When I left the D.C. area to go to law school, I had one credit card from MBNA that I had gotten in college. Until I started working, I had paid it off almost completely every time I'd gotten a statement. Working for less than $30k a year in D.C. started to drive the balance upward so that it was never fully paid off. And since I had been paying it off so well for 4+ years in college, my limit was something like $13,000 at the time.
Enter law school. It is an expensive place to go, and the loans cover most of it--although the loans are both federal and private, which is expensive--the incidentals are not insignificant.
Cut to 2005/2006. MBNA has been bought by my bank, Bank of America, and in the ensuing years they have continually upped my credit limit to a staggering $22,000. Unfortunately, my inability to find employment immediately after law school left me with little option except to pile it on the card. Or at least, in my uneducated mind, there was little option.
Eventually, I lost my wallet and Bank of America, being the kind souls that they are, decided not to give me my credit card back and closed my account. Balance needing payment, of course. I don't know about you all, but if you've ever tried to pay off $20,000 at an interest rate of 24.99%, let me tell ya: it's like bailing out a rowboat with a thimble.
But I got a job, a pretty good one, and got help from my parents to get past the 90% interest/10% principal status I was stuck in. And paid down the loan as diligently as possible.
And then on Friday, I paid $756 to the credit card, and brought the balance to $0 for the first time since probably 2001. I decided to share that here because I consider it a major financial victory, and that maybe it can serve as a cautionary tale to those considering using credit cards to survive.
Find another way. It is an embarrassing state to be in, to have such bad credit that you have to go card-less for 3 years (as I have just done). It is embarrassing to have to get your parents to help you pay down such things (though, that is what parents are for, and I am paying them back as of now).
But thanks to the parents, and to a fairly frugal lifestyle this past 2+ years, I am free.
Now about those law school loans...
3 comments:
Dude. That is awesome. One day I hope to post the same exact news - although that won't be anytime soon. You are my financial hero.
Wow! That is so great! Very happy for you. I knew you would do it eventually, and actually did it pretty quickly. Has B of A gratiously offered to re-open your account yet?
jc
Well, it's awesome but in a "you only have yourself to blame" sort of way. I mean, I shouldn't have put myself in that situation to begin with.
That being said, yeah it's awesome.
And nope, BofA is not giving me my credit card back. I haven't even asked lately, I am going to stop using them outright soon so I'm okay with it.
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