Wednesday, May 20, 2009
Is Credit Card a bill ?
After I got married my dad tried to help me put up a budget for our house expenses hoping to help me raise money for a down payment on the house.
I was already a bit in debt with my credit cards but I was able to manage it then. Actually I think the ship was already sinking but I just didn't notice the water comming in yet.
Anyway, my dad starts asking me about what things I have to pay every month and I'm telling him, water, electricity, fuel, food. He adds clothing and car repairs as montly items, probably to be saved up for when the real need comes up.
Then I had to tell him that I had to pay my credit card, and he said, "why"? I said it was one of my bills. And he said again "why"?. He calmly went on to ask me why was I paying credit card debt. He was under the assumtion that if I was using my credit card it was to pay for something that I could pay in full when I got my paycheck. He couldn't figure out why I would buy something with my credit card that I could pay at the most in two payments.
As you can imagine, his good help didn't sink into my brain soon enough.
Today I do realize that when I see people listing their bills, and they say "I have to pay the house, and utilities, and food, car, fuel, and the credit cards...." I ask the same question, why is your credit card a bill. It should be just a payment type not an actual bill. I know that as most of us who are deep in debt and who owe so much money, the credit card was our tiny loan office. It allowed us to live beyond our means and not face the difficult task of having to put off purchases for when we really could afford such things.
Now years later I can't remember much what did I buy with my credit cards that was significant. I know that a couple of airplane tickets, a lot of groceries and utilities and cellphone bills, etc were put on those cards but back then I should've taken a look at that and stopped myself when I was starting on this downhill path.
I wish young couples or single individuals could read about our stories and look at their credit card statements. If you are only able to pay mininum balance, even if you are still not that much in debt, it's a sign you need to cut back on some expenses. It's a real nag to do so. To not be able to buy those nice clothes or shoes for you, your spouse or your kids. To not be able to have that meal out, that nice vacation that we THINK we deserve.
Well, it's is a horrible nightmare to do those things and them be left with the burden of debt long after the pleasure of whatever you bought is long gone. About the only thing I have to show for all my expenses on my credit cards is my kids education and my car. Everything else is just memories that I could've made sometime later, maybe a year or so, but without the burden of debt that I now carry. Without having to work two jobs and having all of that money go towards paying so much debt. Without having to think that I if I had all my income available to me today to pay the actual bills, with the money left over I could probably take all of my family to Disneyland every three months! IT SUCKS to owe this much money.
At least on a mortage you have a house to show for. it's the place you live in and it's eventually going to be yours. But credit card debt is like paying for sins of the past.
So, I'm working on paying up my credit card debt. I'm down to the last payment on my extrafinancing that I used to pay my car. The rest will go to paying my credit card debt. I hope that as I have to live frugally for several years, this new way of life will set into me and hopefully my wife. However I hope that most of all my girls get a good lesson on how to manage their money better than their dad did.
So, what do you think, is "credit card" a bill ?
I needed to post this, i've had it on my mind for a loooong time. Thanks dad for trying to steer me away from the dangerous waters, sorry that I didn't listen back then. I am listening now..
As usual, advice like this comes to us for free, and I guess because of that we don't appreciate as much...and yet we should. Have a good night..
PS..read my twitter updates in between my blog updates so you have a feel for how my days go by.
Posted by AJ at 7:57 PM