Yet Another Way Credit Cards are Dangerous
- Posted by JvW on September 1st, 2009 filed in Credit Card, Debt
As I have mentioned before, we took on a personal loan at the close of my husband’s business that was our portion of the total debt. At the time, we had just finished paying off our credit card debt and did not have the cash to pay off the loan. So we did the only thing we could – we borrowed money to cover it. The way we borrowed the money is by taking advantage of a 0% offer with one of our credit cards.
We did have to pay a transfer fee to take out the money, but it was not that bad. The problem arose last month, when I made an error in payment. I paid the minimum monthly payment on time, and then less than a week later, paid a lump sum of $1800. Since I paid so much, I assumed that my payment for August was more than covered.
You know what they say about people who assume things, right?
To make a long story short, the $1800 payment was in the same statement as the minimum payment and did not count towards August. I learned this when I logged into my account 1 day after the payment was due. Despite my best efforts, and a phone call to the credit card, a $39 late fee was charged, along with $32 of interest.
Needless to say, this is all my fault for making the error, but what strikes me the most is that I never want to be in this situation again. I don’t want to borrow money, especially from credit cards, even at 0%. I’m actually excited to have this incident that renewed my dedication to building savings and eliminating debt.
The timing was fantastic, though, because I just received a quarterly bonus that allows me to ELIMINATE the business loan! I am psyched to finally have this monkey off our backs and be rid of it once and for all. The closing of my husband’s business has stalled our financial plans for 2009 and I am so relieved to finally be able to get back on track.
September 1st, 2009 at 6:53 pm
Wow, that bonus came in at a good time. Congrats!
I dislike when i get off track. So, I know how you feel. And it’s such a nice feeling to be back on track. Job well done!
September 2nd, 2009 at 12:36 am
Congrats on the bonus…yes, it definitely takes something like this to happen to trigger the resolve to end credit card use once and for all. I MUST do that with my AMEX blue card, but I got sucked in for the cash back rewards. The problem is that I use the card too much!
September 4th, 2009 at 6:02 am
Wow, that sounds about right for a credit card company. I’ve got mine set to automatically deduct the minimum payment from my checking account. Then, if I want to pay more I can, but I don’t have to worry about missing a deadline. Glad that it got you motivated, sometimes things like that can end up being the best thing to happen! Good luck!
September 6th, 2009 at 1:28 am
I had something similar happen on my Crapital One card. It’s the only credit card debt I have and I’ve been working feverishly to pay down the rest of the balance before I get married. It’s at 0% interest until April of next year but since I’m getting married in December I’ve been throwing every bit of cash at it I can. As a result, I’ve been making my monthly payment plus extra payments. Well, last month I made several BIG payments and assumed I was covered. I just happened to log in and notice that I had a minimum payment due. Luckily I was able to throw something at it and narrowly avoid a late fee and interest. Still, just peeves me to no end.
September 9th, 2009 at 3:29 am
MF - Thank you!
Sharon - I, too, use a credit card for everyday expenses for the rewards. That one I am WAY more diligent about, though!
Hustler - I like the auto-debit idea. Why didn’t I think of that?
Leigh - Crapital One! I love it! Glad you were able to avoid the late fee & good luck with paying it off!