The Pros & Cons of Credit Cards: One Man's Experience

Some time in the late 1980s I got my first credit card from Firestone. I took out the card to pay for costly auto repairs, tires, etc in instances where I could not pony up the entire bill all at once.

Within 2-3 years I had credit cards from Dillards department store and a couple of others. Then came the biggest financial mistake I've ever made, taking out a Discover card at around a 24% interest rate.

The first few years, I was able to make my payments on time for the most part without exorbitant late fees and such and the high interest rate didn't seem so bad.

At some point, the Discover card and other credit cards became a crutch to purchase not only needed auto repairs and such but also golf equipment and other non-necessities.

Before too many years had passed, Discover and other cards were maxed out and it became hard to make more than the minimum monthly payments. As the credit card balances continued to rise, at one point overtime income that I had counted on to make the payments decreased.

I was already sinking deeper into debt when I married my wife in 2004. By then, much damage had been done.

My wife and I refinanced our home to pay for needed renovations, mainly new siding and windows. By that point my credit rating had slipped and I got talked into an adjustable rate mortgage to finance the home improvements. Big mistake.

The siding people pooh-poohed the possibility of the interest rate rising, which, of course it did, as the booming economy of the 1990s turned into the Bush bust of the new millenium. Our house payment rose $180 a month as my income was going in the opposite direction.

By 2007, I had creditors, or predators as I call them, hounding my every move, calling constantly demanding their money. I had a lawsuit filed on a credit card balance which I could not pay.

I had tried everything I could think of to avoid filing for bankruptcy, including signing on with a debt management program. That was another mistake, as the company did not seem able to get the creditors off my back and I'm not even sure his company was even paying on all the cards.

I could have filed for bankruptcy prior to the change in the bankruptcy law in 2005, I suppose, but didn't due to the stigma of filing for bankruptcy. Thus, I got stuck with the changes in the law signed by President George W. Bush after being passed by the U.S. Congress.

Due to the transgressions of those who would run up credit card balances knowing they were going to file, stealing in my book, after the new law went into effect, everyone filing for bankruptcy must "pay through the nose."

After consulting an attorney, I found our income was too high to file Chapter 7, so the only way out of this mountain of debt was a Chapter 13, in which all the money must be repaid minus the outrageous interest rates.

To sum it up, while the credit card companies did not force me to take their cards or incur sometimes frivolous expenses, like drug dealers giving away their product to get consumers hooked, the credit card companies extend special rates and offers to get consumers to take their card.

To me, the only advantage to having any credit card is to raise one's credit score to buy a home or one must have a credit card to rent a car in most cases. For someone who travels much that makes having a credit card necessary.

Okay, there is one more advantage. That is if a credit card is lost or stolen it can be cancelled, whereas if you lose or have cash stolen, you're just out of luck.

The main disadvantage of credit cards is that they just make overspending way too easy and convenient. In spite of the warm and fuzzy ads for Visa, Mastercard and others, one late payment and that low introductory rate can skyrocket.

Did you know that one credit card can raise your rate even if you've never been late or over your balance if you've been late with another credit cards' payment? Big con there.

Other reasons for not having credit cards is having too much credit can hurt your credit score. The fine print in those credit card agreements include legalese about rate hikes for no reason.

The only lasting pleasure I got from my credit cards was when I cut them into pieces with scissors and cancelled all my cards before I filed a Chapter 13 bankruptcy.

I have one more year before my entire debt is paid and I will never make the same mistakes again. I will have ONE secured credit card and that's it when my bankpruptcy is paid off.

Having no credit card balances and the hassles associated with credit cards: Priceless. I have learned a valuable lesson from my credit card experiences that will stay with me as long as I live.

I don't hold the credit card companies completely responsible for my situation, but credit cards are enablers for consumers to overspend. Credit card companies have bought and paid for numerous politicians on both sides of the aisle in Congress which explains the draconian Bankruptcy law enacted in 2005.

However, for the most part my situation was akin to the Led Zeppelin song "Nobody's fault but mine." Here's to hoping you can learn from my mistakes. I know I have.