It all started out with the credit cards. You know, we’d want to take a trip somewhere – so we’d whip out the cards. We’d want to buy something – so we charged it. It was easy money, just swipe and pay later. We never much thought about how those bills were racking up every month. Out of sight – out of mind!

Of course now I know better. The credit card companies have one motive in mind – to make money. They can only make money when people like you and me are paying interest on the balance they owe. Now I am sure you’ve heard it a thousand times – but you should always pay off your balance on your cards every month. It’s good advice and really the only way you should every use your card. However, like most people, we just never seemed to think about tomorrow and just kept spending for today. After all, the more we spent, the more they gave us to spend!

0% interest and a $3,000 credit limit soon became $7,500 and then $15,000. After all, it was free money at 0% — we just didn’t realize how much that free was going to cost us! And it wasn’t just one card either – all of our cards were raising our limits. The offers kept pouring in. It seemed not a week would go by without 4-5 credit card offers arriving in the mailbox!

Then one month my wife forgot to mail in a payment on time. You see, we had some unexpected home repairs that month and weren’t quite prepared for them. So the payment was 5 days late. That 5 days was all the credit card companies needed to unleash their worst. They smelled money and they came running after it.

Credit card companies nowadays use a lot of tactics to look for weak spots and then pounce. They are all friendly and nice up front until you get a good, hefty balance built up. Then they know they have you and start unleashing all the fees. That 5 day late fee sent us from 0% to 19% interest on one card! The next month, three other cards raised our interest rates to almost the same amount. We’d never been a minute late with a payment and they still raised it! When we called to complain they said something about universal default and how it didn’t matter that we weren’t late with them that we were late with one bill and so they had the right to raise our rate “at any time, for any reason”.

Of course, now we were in a pickle. The interest rates alone were adding hundreds of dollars a month to our balances! The credit card companies had us where they wanted us….

Related posts:

1. Tom’s third post: Ever-rising interest rates!
2. Tom’s Final post: A Dollar Here, A Dollar There…
3. Tom’s first post – Getting Started
4. Free Credit Reports – Post-FTC Crackdown
5. Guest Post from Wide Open Wallet