Friday, April 24, 2009

Credit Cards

What a fantastic two or three days were in for! Today begins with the temperatures already in the 40s at my little corner of the world. We have wonderful, bright sunny, blue skies and the temperature could get into the 70s in some parts of Maine. A sea breeze along the coast will keep them down a little, but this will still be a great weather day.

The weekend is going to make this day seem cold. According to the weather forecast this morning, some parts of Maine, especially away from the coast, could reach 80. Naturally, along the coast, that sea breeze will probably prevent that from happening here where I live, but it will still be great. A cold front approaching from Canada is posing a question for Sunday and could keep that day just a little cooler.

Nevertheless, this Friday has the makings of being a really nice day.

I wonder how President Obama’s and Congress’s push to regulate credit card interest and fees will really affect credit. The President says that uncontrolled interest rate hikes are totally unfair and has told the credit card companies that they must reign in their practices. The card company executives counter that without the ability to charge high rates, they will have to issue fewer cards which could make credit more difficult.

I must say here that whatever happens won’t affect me. I haven’t paid any credit card interest for so many years that I’ve forgotten when the last time was. I’m not sure it dates back to the 1970s or early 1980s, but it could. Don’t get me wrong. We still use credit cards. All our gas, for example, gets charged and we always charge our vacations. A few purchases get put on the cards when we don’t have the cash readily available in the checking account.

Not one penny, however, is charged that can’t be repaid when the credit card statement comes in. Like we feel most people should, we plan for vacations and major purchases and don’t implement those plans until money is in the bank to cover them.

We took a very expensive, month-long trip to Alaska three or four years ago, for example, but began planning for that trip several years earlier. When the time arrived, all the money we would need was safely tucked away in the bank. I remember breaking out my checkbook to pay the travel agent when we booked the trip. She suggested we put it on a credit card so we’d have just a little protection.

Changing our buying/credit card use began for us in the late ‘70s when the economy went south then like it is today. In the years since we were married until then, we took advantage of every darn one of those two or three offers a week for a new credit card. Then maxed them out. By the late ‘70’s, we were swimming in debt making only minimum payments, when we could make payments.

We established a plan to eliminate that debt, used some scissors on our many, many credit cards keeping only two or three, one or two of which we really didn’t need, and within a few years were out of debt. Except for buying a new home in the 1990’s, we have been debt free ever since. Sure, we have bought new cars since our change, but they were planned in advance and paid for. We did pay some interest on that new house, but only for four or five years.

So it can be done, even in these tough times. It just requires planning and setting priorities and then not spending outside those conditions. If you’re in deep debt, it also takes a lot of work. That, my friends, is why I consistently cry here for our local, state and federal governments to adopt planning and priorities when setting their budgets each year. I’m not just blowing smoke in the wind. I’ve been right where these government entities are themselves right now if only on a personal level. Spending and debt can be brought under control, but it takes sacrifice and dedication to do it. I wish our governments had that sacrifice and dedication.

The credit card companies say less credit will be available if the new controls are set. That might not be a bad thing. I do have some advantage over many others, however. When I get my weekly notices of “changes in your credit card agreement” that always include higher rates and fees, I just chuckle. I don’t pay them.

It also appears to me, since I don’t pay interest and yet still get my rates raised, there is no correlation between interest and the users. Someone in those corporate offices has just decided to get more money out of users and, I believe, just arbitrarily raise those rates without too much consideration to the ability to pay.

The card companies make their own case for control.


No comments: