Last night I realized that with a $48k debt snowball, like a hostage situation, Stockholm syndrome eventually sets in.

We have become comfortable with our method, level of focus and debt-reduction. Yes, we have three debts left, but we are making steady progress and have a plan. Mechanically, the system has found a groove: income is earned, payments are made, debt goes down.

In a way, when you have gotten used to living on a budget and spending less than you make, you can buckle down, do the work and forget the “whys” of getting away from credit card companies.

Then they remind you.

Last night I received a statement for our largest debt. Usually I barely look at them, but the “minimum due” caught my eye right away. It has been the same for ages, but had been raised quite a bit!

“They raised our rate when I closed the account to new charges!”, I thought. Even though I specifically asked if closing the account would affect our rate at all. Paging down the statement, sure enough, our APR had gone from 16% to 23%. This is in addition to the rate increase of last October on our third largest debt.

I took a breath, grabbed the phone and waited on hold ready to uncork on whoever answered.

Of course, it wasn’t worth my time in the end. The rate increase was across the board, I was told, and had nothing to do with closing the account. There was no opt-ing out or reversing it. That’s just they way it is. Although they did offer us a personal loan at 18% instead which I declined.

My dislike for the credit industry is matched now only by my apathy for their business methodology.

Nonetheless, with our plummeting FICO score in hand (I think we’re at 680 now, via: creditkarma), I will try to get a lower interest rate personal loan from our local credit union or regional bank and move our business there.

I’m not sure it will be worth it, but as it stands now 63% of the payment to that card will go to interest this month. That change will extend our debt snowball by nearly four months and even a small fee would be worth paying to stay on track, I think.

Did I mention I applied at a Pizza joint to be a driver? Seriously. I’ll let you know how that goes.

In the mean time, thanks for the reminder, Wells Fargo. I hate you too.

the Dad

© the Dad, Climbing Out, 2010. | 12 comments

You know how every so often you back out of the dream world you live in and face facts? Yeah, me neither, but still… Don’t get me wrong, dream worlds can be hilarious.

For example, last night. I dreamed I pulled out my Google Credit Card and… actually… used it.

Like I said, hilarious.

What I realized last week with a bolt of spine-tingling clarity is that we were a stop sign, a break pedal, a mongoose-crossing-the-road away from debt. Last year we bought The Wife a $4,000 car with cash and gleefully insured it with liability coverage. Not comprehensive.

Not a big deal?

Really.

Well, let me tally what we have in the ole savings account… hmm… $1,000. Right. Baby step 1. How much is that car worth again?

So as of today we have comprehensive coverage on both cars and you know what? It cost us $192 more per year.

Our cars probably have three to four years of life left in them so for $600 – $800 we completely defer thousands of dollars of risk.

This makes sense. Maybe someday when we have enough in savings to write a check for a car when we total ours we can drop that full coverage, but to pretend that we can today is sheer folly.

I feel so friggin grown up I’m gonna puke.

So does Google even make a credit card? What was THAT all about?

Love,
the Dad

© the Dad, Climbing Out, 2009. | 4 comments

We are both sure enjoying your postings on “Climbing Out”…………great stories, much humor, lots of humility and strong resolve…..bravo!

Just a loving observation…….near the end of the Wells Fargo missive you, for the 1st time I believe, shifted blame in a slightly vulgar vein by referring to these evil lenders….as ‘asses’………..that word and that tone stopped me in my total and complete support of your efforts and new ideals……for the first time you shifted the blame to THEM….and in a crude fashion……as though THEY maybe held a gun to your head to borrow. To make this thing (debt free) work, and make it work enjoyably….my experience shows that I have to stay on my side of the street. I did this to me….not, THEY did this to me…. as long as you think you are not totally at fault you will not be totally committed to this new resolve.

Up to that one line, and then after, you told a great and factual story….and you got great feedback as to what you might do to mitigate some of that ridiculous interest increase…..but you have to know that from the start you were getting into bed with dogs….and the chance of fleas was there….and fleas have a tendency to multiply without prior warning…..

