At work (a place I'm not at today because of "sickness", *cough*, ya right...oh oh, here we go again?...) I see the whole spectrum of different credit card accounts. Some in fine standing, with solid payment history, low balances and stable rating. Others are just the opposite, maxed out, lots of late payments and over limits and poor rating. And the whole gamut of those accounts in between.
In general, it usually follows that younger cardholders' accounts are more likely to be in disarray than older ones. It's simple financial wisdom. The older ones have lived through their own learning phase in dealing with credit card debt when they were younger and have applied what they've learned to their current practices.
It got me to thinking of my own relationship with banks, financial institutions and credit cards, and brought me back. Back to revisit a timeline of dramatic peaks and valleys of my own financial graph as I have lived and learned through the years:
1983: Applied for my first credit card. A department store credit card from the now-defunct Woonsocket retailer McCarthy's. I applied for this since I was advised it was easier to get department store cards as your first, then you could build credit to qualify for a VISA or MasterCard. McCarthy's rejected me due to a lack of credit (and probably low income). Though the rejection letter didn't say so, it probably didn't help that there was a recession going on at the time and that McCarthy's very existence was nearing its end.
1984: Once I got a full time job making a more decent income, I wanted to try again to enter the world of the credit worthy. This time I applied for a Sears card...and this time I was approved. It had like a $300 line of credit but I was ecstatic. I had the incorrect notion that I had just been given $300! I mean, I knew it wasn't a gift, that I had to repay it, but I went and bought a 14K gold necklace and a new 35mm camera almost right away. And all I had to do was maintain payments of about $10 a month to pay it back. Sweet! Little did I understand or care that I was paying nearly 22% in finance charges...it only cost $10 a month, dude!
1984: Now with one card in my wallet, I wanted more to join the family. I thought of that scene in "Trading Spaces" where Dan Ackroyd, playing a wealthy snob, shows Jamie Lee Curtis, who's playing a hooker, that he has clout. He lets his wallet open and out cascades an array of credit cards in a long plastic protector strip. "I have Carte Blanche, Diners Club, American Express, VISA, and a GOLD MasterCard...they don't just give these out to anyone, you know!" That's it...I wanted CLOUT! I re-applied to McCarthy's...and this time they approved me! Woo Hoo! I got two!
1985: A couple months after getting the McCarthy's card (and racking it up to it's limit) the credit monster in me needed more. I applied for VISA, MasterCard and American Express. The VISA and MasterCard were rejected, but after what seemed like a very long wait (probably about 2 weeks) I got an envelope in the mail from them. At first I thought "Well, if I was declined by VISA and MasterCard, surely American Express will deny me too so this must be the rejection letter." But I felt something stiff enclosed inside the envelope...could it be? Yes, it was a pretty green American Express card and it had a $750 line of credit!!!
Oh the party I threw for my friends that night! The rub, of course, was that charges couldn't revolve. It had to be paid in full each month. So while it was a beautiful status symbol I could flash around, I was cautious about using it.
1985: I caught on to the fact later in this year that an application for a VISA or MasterCard was not approved or rejected by VISA or MasterCard themselves, it was the bank which you applied for them. And my earlier attempts were through traditionally conservative local banks. I found out I'd have a better chance with one of the new banking concepts, a non-local bank which specialized in offering credit cards nationwide. So I applied to First Bank of Chicago from a application brochure they had placed in Caldor's at the check-out line. A week or two later, a pretty gold MasterCard was in my hands! Only a $500 limit, but within a year they had automatically raised it a couple of times so it was soon a $1500 limit card. Within a few months, I'd gotten 2 VISA cards to join my little plastic card menagerie I was building in my wallet.
1986: I had left my Wrentham job for a new prospect working with Linda in Pawtucket, but there was a delay in the job opening up for me when it first should have. So though I worked a few hours a week for Linda's parents at their sporting goods store in Taunton, I was having trouble making ends meet. Once the job started, I was earning money again, but it wasn't as high as I had gotten used to. To make matters worse, I moved to East Providence to be closer to my job in Pawtucket, but now I wanted to buy things for my new home. The cards shot up to their limit.
