I first heard of 0 interest credit cards a while ago and when I did I knew there must be more to the story. I mean, why would a credit card company offer that to you, it was like a free loan for months at a time. You know financial companies have to make money on their products or it is of no advantage to them.  I did go ahead and get a 0 interest credit card, and at first tried to exercise restraint, but knowing the interest rate was too much temptation and soon I was using it for practically everything. I bought spectacular vacations, airline flights, electronics, my new set of drums, just thinking in the back of my head I’d pay it back later.

At the time I was 18 years old and playing in a punk band, and I was thinking I could pay it all back later. I was naive, but what fun those days were. We traveled all around the country, paying for our hotels and our bands livings expenses using our 0 interest credit cards for years, thinking we were about to make it big.  Many people get caught in this problem borrowing now because you think it will be easier to pay it back in the future when some event occurs such as making more money, getting a new job, moving to a smaller house.   Meanwhile, until our irresponsible thinking and spending caught up with us, we played shows from Berlin to Los Angeles, from Tokyo to Belgium, but in reality, we weren’t making very much money – just barely above break even, actually we only did it for the love of the music and the good times.

By the time we went home, I had accumulated so much debt that I was on the verge of getting my home repossessed for delinquent late credit card payments. By that point it was scary and it wasn’t a 0 interest credit card anymore! After you start missing payments and paying late an actual rate of interest pre determined in the credit card contract kicks in and it is usually not a low one!  I almost had to file for personal bankruptcy, and as it was, a lengthy legal battle ensued with the company. Fortunately, my friends in the band help to bail me out, helping to pay for part of my debt so that I could get it taken care of, get back on my feet and get back on the road for our fall rock tour. After that, however, I had to live differently and make financial changes. No more staying at the expensive plaza hotels with room service every night and expensive gifts for friends.

From that point on, I was living responsibly and within my financial means. I’d stay at cheaper budget hotels, and spend less. After our nightly shows, we wouldn’t even drink the customary bottle of $175 champagne at all. All of us were feeling the burn of our success in our pockets. Sure we had groupies and fans, but we had fallen deeply into financial and credit card debt and besides, our music life style was ruining our health too. I learned a great lesson about financial responsibility and what it really takes to live within your means and the expensive consequences it can cost in the long run.  So before you sign up for the next credit card offer in the mail think about if you really need it.  What will you use it for  and if it is really necessary but most importantly do you have a concrete plan today on how you will pay it back and not a future pipe dream of hope that may never mature and put you in a much worse position financially.

This entry was posted on Thursday, November 5th, 2009 at 2:17 pm and is filed under Credit Repair. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.