New Capital One Credit Card
It may seem odd that I am excited about having a new credit card, especially since one of the themes of this blog is debt-reduction. But let me explain my situation. When I was younger I managed to rack up quite a sizable sum in credit card debt due to my using my credit card for food and books (more than a little of each) while I was in college. Fast forward a while and I was having a hard time keeping up with the payments, and my credit rating tanked. I managed to pay off one of my credit cards, a Chase Visa with a $2,000 balance. I was so behind on the payments, though, that the account was closed by Chase.
Similar story with my Citibank MasterCard with a $5,000 balance, except that I had gone over the credit limit; the combination of over-limit fees and late fees managed to drive up the balance to nearly $8,000. Fast forward again: I called Citibank and asked if they could set me up on a payment plan, despite the fact that they, too, had closed my account for delinquency. They set me up on an awesome payment plan with absolutely zero interest. As long as I made the required automatic payments, the account would be paid off in five years. That was over a year and a half ago, and my balance has been dwindling steadily since!
Unfortunately the two closed accounts had left me without a major credit card, which I do like to have for emergencies (no fast food and no Amazon.com!). Getting to the present, I noticed that Capital One had been sending me credit card offers in the mail again for quite some time. It occurred to me that my year of on-time payments had probably raised my credit score a bit, so I decided to fill out an online application for a Capital One card, fully expecting for the application to be declined. Imagine my surprise yesterday, then, when I got an approval notice and a new MasterCard in the mail with a $2,500 limit!
Now fortunately my credit sensibilities have progressed since my first credit go-around, so I am not worried about repeating the past with this new card. It is comforting to know that I have at least some credit in case of an emergency, and a chance to build my credit history somewhat anew after my previous credit fiasco. I had my $350 Sears credit card balance (with a nearly 30% interest rate! eek!) transferred to the new card, which has its interest waived until October. So hopefully I will be able to get that balance paid off before October. I am contemplating doing the credit card freeze that my wife has done in the past, just to be on the safe side. (See an an example of this technique over at Dual Income No Kids.)
On a tangential note, I think it is just criminal how credit card companies prey on college students in their late teens and early twenties. Don't misunderstand me, I am a humongous fan of personal responsibility when it comes to life decisions, but at that age the majority of college students have no idea how much trouble they are likely to get into just from being their age. And by the time they do realize the error of their ways, it is probably too late and they will have some serious credit repair work to do. I'm not sure I have a good solution to this problem, but the contributing factors are pretty easy to isolate: credit card companies with questionable business ethics, the colleges for permitting these credit card companies to proselytize their students, public schools for failing to promote a sound financial education as part of high-school curriculum, and parents for not smacking down their kids' lofty credit ambitions the second they find out about them! Yes, the kids are adults at that point, but they are really just not ready to handle the responsibility of a Platinum credit card at nineteen years old, adults or not.
By the way, I made sure to choose the Capital One card without a fancy photographic background image (a seductively tantalizing and deceptive sales technique on Capital One's part), so I won't be tempted to whip out my card to show off a cutesy logo and subsequently use the card unnecessarily. While the card backgrounds that were available were actually quite aesthetic, this is nothing other than a blatant attempt to sucker someone into using credit based on cuteness and vanity (e.g. "choose the card that reflects your unique personality") Oh, puh-leeeaaase! When did we all lose our sense of individuality, such that we need personalized credit cards to validate our uniqueness? People who fall for this obviously did not watch the movie Fight Club. We may not need "Project Mayhem," but I wouldn't mind slightly more ethical business practices on the part of credit card companies. If you have not seen this film, then this is your SeeMeGetRich.com homework assignment for the weekend. There will be a quiz on Monday.