I was still holding on to paying them down despite the burden to my budget when my '81 Ford Escort caught on fire and I needed to quickly get a new car. In haste and ignorance, I signed a prohibitively costly lease on what turned out to be another lemon of a car and before long I was facing the abyss. One by one, my cards fell. I tried to bide time with them but eventually even the payment arrangements I'd made couldn't be honored. They all threatened me by mail and telephone, but they eventually wrote me off and the collection agencies tried to come after me but eventually they stopped writing and calling. Sears sued me and I swore to the court that I'd make payments under oath. Kept that up for a month or two, then sent nothing more. They left me alone after that.
Except for American Express. They held on to my account and wouldn't write it off as readily as the others. I had one guy who must have been assigned to my case who would call all hours of the day and night (this was before newer legislation forbidding this) and called me "less than a man" since I didn't pay my debt. I found out he was calling from a call center in New Jersey and when I told him I would drive down there and kick the shit out of him he taunted me and dared me to do it. Man, I came this close to doing it.
All in all, by the end of this year, I had no cards left, and my credit was in shambles.
1992: After some idiot smacked into my car when she ran through a stop sign, her lowlife husband talked her into suing me. Since I had no insurance, I had to show financial responsibility and place the amount of the lawsuit, some $6500, which, of course, I didn't have, into escrow until the trial. When I consulted with a lawyer, he offered me the only other option...declare bankruptcy. So I did. The suit was discharged in bankruptcy court along with all the credit card, utilities, defaulted checking accounts, bad check debts to merchants, skipped rents to landlords, broken car leases, etc., that I'd accumulated over the past few years. Only the defaulted federally-guaranteed student loans remained, as well as a couple of local municipal tax debts.
1993: Times were stabilizing by now and I tried to work towards re-establishing my post-bankruptcy credit. Since that bankruptcy was on my credit reports and wouldn't go away for another 6 years I knew my only option was to get a secured credit card. I set one up through an outfit called Signet Bank. They actually allowed a credit line at one and a half times your secured deposit, so it was a small amount of actual credit. I sent in $500 and my credit limit was $750. After a year of using the card and making timely payments, they eventually upgraded the card to a true credit card and I was returned the deposit amount. By this point I'd been sending in regular deposits to the secured savings for months and I was up to a $3000 line of credit. Soon thereafter, they changed their name from Signet to Capital One.
1997: After several years of excellent history with my one and only credit card, I had built it up to a $3500 credit line, but I had also built up the balance as well. It was teetering near the limit. After I quit my NRIARC job to move to Florida, I paid the card off with funds from my cashed out 403b retirement account. I still had some $2000 cash left from the 403b and when I moved to Florida, I was sittin' pretty with a clear credit card and two grand in the bank.
But the telemarketing job I had wasn't really to my liking. I tried looking for a replacement but unlike my preliminary scopes I'd done from RI before moving here, I found finding a good job at a decent pay very challenging. And, what's more, I fell into a vacation attitude. The hot summer weather and my robust savings and ample credit polluted my drive towards working. So I abused my job and hardly ever showed up. I would take months out, sucking back Coronas every day, work a couple days or so, and take another month off. Meanwhile I siphoned funds from savings and started to ring up charges to the credit card to meet everyday expenses. Soon big bills like rent and electric were coming from the credit and savings, not from my pitiful income.
1998: By the time the new year came around, I had already skipped out on one apartment and was on the verge of doing the same in my Altamonte roommate situation. I borrowed $350 from my sister but I used that for other expenses rather than the rent bill I said it was for. My Capital One card? Well it had finally gotten close to the limit around the time I met Justin and I racked it up past the limit, destroyed the card and pretended to myself that it never existed. By the time it would have gone to collections in early '98, I'd already moved 3 times and no longer had anything in my name. So I didn't have to hear from them. They couldn't find me.
