Way too much

Posted on September 2, 2007 in the Debt Elimination category

I remember in college when I got my first credit card - all I had to do was fill out an application (took 2 minutes) and send it in. I wasn’t expecting to get accepted - but I thought it was worth the try in order to get my credit history started. Heck, I didn’t even have an income - I was a college student after all. Short story is that I was accepted, got the card, quickly went over limit (thank you Daytona Spring Break 1999), and wound up with poor credit.

Fast forward to 2004 - Now married, my wife and I have great credit (after cleaning up mine) and are rapidly accruing multiple credit cards. We are being smart about it and not carrying a balance (not really using them at all). Then the bank loans us money for a house. Things go great for a while - then I get the bright idea to quit my job and work at home (just in time for our first child). Out come the credit cards . . . just for a while, until the business takes up the slack.

Well the business wasn’t taking up the slack and I (mistakenly) determined that I needed to look into personal loans so I can advertise the business. I knew our current financial situation and although we had good credit still (nothing was behind), our debt to income ratio was abysmal. To my amazement, we were approved overnight for a several thousand dollar loan. It mostly went to business advertising and supplies - which yielded zero dollars in return (I knew nothing about marketing at the time).

Now it’s present day - we are ridiculously in debt and have horrible credit. What is annoying is that I have nothing cool to show for it - after all, its not like we went out and bought all kinds of expensive electronics, clothes, etc. We just made poor decisions. We are looking into debt consolidation to take some of the pressure off but with our credit rating and my pitiful income we have been turned down several times.

Looking back on things, it amazes me how easy it was to get ourselves into this pit. The ease with which we were able to acquire massive lines of credit is astonishing. Do I blame anyone but ourselves? Absolutely not. While it was easy to obtain the loans and credit cards, we signed the papers with full disclosure of what we were getting into. The creditors were merely providing a service that we were looking for. We were the ones that made bad decisions and the creditors were getting a return on their money in proportion to the risk that they were taking on.

Would I do things differently if given a chance? Definitely. But were are in a hole now and all I need to focus on is getting out.