My 99 Problems: Credit Cards? You Got It!

June 18, 2012 § 5 Comments

“Howdy do.  This is Peter McCallister, the father.  I’d like a hotel room please, with an extra large bed, a TV, and one of those little refrigerators you have to open with a key. [beat] Credit card?  You got it!”

This is a line from the award-winning* 1992 feature film, Home Alone 2: Lost in New York.

*A BMI Film Music Award for John Williams.

Easily one of the best lines ever written, Kevin has acquired his fathers credit card and is now using it to book a swanky hotel room in New York and with the help of a TalkBoy has no problem getting and booking the room and racking up thousands of dollars in bills.  Credit cards have many good qualities when used properly, but certainly have no business in the hands of a child or even a young adult.  It takes many years of learning about finances to understand how to properly use one, so it makes perfect sense as to why Kevin may not understand how badly he is abusing this privilege.

It’s the same damn problem that I saw with myself and nearly every friend I had in my early 20s.

You see, I was the lucky one.  By the time I had gone off to college, I already had four credit cards but none of them had a limit over $1000.  I believe the first one I ever got was from Best Buy after having worked there and being told by the management (we were opening a brand new store) something along the lines of “Okay guys! Come get your credit cards!”

Uhh, okay.  I signed up and all of a sudden had $600 of “free money” which I promptly used to buy a DVD player and I think a Playstation 2.  In no time, that sucker was maxed out but with $15 minimum payments, I was living on easy street.  These credit cards are a lot of fun, no joke!

I promptly had three more credit cards and it wasn’t long before they were all maxed out.  Having spent the next five years in college as a broke college student, the cards stayed maxed out.  I’d make minimum payments every single month and then it would just take the one time where I forgot about making a payment that all of a sudden I was maxed out again thanks to late fees and over-the-limit penalties.

I would pay thousands more to the credit card companies over the years without ever having made any progress.  Why was I the lucky one?

By the time I was about 25, I talked to more and more of my friends about credit card debt and found out that the best thing that ever happened to me was getting limits of only $1000. My girlfriend had a debt going over $20,000.  I then soon found out that at least three of my closest friends also had credit card debt going over $20K.  How could this be possible?  Why were the credit card companies never so quick to trust me with that much of a balance but my friends managed to get all of this limit?

The saddest part about a credit card is that you have a balance but rarely do people even have an object that they can point to and say “Well at least I have these things!”  I remember buying that DVD player, a PS2, and a Gameboy.  The rest of my debt parlayed around things like food, nick-nacks, patty-whacks, and clothes maybe.  I had nothing to really show for my debt except just that: debt.

The scariest part about a credit card is that it doesn’t slap you in the face, it lulls you to sleep.  They don’t want a big payoff all at once, but much like organized crime, they want to milk you forever.  Visa, Mastercard, American Express… they’re in this for the long haul.  I may have only had small limits but they knew that with interest rates between 20% and 30% and small minimum payments, they could squeeze three times or more money out of me.

I have never understood why we teach certain subjects in school, but “Finances” or “Real World Economics” wasn’t a required class for all high school seniors or juniors.  Why in the hell aren’t we teaching kids about the shit that could save their lives or at least make their first years of adulthood a little easier?  Why aren’t we teaching kids stuff that could actually help make their lives better?  Kids often ask why they have to take math and the answer is usually something like, “Trust us, you’ll be using these in real life all the time!”

Well teach me how to apply it mother#$@#%!, don’t just tell me that I will!  Show me a credit card statement and teach me about how having credit card works.  Show me that if I get a balance of $5000 and end up making the minimum payment for 10 years, I’ll end up paying X amount more than $5000 and still have a debt of Y.  Math teachers use stupid analogies for their math problems rather than all of the REAL WORLD applications that it could have towards me having a better financial future.

Money problems seem to be the number one cause of stress, divorce, anger,  depression, etc, but it still seems like everyone, including the schools, is on the side of the huge financial institutions.  Where was all the help for the stupid Americans before they got houses they couldn’t afford?  Where is all the help for students that are about to enter the world with $100,000 in student loan debt and $25,000 in credit card debt?  Why can’t these kids get free financial help in school rather than paying another fee to someone else that’s going to help them get out of debt by consolidating loans and other means, when we could have helped them before this became a problem?

Yesterday, I made the final payment on the first of my three remaining credit cards.  By setting out a plan of how I would finally get out of this debt, I have now said “GOODBYE AND PEACE OUT FOREVER!” to one of my cards.  Thankfully, my relatively low balances have put each of these within striking distance and by growing up and being smarter about my finances, I can start to ease myself out of the pool of financial hell and walk onto the beach of no-debt living.

It took me over 10 years to get to this point and I’m thankful that I have made steps towards this resolution, but it still makes me very angry that for whatever reason we aren’t teaching things in public school that would actually help every student as they get ready to live in the real world.  Kids need this kind of education.  Kids will eventually find out that they WANT this education.

If we were giving kids education like this, then maybe Kevin wouldn’t have stayed in the most expensive hotel in New York and racked up thousands more dollars while staying there.  See parents, this is a good lesson for you too.


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§ 5 Responses to My 99 Problems: Credit Cards? You Got It!

  • tiffy4love says:

    There is so much unnecessary math that they teach us in school, but somehow they manage to leave out finances. For institutions who claim they want us to succeed, why would they leave out such a needed lesson?

    • It’s really a mystery. Of course, I have been out of school for a long time but maybe some readers of my blog are teachers that can shed some light onto it. Teaching kids about debt, credit, student loans, would be so important as they enter the real world.

      It’s so easy to get a credit card when you’re 18 but nobody is teaching these kids what they’re getting into.

      • tiffy4love says:

        There are many lessons in life, so you can always learn. I’ve always wanted to take a class just in finance so I won’t ever be trapped by debt. It’s extremely important. Most kids don’t know. Especially when they go away to school. In high school, I was lucky enough to have a guidance counselor tell me stay away from student credit cards. But there’s still so much to learn. It should be essential in school to learn these things.

  • sweetsound says:

    You are so right! At least you know if you ever have kids, this’ll be something you teach them instead of waiting for the schools to do it. I’ll never forget the shock of learning that the 14% interest rate on my first car loan meant I owed more than the car was now worth, and I was stuck with it. No one explained that to me before I bought the thing! This is really needed. Hey, good entrepreneurial op. Start a business or non-profit and teach kids the basics. :)

    • Truth.

      A class on renting an apartment, buying a home, buying a car, getting a credit card, applying for student loans and grants and what that means, all of this could help teenagers as they enter the real world rather than learning as they go they could learn from people who have lived the experience. I would hope to teach my kids this information if I ever have kids, but would be very happy to help kids that I share no bloodlines with as well! Credit cards are a great way to build credit but for years, it has been destroying my credit without me knowing it. Kids should definitely be armed with this knowledge, whether they choose to use it or not is up to them, but they should know the basics and many of them do not.

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