2001: After I got back into management at DM and then later with Sears, I tried, yet again to get some credit cards back. Though no guarantee just because I worked for them, I tried Sears again. I figured they wouldn't since they'd actually taken me to court in the '80s, but they did! Albeit a tiny $200 LOC. I applied to a card issuer (Providian) notorious for granting cards at high interest rates and burdened with all sorts of "fees" to what would now be called the "sub-prime" market. People with poor or no credit. They approved me! Woo hoo, I was on my way back. This time, I told myself, I'll not fall into the same traps as before...I'll work very hard to keep my good credit. Before long I added another card to my wallet. Orchard Bank, another high-risk lender with exhorbinant rates and fees. Then another sub-prime lender, Direct Merchants Bank. This card had a pretty picture of a tropical beach on it, and what I thought was a whopping credit line of $5500!
I teared up a little when I received this since I knew it was yet another chance to do right and establish a good credit foundation so that I might eventually escape the endless cycle of high interest rates and diminished prospects for bigger credit opportunities so I might, one day, perhaps buy a home. Plus, it coincidentally was issued to me at a time when I might need a bit of financial help...I'd just gotten convicted of my second DUI.
Ric, who was also trying to rebuild his credit after prior problems, which, according to him, were no fault of his own, of course, had also gotten a card from Direct Merchants. His also had a beach scene on it. As we individually fell into our own separate financial quagmires throughout the next couple of years, we jokingly remarked how our "beaches" were becoming slowly but surely metaphorically polluted with increasing debt.
2003: By early 2003, with Koyaanisqatsi underway, the Providian and Sears cards had been trashed and the metaphorical pollution on my beach had become a full out major oil spill disaster. And I was the drunken ship captain who ran the doomed tanker aground. Now, when lumped together with the other debts incurred as a result of my post-DUI, post-Sears job, nearly homeless soon-to-be New Orleans wayfarer life, I was looking at over $30,000 in debt.
2007: With the worst of Koyaanisqatsi seemingly over, I tried, yet again, to get back some meager credit. And meager is what I got. I'm approved for another Orchard Bank card, but this time for a very conservative $300 line of credit. Then a Credit One Bank card with a $400 credit line.
The credit lines have risen slightly over the past couple of years and I don't have even one late payment between the two. But all those others linger still on my credit reports. Oh, Capital One eventually found me and sent me letters for a while, but since so much time had gone by since they went into default, they dropped off my credit report. Most of the others are set to drop off by year's end.
So by early 2010 I may be looking at a refreshed credit rating.
Time to start gathering the applications soon.
Ugh! When will I learn.
In general, it usually follows that younger cardholders' accounts are more likely to be in disarray than older ones. It's simple financial wisdom. The older ones have lived through their own learning phase in dealing with credit card debt when they were younger and have applied what they've learned to their current practices.
It got me to thinking of my own relationship with banks, financial institutions and credit cards, and brought me back. Back to revisit a timeline of dramatic peaks and valleys of my own financial graph as I have lived and learned through the years:
1983: Applied for my first credit card. A department store credit card from the now-defunct Woonsocket retailer McCarthy's. I applied for this since I was advised it was easier to get department store cards as your first, then you could build credit to qualify for a VISA or MasterCard. McCarthy's rejected me due to a lack of credit (and probably low income). Though the rejection letter didn't say so, it probably didn't help that there was a recession going on at the time and that McCarthy's very existence was nearing its end.
1984: Once I got a full time job making a more decent income, I wanted to try again to enter the world of the credit worthy. This time I applied for a Sears card...and this time I was approved. It had like a $300 line of credit but I was ecstatic. I had the incorrect notion that I had just been given $300! I mean, I knew it wasn't a gift, that I had to repay it, but I went and bought a 14K gold necklace and a new 35mm camera almost right away. And all I had to do was maintain payments of about $10 a month to pay it back. Sweet! Little did I understand or care that I was paying nearly 22% in finance charges...it only cost $10 a month, dude!
1984: Now with one card in my wallet, I wanted more to join the family. I thought of that scene in "Trading Spaces" where Dan Ackroyd, playing a wealthy snob, shows Jamie Lee Curtis, who's playing a hooker, that he has clout. He lets his wallet open and out cascades an array of credit cards in a long plastic protector strip. "I have Carte Blanche, Diners Club, American Express, VISA, and a GOLD MasterCard...they don't just give these out to anyone, you know!" That's it...I wanted CLOUT! I re-applied to McCarthy's...and this time they approved me! Woo Hoo! I got two!
