Credit Card Interest

November 2001
by Karen Fuller

Here are some words to live by: the only things you should borrow money for are a college education and a house.

I was a credit card junkie. I had every store credit card imaginable and every major credit card simply because they were offered to me, and it seemed so handy rather than writing a check or paying cash. Back in my college student days I could also spend beyond my means, an enticing trap. If I added up all of the interest I had paid in credit card interest over the last 20 years and calculated what that money would be worth now had it been invested, it would likely be worth hundreds of thousands of dollars. BUT it isn't, because I didn't invest this money: I paid it all to credit card companies. I didn't even realize what percentage I was paying in interest on most of these cards.

I now only have one major credit card with any debt on it at zero percent interest and I soon will not have any credit card debt at all. I consolidated my cards even if they had almost nothing on them because an offer was made by one company allowing me to do this at zero percent interest for a year and then 12.99% after that.

It is almost impossible to live life without a credit card these days, but make sure you can pay it off when the first bill arrives. Otherwise you can't afford whatever it was you bought. Add up and then invest the money you have been paying in credit card interest and see where you are in 20 years. 20 years goes by quickly! It seems like I just got those cards, but it has been nearly 20 years. It felt really good to cut them up with a zero balance! Shop around. Ask about consolidation rates. Most are from zero to 9.99% for a certain period of time.

I wasn't as gutsy 20 years ago as I am now. I have actually said to these credit card companies, "I have paid off this card in full; I have been a loyal customer of yours for 20 years and have been paying a very high interest rate. I would like my interest cut to the 12.99% that another company has offered me or I will cut up this card and close the account." Your chances are good that your interest rate will be dropped. If it is not, close the account and let someone else pay all that high interest! It is their loss and your gain!