking to increase your income, then the […]
December 11th, 2007 at 9:28 pm
You can do this! I also had a hard time getting rid of my cards. I couldn’t get rid of the last one, so I did actually freeze it. And it really helped. I know it sounds stupid, but since that card has been in my freezer, I have not been tempted to use it once.
Great post!
December 12th, 2007 at 1:19 pm
[…] Confessions of a Credit Card Junkie at Banker Girl […]
December 12th, 2007 at 7:18 pm
Hi, new reader here!
I totally feel your pain.
December 12th, 2007 at 8:35 pm
Wow. Thanks for the inspiration! I did cut up 3 credit cards about 2.5 months ago and doubled up on payments. I left my Gap card open and promptly ran up $350. in clothes this week after putting the card in my wallet for the first time.
I am an addict too. I appreciate your honesty and now I will do the same. Be honest.
Peace and best wishes!
December 13th, 2007 at 6:55 pm
I just started reading through your blog, so maybe I’m missing some context, but… is there a way you could train yourself to regard credit cards differently? As long as you pay in full at the end of every month, there are real benefits to charging your expenses, such as 1-3% cash back on your purchases, a month’s worth of interest on a free loan from the CC company, and no worry about overdraft or ATM fees. It seems too bad to miss out on all those.
December 13th, 2007 at 9:14 pm
@kweeket: I was just thinking about that very thing on my drive home tonight. I know several people who do this successfully and I hate the thought of leaving money or rewards on the table (miles could help pay for my honeymoon!).
I think I’m going to hold off until I observe a cooling-off period. Maybe by mid 2008 I will be ready to make a leap like that.
December 14th, 2007 at 11:28 am
Heidi, don’t let them fool you. A few airfline miles or 1% cash refund will never compensate for the extra spending you do with plastic. I cut up all of my cards except one a year ago. I left the one in my desk drawer because I wanted the security I guess. After about six months of having survived without using it one time I woke up and said “this is stupid, security does not come from a credit card”. I called AMEX, closed the account, and put it through the shredder. It was very freeing. If I don’t have the money, I don’t buy. We are saving money like never before. Go Girl!!!!!!!!!!!!
January 9th, 2008 at 7:07 am
Found your site by accident but it is very nice