1985: A couple months after getting the McCarthy's card (and racking it up to it's limit) the credit monster in me needed more. I applied for VISA, MasterCard and American Express. The VISA and MasterCard were rejected, but after what seemed like a very long wait (probably about 2 weeks) I got an envelope in the mail from them. At first I thought "Well, if I was declined by VISA and MasterCard, surely American Express will deny me too so this must be the rejection letter." But I felt something stiff enclosed inside the envelope...could it be? Yes, it was a pretty green American Express card and it had a $750 line of credit!!!
Oh the party I threw for my friends that night! The rub, of course, was that charges couldn't revolve. It had to be paid in full each month. So while it was a beautiful status symbol I could flash around, I was cautious about using it.
1985: I caught on to the fact later in this year that an application for a VISA or MasterCard was not approved or rejected by VISA or MasterCard themselves, it was the bank which you applied for them. And my earlier attempts were through traditionally conservative local banks. I found out I'd have a better chance with one of the new banking concepts, a non-local bank which specialized in offering credit cards nationwide. So I applied to First Bank of Chicago from a application brochure they had placed in Caldor's at the check-out line. A week or two later, a pretty gold MasterCard was in my hands! Only a $500 limit, but within a year they had automatically raised it a couple of times so it was soon a $1500 limit card. Within a few months, I'd gotten 2 VISA cards to join my little plastic card menagerie I was building in my wallet.
1986: I had left my Wrentham job for a new prospect working with Linda in Pawtucket, but there was a delay in the job opening up for me when it first should have. So though I worked a few hours a week for Linda's parents at their sporting goods store in Taunton, I was having trouble making ends meet. Once the job started, I was earning money again, but it wasn't as high as I had gotten used to. To make matters worse, I moved to East Providence to be closer to my job in Pawtucket, but now I wanted to buy things for my new home. The cards shot up to their limit.
I was still holding on to paying them down despite the burden to my budget when my '81 Ford Escort caught on fire and I needed to quickly get a new car. In haste and ignorance, I signed a prohibitively costly lease on what turned out to be another lemon of a car and before long I was facing the abyss. One by one, my cards fell. I tried to bide time with them but eventually even the payment arrangements I'd made couldn't be honored. They all threatened me by mail and telephone, but they eventually wrote me off and the collection agencies tried to come after me but eventually they stopped writing and calling. Sears sued me and I swore to the court that I'd make payments under oath. Kept that up for a month or two, then sent nothing more. They left me alone after that.
Except for American Express. They held on to my account and wouldn't write it off as readily as the others. I had one guy who must have been assigned to my case who would call all hours of the day and night (this was before newer legislation forbidding this) and called me "less than a man" since I didn't pay my debt. I found out he was calling from a call center in New Jersey and when I told him I would drive down there and kick the shit out of him he taunted me and dared me to do it. Man, I came this close to doing it.
All in all, by the end of this year, I had no cards left, and my credit was in shambles.
1992: After some idiot smacked into my car when she ran through a stop sign, her lowlife husband talked her into suing me. Since I had no insurance, I had to show financial responsibility and place the amount of the lawsuit, some $6500, which, of course, I didn't have, into escrow until the trial. When I consulted with a lawyer, he offered me the only other option...declare bankruptcy. So I did. The suit was discharged in bankruptcy court along with all the credit card, utilities, defaulted checking accounts, bad check debts to merchants, skipped rents to landlords, broken car leases, etc., that I'd accumulated over the past few years. Only the defaulted federally-guaranteed student loans remained, as well as a couple of local municipal tax debts.
1993: Times were stabilizing by now and I tried to work towards re-establishing my post-bankruptcy credit. Since that bankruptcy was on my credit reports and wouldn't go away for another 6 years I knew my only option was to get a secured credit card. I set one up through an outfit called Signet Bank. They actually allowed a credit line at one and a half times your secured deposit, so it was a small amount of actual credit. I sent in $500 and my credit limit was $750. After a year of using the card and making timely payments, they eventually upgraded the card to a true credit card and I was returned the deposit amount. By this point I'd been sending in regular deposits to the secured savings for months and I was up to a $3000 line of credit. Soon thereafter, they changed their name from Signet to Capital One.
