Today's debt: Holding at $23,210.24.
I'm managing my debt pretty well, if you overlook that one pesky fact of owing a sum greater than my annual pay. If I was paying bad credit card interest rates in the 17%-21% range, I would be truly screwed, the interest rising faster than I could afford to pay each month, the debt steadily creeping upward even without any new purchases. Average interest rates in the 13%-16% range wouldn't be much better, pretty much treading water with my monthly payments with little hope of paying down the principle. The best interest rates commonly offered on credit cards today, in the 9% to 12% range, at least offer me a fighting chance of paying the sucker down, with at least half of my monthly payments going towards the principle.
In fact, most of my credit cards are in that 9%-12% range offered to good customers, an indication of the deep love my credit card companies have for me. But in truth, they do not merely love me. They know me. Oh, they know me so well. They get inside my brain and they can just feel that tension between thrift and spendthrift that exists in my psyche, they know that even at 10% interest I would be very hesitant to run up such a debt. They know that a devilish cautious streak lurks in my heart, a caution that could very easily have turned these past decisions to accept their sweet offers of money into a resolve to spurn them. And so they offer me even better.
Oh yes, I've played the balance transfer game. I have been so fickle. All it takes is some cute envelope slipped into my mailbox, dressed up in a skimpy little interest rate, and I throw my money at them. Huge chunks of my debt have gone months with only 3% and 2% interest, sometimes even no interest at all.
But even here my credit card companies know me too well. They know that I was growing weary of all the running around, never staying with any one card for more than a handful of months. They also knew that I was afraid of being caught in my fickle unfaithfulness, that I knew that too many balance transfers can damage your credit rating. So they offered me a nice, comfy relationship, interest rates of 5.9% and 6.9%, good not just for a few months, but for the life of the debt. They even offer to waive the transfer fees.
So that's where I am, with the entire debt cuddled among three cards for a lifetime 5.9% and 6.9%. Oh, once in a while I still cheat on them, bite off a thousand dollar chunk of debt to have a six month fling with a card offering me 2% with no fee, but for the most part, I'm faithful and relatively happy.
And so yes, they know me. They know how to keep me tied to them. At these rates, the interest on my debt currently is still a ghastly $120 per month...and yet, with that amount, over three quarters my monthly payment still goes toward the principle. I can watch the debt go down each month. According to the debt plan in my Microsoft Money software, I can be out of debt within four years.
They know how much that pleases me. But they also know that as I see the debt go down, the temptation to spend and borrow rises, and they've always got one more sweet low interest offer to seduce me with. I try to get out, but they keep pulling me back in....
By the way, this week one of my cards informed me they were raising my credit limit another $4000! Mwah! I love you guys!
Saturday, February 15, 2003
Thursday, February 13, 2003
Terror Fuels Shopping Sprees
"Concern Fuels Shopping Spree" proclaims a front page headline in today's Philadelphia Inquirer. It seems that the government's raising the terrorism threat alert from yellow to orange has spurred Americans to do what they do best: go shopping.
The Inquirer offers several quotes from people enthusiastically enlisting in the government's call to shop. Says Kitty Leva: "There are terrorists out there. My husband and I and our cat have to be ready." And Natalie Hogan says: The TV-news people say America is taking safety too lightly. I don't know what to do. It's all so hard to figure out."
Fortunately, our retail establishments have stepped forward to do their part to stoke our national shopping emergency. Home Depot has put together a special display of duct tape and plastic sheeting, perfect for keeping clouds of mustard gas from getting in the house and stinking up the upholstery.
Reports the Inquirer: "People stood in nervous knots before hastily arranged displays of disaster supplies in home and hardware stores....More accustomed to questions about grouting bathroom tile than repelling chemical and biological weapons, store employees did their best." I'd say that's a heavy responsibility for people earning minimum wage.
Even the mayor of Philadelphia, great leader that he is, was spotted picking up a roll of duct tape at his local hardware store.
Of course, virtually every knowledgeable person agrees that plastic and duct tape isn't going to do a damn thing in the event of a chemical or biological attack. However, if you want to spend around $15,000 you can have a safe room constructed in your home, windowless with thick concrete and steel walls. And don't think there aren't plenty of patriotic contractors out there who wouldn't be happy to build it for you.
More than voting, more than protesting, more than educating oneself, shopping is the primary form of empowerment for many Americans. It is therefore only natural that, faced with prospects too frightful to face, shopping is where people will channel their energies and anxeties.
As for me, the amount I've spent on emergency supplies in the face of the Code Orange terrorism alert is zero. And the credit card debt holds steady at $23,210.24 even in the face of terror.
