Credit Cards

You may have noticed that I haven't mentioned anything about credit cards.  The truth is, Pen and I don't have any credit card debt, mostly because we don't have any credit cards!  Well, that's not true.  To build my credit score when I was still a teenager, my mother did put my name on several credit cards of hers, but we've only used them sparingly since Pen and I got married, maybe once or twice a year.  I don't have the cards at my house, my mother keeps them at her house so we don't spend needlessly.  And there's good reason to think we would spend needlessly!

When we were just married and pregnant with Piglet 1 (I got pregnant at the age of 19, if you haven't done the math from my first post here), we had no money.  Pen was working at a window factory (where their main source of revenue was new homes) right when the housing bubble burst.  That sucked.  I was working at a lawyer's office and going to school full time.  I was paid "by the task" at the lawyer's office.  Writing a letter was $1.00, making a phone call was 50 cents.  I would work 16 hour days just to have a decent paycheck!  When I was five months pregnant I got appendicitis and spent five days in the hospital.  I was in a lot of pain after that, and my boss told me to "come back after the baby was born".  Thankfully, since I was a full time student, I was still covered under my parent's insurance!

Anyway, we were really bad off at that point.  We ate pancakes for lunch and dinner almost every day because a $1 box would get us almost through an entire week.  We were paying $650 per month in rent and only bringing in around $400.  It was a rough time.  So what did we do to ease our pain?  I got a Home Depot card, a Best Buy card, and a Chase card . . . and we spent.  We ate out for almost every meal because I had no desire to cook.  I went crazy on eBay, buying things for Piglet 1's nursery that we didn't even end up using!  We bought a patio set, a new BBQ, a big TV with a VCR and DVD combo, and tons of baby clothes.  In all, we had roughly $7,000 of credit card debt at the young ages of 20 and 21.  And then we couldn't afford to pay the bills. 

To make a short story long, we ended up "settling" on the Chase card and paying the rest of the balances off over time, but not before they completely ruined our credit scores.  And not just from the credit cards.  We've also had medical bills, student loans, and old bills go to collections.  My credit score is between 606 and 620 (which is not good), and Pen's is between 550 and 590 (which is really really not good). 

It will take years to build our credit score back up.  Negative items hang out for seven years, and we've had medical bills go to collections as recently as last month.  I've been denied for private student loans, a Sears card so we could buy a new dishwasher, and Pen's application for a car loan when his car died last year.  I'm still amazed that I managed to get a car loan for the van!  This is embarrassing! 

I know many of you are struggling with credit card debt.  Millions and millions of Americans are struggling with credit card debt!  I really like Suze Orman and I watch her show every week.  I'll include a link at the bottom to her site that explains how to get out of credit card debt.  For us, we paid what we could each month, paying more on the high interest cards.  When one card was paid off, we applied the entire amount we were paying on that card to the card with the next highest interest rate.  Then we paid off all the remaining balances with our tax return in 2009. 

So even though we're not currently struggling with credit card debt, I've still been there.  I know what it's like to have that amount hanging over your head.  And it's so easy for it to get out of hand. 

Here's a link to Suze's site on paying off debt: http://www.suzeorman.com/igsbase/igstemplate.cfm?SRC=MD012&SRCN=aoedetails&GnavID=84&SnavID=20&TnavID=&AreasofExpertiseID=5