1997: After several years of excellent history with my one and only credit card, I had built it up to a $3500 credit line, but I had also built up the balance as well. It was teetering near the limit. After I quit my NRIARC job to move to Florida, I paid the card off with funds from my cashed out 403b retirement account. I still had some $2000 cash left from the 403b and when I moved to Florida, I was sittin' pretty with a clear credit card and two grand in the bank.
But the telemarketing job I had wasn't really to my liking. I tried looking for a replacement but unlike my preliminary scopes I'd done from RI before moving here, I found finding a good job at a decent pay very challenging. And, what's more, I fell into a vacation attitude. The hot summer weather and my robust savings and ample credit polluted my drive towards working. So I abused my job and hardly ever showed up. I would take months out, sucking back Coronas every day, work a couple days or so, and take another month off. Meanwhile I siphoned funds from savings and started to ring up charges to the credit card to meet everyday expenses. Soon big bills like rent and electric were coming from the credit and savings, not from my pitiful income.
1998: By the time the new year came around, I had already skipped out on one apartment and was on the verge of doing the same in my Altamonte roommate situation. I borrowed $350 from my sister but I used that for other expenses rather than the rent bill I said it was for. My Capital One card? Well it had finally gotten close to the limit around the time I met Justin and I racked it up past the limit, destroyed the card and pretended to myself that it never existed. By the time it would have gone to collections in early '98, I'd already moved 3 times and no longer had anything in my name. So I didn't have to hear from them. They couldn't find me.
2001: After I got back into management at DM and then later with Sears, I tried, yet again to get some credit cards back. Though no guarantee just because I worked for them, I tried Sears again. I figured they wouldn't since they'd actually taken me to court in the '80s, but they did! Albeit a tiny $200 LOC. I applied to a card issuer (Providian) notorious for granting cards at high interest rates and burdened with all sorts of "fees" to what would now be called the "sub-prime" market. People with poor or no credit. They approved me! Woo hoo, I was on my way back. This time, I told myself, I'll not fall into the same traps as before...I'll work very hard to keep my good credit. Before long I added another card to my wallet. Orchard Bank, another high-risk lender with exhorbinant rates and fees. Then another sub-prime lender, Direct Merchants Bank. This card had a pretty picture of a tropical beach on it, and what I thought was a whopping credit line of $5500!
I teared up a little when I received this since I knew it was yet another chance to do right and establish a good credit foundation so that I might eventually escape the endless cycle of high interest rates and diminished prospects for bigger credit opportunities so I might, one day, perhaps buy a home. Plus, it coincidentally was issued to me at a time when I might need a bit of financial help...I'd just gotten convicted of my second DUI.
Ric, who was also trying to rebuild his credit after prior problems, which, according to him, were no fault of his own, of course, had also gotten a card from Direct Merchants. His also had a beach scene on it. As we individually fell into our own separate financial quagmires throughout the next couple of years, we jokingly remarked how our "beaches" were becoming slowly but surely metaphorically polluted with increasing debt.
2003: By early 2003, with Koyaanisqatsi underway, the Providian and Sears cards had been trashed and the metaphorical pollution on my beach had become a full out major oil spill disaster. And I was the drunken ship captain who ran the doomed tanker aground. Now, when lumped together with the other debts incurred as a result of my post-DUI, post-Sears job, nearly homeless soon-to-be New Orleans wayfarer life, I was looking at over $30,000 in debt.
2007: With the worst of Koyaanisqatsi seemingly over, I tried, yet again, to get back some meager credit. And meager is what I got. I'm approved for another Orchard Bank card, but this time for a very conservative $300 line of credit. Then a Credit One Bank card with a $400 credit line.
The credit lines have risen slightly over the past couple of years and I don't have even one late payment between the two. But all those others linger still on my credit reports. Oh, Capital One eventually found me and sent me letters for a while, but since so much time had gone by since they went into default, they dropped off my credit report. Most of the others are set to drop off by year's end.
So by early 2010 I may be looking at a refreshed credit rating.
Time to start gathering the applications soon.
Ugh! When will I learn.