The Inquirer offers several quotes from people enthusiastically enlisting in the government's call to shop. Says Kitty Leva: "There are terrorists out there. My husband and I and our cat have to be ready." And Natalie Hogan says: The TV-news people say America is taking safety too lightly. I don't know what to do. It's all so hard to figure out."
Fortunately, our retail establishments have stepped forward to do their part to stoke our national shopping emergency. Home Depot has put together a special display of duct tape and plastic sheeting, perfect for keeping clouds of mustard gas from getting in the house and stinking up the upholstery.
Reports the Inquirer: "People stood in nervous knots before hastily arranged displays of disaster supplies in home and hardware stores....More accustomed to questions about grouting bathroom tile than repelling chemical and biological weapons, store employees did their best." I'd say that's a heavy responsibility for people earning minimum wage.
Even the mayor of Philadelphia, great leader that he is, was spotted picking up a roll of duct tape at his local hardware store.
Of course, virtually every knowledgeable person agrees that plastic and duct tape isn't going to do a damn thing in the event of a chemical or biological attack. However, if you want to spend around $15,000 you can have a safe room constructed in your home, windowless with thick concrete and steel walls. And don't think there aren't plenty of patriotic contractors out there who wouldn't be happy to build it for you.
More than voting, more than protesting, more than educating oneself, shopping is the primary form of empowerment for many Americans. It is therefore only natural that, faced with prospects too frightful to face, shopping is where people will channel their energies and anxeties.
As for me, the amount I've spent on emergency supplies in the face of the Code Orange terrorism alert is zero. And the credit card debt holds steady at $23,210.24 even in the face of terror.
Past is Future, Future is Past
Todays debt: Holding at $23, 210.24
I received an interesting comment on yesterday's post:
A fascinating point of view, and it's worth re-examining my own situation: have I gotten into this mess through surrendering to life?
In truth, I may be guilty of the opposite. I'm too damn optimistic about my life prospects. This $23,000 debt has risen steadily over the course of about four and a half years, and it has grown not in a slow death of a thousand small purchases, but rather in several large spurts rooted in efforts to have a richer, more meaningful life. A good part of the debt comes from the following:
Even among the heavily indebted there are divisions and prejudices. I know people who have built up credit card debt comparable to ours by purchasing a ton of stuff, furniture and electronics and gadgets and clothing, and I confess that I look down on their materialistic foolishness. I feel that our debt, built on the desire for better work for ourselves and on the quest for experience and travel is somehow more righteous, more justifiable. Of course, those who max out their credit cards accumulating stuff may see us as the fools, with little tangible to show for our debt.
And I am painfully aware that there are also people who have become heavily indebted out of necessity, suffering through high medical bills or the loss of a job. To them, our debt must seem terribly foolish and frivolous.
I received an interesting comment on yesterday's post:
"I think for some people taking on an unmanageable amount of debt is a form of surrender to life. They, either consciously or unconsciously, don't see that they can ever achieve a particular financial goal, or could ever leave their current financial situation, so they give up. They take the money now, because tomorrow just ain't comin' for 'em."
A fascinating point of view, and it's worth re-examining my own situation: have I gotten into this mess through surrendering to life?
In truth, I may be guilty of the opposite. I'm too damn optimistic about my life prospects. This $23,000 debt has risen steadily over the course of about four and a half years, and it has grown not in a slow death of a thousand small purchases, but rather in several large spurts rooted in efforts to have a richer, more meaningful life. A good part of the debt comes from the following:
- My wife seeking to start her own business. We borrowed for start-up expenses, for living expenses when she left her full-time job to do occasional temp work and devote more time to the business, and for taxes on her earnings. She has not yet made as much as we'd hoped, but continues to work at it
- My switch from restaurant work, which provided a decent income through tips but was physically exhausting and soul-crushing, to a retail bookstore job, which was much less stressful, much more enjoyable, and much lower-paying. Last year, two years after making the switch, a promotion to management finally brought my pay close to what I'd formerly earned through tips
- A two month trip to India, Nepal and Tibet in 2000, and two weeks in Peru last year. These may seem foolish choices, but for us travel and the experience of other cultures is vital. With globalization making the world slowly more homogenous, and with our bones getting creakier and less tolerant of travel in the developing world, we made the decision to go now and pay later
- House expenses, including a new roof (necessary), a new bed and a replacement washing machine (both perhaps debatable)
- A new computer last year for me, to replace my 1994 model, justified as a necessary expense for my freelance writing
Even among the heavily indebted there are divisions and prejudices. I know people who have built up credit card debt comparable to ours by purchasing a ton of stuff, furniture and electronics and gadgets and clothing, and I confess that I look down on their materialistic foolishness. I feel that our debt, built on the desire for better work for ourselves and on the quest for experience and travel is somehow more righteous, more justifiable. Of course, those who max out their credit cards accumulating stuff may see us as the fools, with little tangible to show for our debt.