Hope I made my point in a loving and helpful fashion……my only intent is to see you succeed in this wonderful endeavor. We love your postings..!!!!!!

I think this was an excellent observation and very kind feedback.

With the new credit card consumer protection act (cnn, fox) going in to force next Spring, card issuers are doing what they can to maximize their profit and lock us in now.

The truth is according to our credit card agreement today Wells can do whatever they want to our interest rates and minimum payment whether we have been responsible customers or not (a warning to all of you who “pay it off every month”), and yes, we did sign that agreement.

I didn’t mean to adopt a kind of ‘victim language’, but I do love some well-placed vulgarity — which is why I read Heather Armstrong’s Dooce. Highly recommend it.

Keep your feedback both positive and negative coming; it is all welcome! We will answer it regularly here on Climbing Out or privately if you prefer.

the Dad

© the Dad, Climbing Out, 2009. | 3 comments

Race car, Lightning McQueen, gets thrown in jail in Cars after getting tied to a weighty statue and driving through town, tearing up the road behind him as he goes.

On my daily 70 mile commute I see so many cars that I envision dragging a huge anchor just like McQueen behind them in the form of a monthly payment. If not for the car itself then for the stereo in it, the custom tires or some maintenance that just had to be done. Not that long ago I would have been one of them. Thankfully, (say it with me now) we do not borrow money.

Since that includes “emergency” repairs I am proud to give you an update. It has been 6 weeks since I had air of any kind in my little Civic. In that time daily highs have been up to 104F. I did a 700 mile road trip through stinky cow country with the windows down. However, not once did we consider borrowing to repair the car.

We stuck to the budget and last Saturday I handed $950 cash to the nice lady at the service desk and the air works again.

Wow. We actually went without, stuck to a plan, and saved up for something we wanted. This behavior-modification stuff must be working. There was a time I would have just whipped out a credit card and paid for the repair immediately… then dragged that payment around for a year.

It seems ridiculous that it took so long to figure out that living with a deliberate plan for your money is not only the right way, but it’s easier too. Things are simpler when you budget to your values and not borrowing a dime has become one of ours.

It may have taken a month and a half to save up for the repair, but that car drove away from the dealer light as a feather dragging absolutely nothing behind it at all.

the Dad

© the Dad, Climbing Out, 2009. | 7 comments

This week I got served big, slimy credit-card-version slices of that pie after two statements arrived with zeros on them. One from Home Depot and one from B of A.

Yay! Two cards paid off forever. Time to cancel the accounts. I was relishing the moment as I dialed the 800 number and waded through labrinthian menu structures to reach the hapless, unsuspecting agent who would soon be begging me to stay.

When the Home Depot rep heard why I was calling I was passed on to “someone who could help me with that.” Oh did she fight for me. Yes! This was the free entertainment I was hoping for!

She was saddened and actually hurt that we, “I see you are long-time customers”, would leave.

“You still take cash, don’t you?”

She chided me, “Are you forgetting about emergencies?” She played on my fears, “Don’t you want to be able to take care of your family? You don’t want to be left out in the cold with no credit if something breaks, do you?”

Sweet music to my ears. “Good thinking!” I said, “We have an emergency fund for that, though. We’ll be okay. Thanks.”

Discounts, zero-interest, this sweet cubiclelian*-lady gave it her all, but in the end she agreed to close the account and our brief, yet entertaining, relationship came to an end.

Then it was B of A’s turn. Fresh off the fun of the prior call it was through the menu maze again for more pleading. I couldn’t have been more wrong.

No forwarding to “someone who can help you with that”. No chiding. No sadness.

“Okay, sir, as of five pm today that account is closed. Is there anything else I can help you with?”

Really? No pining? You won’t even miss me?!

As the green glowing screen of the cordless phone went black with a push of the Off button I couldn’t help but feel a little cheated. All those years as a customer really didn’t mean anything to you, did they, B of A?

Ha! Me neither. Two down.

the Dad

*cubicleian: n. a resident of a cubicle, yes — I made it up

© the Dad, Climbing Out, 2009. | 2 comments