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I'm going to start using my mattress as a bank.

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Dec. 14th, 2008 | 07:07 pm
mood: nerdyFirst Sleepy's Bank, N.A.
music: Yeah Yeah Yeahs - Is Is | Powered by Last.fm

It gives pretty favorable interest rates for a piece of furniture.

I haven't forgotten that I'd promised to write an entry about my thoughts of credit card companies and their recent approach to customers way back in August; I was just procrastinating. This evening I'm putting off revising more personal statements for graduate school, so why not get that done? :) Of course, since I first paid off my credit card debt in August and became free, a whole lot has happened in the industry. My original thoughts are still relevant, though, and I'm inspired to share them by the many great personal finance bloggers I read as I tried to get out of the debt.

I never had a credit card until after I graduated from college; I simply had the thought implanted in my head that living within the means I had at the time (which in college were quite meager) was the only way to go, probably inspired by my parents. They do actually have credit cards, but have only relied on them for large purchases, and have always paid them off promptly. Unless anything has changed from the time I was growing up, their credit rating is also through the roof. Anyway, I finally applied for a credit card through Bank of America in the summer of 2005, knowing it would be helpful as I was entering the adult world of renting apartments, traveling more than I had before, and so on.

It was a pretty simple tool for the first year, but after I moved to my own apartment I leaned on it more than I should have. I carried between $2,000 and $3,000 balances on it until last summer, which isn't a lot compared to many folks, but it was both more than I was comfortable with and was partially being used for daily expenses, which I didn't like to do. By that time I was thoroughly sick of the finance charges and interest and junk fees as well as the bank's attitude toward me. At some point in the last few years, banks moved their focus on people like me from earning money from interest on accrued balances to developing a web of new fees. So suddenly I found myself with $39 charges when my payments arrived a day after they were due (which happens to be on a Sunday most of the time), when I'd mailed them a check through the Post Office, which doesn't make deliveries on Sundays. It was infuriating to have to call and argue with the phone CSRs about these things, when they obviously had no control over their employer's policies.

Moreover, my credit limit kept ballooning like crazy. I started with what seemed a standard limit of $2,000. As I continued to pay at least something every month, it kept going up, from $3,000 to $6,000 to $11,000 and so on, until now it's $17,000. I don't know how much demographic info they have on me, but I'm pretty certain that I couldn't go out and get a $17,000 loan from anyone at this point. It's just perplexing that BofA seems to be encouraging me to spend way more than I can afford; maybe they're counting on me comparing my balance to the limit and justifying more spending because it looks so low. Not that that's working. Coupled with that, they also started offering me the option of extremely low minimum payments sometime over the last year, as low as $15. It would have taken me literally the rest of my life to pay off the debt I used to have if I actually took them up on that offer.

Now, of course, these financial institutions are in heaps of trouble, and I can't say I'm sorry for them if these are the practices that their leaders pursue. Me, I'm a pretty small time customer for them under the circumstances, so even if I wasn't paying my bill at all, I'd have little impact. But for people that are actually not paying their five-digit credit card balances, this just seems like a disastrous way to do business. Now that I was able to pay off my debt and get off of the CC treadmill, I'll primarily be using credit cards in the way my parents do, and I won't be surprised to see banks continue to get in further trouble.
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Comments {6}

why yes, i *do* like the sound of my own voice

(no subject)

from: lucypevensie
date: Dec. 15th, 2008 02:21 am (UTC)
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Credit card companies = bitches. There is so much epic boggling stupidity on both sides that I simply cannot ... ERGH. IT'S SO DUMB. ::kicks something, nothing in particular::

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jonathan

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from: silverthief2
date: Dec. 15th, 2008 03:55 am (UTC)
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LOL that was meant to be the spirit of this entry but then I started talking about facts. But yes, I completely agree with you.

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why yes, i *do* like the sound of my own voice

(no subject)

from: lucypevensie
date: Dec. 15th, 2008 04:17 am (UTC)
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Leave it to me to cut to the heart of the matter. Especially when it involves kicking things!

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jonathan

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from: silverthief2
date: Dec. 15th, 2008 09:02 am (UTC)
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Certainly a vital skill in Adult Life! :D

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Mark

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from: mahka42
date: Dec. 15th, 2008 07:31 am (UTC)
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What I think it is kind of interesting is that unlike your parents, my mom has always used credit/charge cards for every day purchases, but of course, paid them off, in full, every month.

Me...I never carried a balance until just recently, when the expenses of moving have just hit me. But...balances are for the most part declining, so I look forward to the day, hopefully sometime next year, that I'll be back to just standard revolving balances.

I do still remember a story one friend told me about her relatoinship with Chase...and how she was told that she was a bad customer because she didn't make the bank money by not carrying a balance. Which, I think, is why I tend to stick to AmEx...

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jonathan

(no subject)

from: silverthief2
date: Dec. 15th, 2008 09:04 am (UTC)
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Yeah, AmEx is where it's at. And it appears to be the case that if you're willing to tell the internet the status of your credit card balance, then you are pretty much on top of things (unless you start a blog specifically to chronicle your journey to pay off $37,000, that is).

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