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Losing at Cards

Ron Wayne

QUITTING CREDIT CARDS might be more difficult than quitting cigarettes. I’ve done both. I’ve not smoked in 36 years. But it wasn’t until 11 months ago that I stopped charging on my credit cards.

I got my first card at age 15 from the biggest department store in my hometown. It was 1971, and my card’s limit was $50. The store was locally owned, so perhaps it was easier to obtain credit as a minor without steady income. But I think my mom also cosigned to ensure payment. I worked weekends at her catering business, and paid my bills from the income I made.

Fifty years later, I still remember that first piece of plastic in my wallet as I shopped at the Boston Store for clothes and gifts. And so began decades of using—and occasionally abusing—credit cards.

Amazingly, as a college freshman, I was able to get a BankAmericard, a predecessor of Visa. I remember being prudent with this card. It was helpful to have when traveling.

After I graduated college, I began working at my first job. That required me to get my own place a few hours from my hometown. I think that’s when my difficult relationship with credit cards began. My very low income made it hard to pay rent in a big city and still have funds for everything I needed—or wanted. That’s a distinction I didn’t always keep clearly in mind over the next four decades.

Emergency and necessary repairs are expected if you own a car or house. I often also needed a card for medical, dental and vision expenses, for my family and for me. These are needs that often can’t wait for the next paycheck.

But over the years, I certainly whipped out the Mastercard, Visa or American Express when I simply wanted something. Sometimes, you can say “no” to yourself. But when your child wants something, it’s hard to say “no”—even if you don’t have a lot of cash at the moment. Vacations also added to the credit card balances.

For decades, I always figured more income would be coming in, and then I could pay off these new debts. Personal finance experts say you should pay off credit cards entirely each month to avoid interest. I seriously don’t remember ever doing that. Almost half of all Americans carry a balance from month to month, with a $2,700 median amount owed.

Until 1986, you could deduct interest charged by credit cards on your income tax return. Inflation was high back then. I would rationalize that anything I wanted would be more expensive later on, so why not charge it now—plus it’s tax deductible?

I’ve been able to quit adding charges since I retired, mostly because the pandemic has kept me home and cloistered. I haven’t left my city for 18 months. I didn’t eat out until last June, and rarely since then.

But I still see items in stores and online that I’d love to have to make my life more comfortable and enjoyable. Then I look at the credit card statements. I’m still paying off balances run up when I went 18 months without fulltime work, and during my four years in a job that paid 40% less than my previous position.

One of the best consumer finance laws passed during the Obama administration requires finance companies to tell customers how long it’ll take to pay off their card balance. Paying just the minimum will leave you in debt forever, believe me.

Another bad decision I made was to roll over debt from one card to another with a lower interest rate. It sounds easy but it’s tricky. I recall maxing out the new card with the old debt, but not having enough credit on the new card to fully pay off the old one. Now I had two cards to pay, and my available credit was on the old card at the higher interest rate. You’re in the same rut as before. You can get hurt by transfer fees, too.

I was fortunate late last year to find a card that had no transfer fees, and an introductory rate of 3.99% for three years. I transferred the high balance from another card and closed it out. I am trying to pay off the new card within three years.

Experts will tell you to try to negotiate lower rates with your existing cards. When I asked, the finance company wouldn’t do that for me. But since I closed my account, the company’s been sending me offers for new cards because my credit score has increased. I gleefully tear them up.

I realize I’m not getting rewards or points since I quit charging, but frankly I don’t consume that much. I will use credit cards for travel because there are many benefits. But I’ll also be sure to have an equivalent amount of cash in my credit union to pay off my travel charges right away.

Credit cards provide the illusion of free money that a bank is kindly letting you use. But that supposedly friendly gesture is an easy trap. Stay away if you can.

Ron Wayne spent 26 years working for newspapers in Pennsylvania and Georgia before becoming the editor in the University of Florida’s main news office. During his 10 years working there, he earned his master’s degree in mass communication and taught as an adjunct in the College of Journalism and Communications. Since retiring last fall, he’s enjoyed a simple life, including reflecting on his experiences on Medium.com.

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