And I am painfully aware that there are also people who have become heavily indebted out of necessity, suffering through high medical bills or the loss of a job. To them, our debt must seem terribly foolish and frivolous.
Tuesday, February 11, 2003
Welcome to DebtorsPrison
Today my credit card debt stands at $23, 210.24. This debt is larger than my annual take-home pay. It is over half the take-home income of my wife and I.
Seven years ago, the only credit card I could get had a $500 limit, secured by a $500 bank account which I was required to maintain for eighteen months in order to prove my creditworthiness.
I guess I proved it, because now even this huge debt is just a fraction of the money that MasterCard and Visa have made available to me.
I used to think that responsible behavior like paying your bills on time was the key to earning good credit. I now realize that what brings you the whopping high credit limits is irresponsibility, the willingness to surrender your good judgment to the lure of desire.
I love my credit and am grateful that it has allowed me to build a happy life for my wife and myself, to own a home, to have traveled to over thirty countries, and to own a hell of a lot of stuff. Nevertheless, for all the freedom my credit has brought me, the accumulated debt brings a powerful burden of worry. Even worse, it now serves to constrain my freedom. I have entered a type of debtors' prison.
This weblog intends to examine this peculiar consumer society of ours. Life with easy credit and abundant choice can be very sweet indeed. And yet we are also living in a kind of madness, continually tempted and urged to do things which are not necessarily good for ourselves, for society or for the planet, things we might not have done if we had the constraints of tight money and fewer choices.
I don't intend simply to rant and blame society, corporations, the government or the media. That would be too easy. It's true that my politics are left-leaning, pro-conservation, suspicious of big capitalism, and generally appalled by much of the mindless consumption I see around me. Nevertheless, it is also true that despite my political beliefs, my good intentions and my low wages, I too have been lured into the debtors' prison.
This is not meant to be only my story. If society has constructed for us a debtors' prison, then it is a prison into which many of us have freely, willingly and even joyously entered and remained. I hope this, and a future website, can become a forum for people all over the world to discuss their debts: how they got there, how they deal with them, their feelings about it both good and bad.
I hope that through our stories and our insights, we can learn to fight back. By looking at everything around us with a fresh eye, by better understanding both the rewards and the consequences of our possessions, we can gain the tools we need to resist the siren song of "you want this, you need this, you have to have this, now buy, buy, buy......
Seven years ago, the only credit card I could get had a $500 limit, secured by a $500 bank account which I was required to maintain for eighteen months in order to prove my creditworthiness.
I guess I proved it, because now even this huge debt is just a fraction of the money that MasterCard and Visa have made available to me.
I used to think that responsible behavior like paying your bills on time was the key to earning good credit. I now realize that what brings you the whopping high credit limits is irresponsibility, the willingness to surrender your good judgment to the lure of desire.
I love my credit and am grateful that it has allowed me to build a happy life for my wife and myself, to own a home, to have traveled to over thirty countries, and to own a hell of a lot of stuff. Nevertheless, for all the freedom my credit has brought me, the accumulated debt brings a powerful burden of worry. Even worse, it now serves to constrain my freedom. I have entered a type of debtors' prison.
This weblog intends to examine this peculiar consumer society of ours. Life with easy credit and abundant choice can be very sweet indeed. And yet we are also living in a kind of madness, continually tempted and urged to do things which are not necessarily good for ourselves, for society or for the planet, things we might not have done if we had the constraints of tight money and fewer choices.
I don't intend simply to rant and blame society, corporations, the government or the media. That would be too easy. It's true that my politics are left-leaning, pro-conservation, suspicious of big capitalism, and generally appalled by much of the mindless consumption I see around me. Nevertheless, it is also true that despite my political beliefs, my good intentions and my low wages, I too have been lured into the debtors' prison.
This is not meant to be only my story. If society has constructed for us a debtors' prison, then it is a prison into which many of us have freely, willingly and even joyously entered and remained. I hope this, and a future website, can become a forum for people all over the world to discuss their debts: how they got there, how they deal with them, their feelings about it both good and bad.
I hope that through our stories and our insights, we can learn to fight back. By looking at everything around us with a fresh eye, by better understanding both the rewards and the consequences of our possessions, we can gain the tools we need to resist the siren song of "you want this, you need this, you have to have this, now buy, buy, buy......
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