Grimag

  • Ask a Yeti Archivessee the archives
  • Advice Forumsask a yeti forums
    • Faith
    • Financial
    • Lifestyle
    • Love and Relationships
    • Society
    • Sex
    • School Dayz
    • Would You Rather
  • About A Yetithey do exist
  • Ask A Questiongot a question?

College Credit Crunch

Dear Yeti,
I am just about to graduate from college with a degree in finance from Grand Junction Co. I grew up in my mom's house. She was a single parent and a teacher. Paying for school was difficult. She did all she can to help me through school but I have mostly been on my own since I started school.

In the past 5 years I have amassed a huge amount of credit card debt ever since the first day of my sophomore year when I signed up for a credit card just to get a free t-shirt. Over the last few summers I went and traveled a lot and bought a few too many things. I admit was totally careless with in spending habbits. My balance keeps growing, and my interest is almost $1,500 a year. I feel now that I will never be able to pay it off, plus I want to get married to my girlfriend of two years and she has no Idea what I've gotten myself into.?What should I do?

Sincerely,
JD

Dear JD,
A degree in finance, really? You’re crazy for going into debt this badly at such a young age. I calculate based on your annual interest (I assume that your APR is extra sucky, between 15%-20%) which puts the over/under of your debt at around $7,000.

Actually, I am being way too rough on you. This problem is really common. There are more and more predatory lenders on college campuses every day. It’s not fair for foolish college students freshly out on their own to be subjected to this temptation. These credit card companies are like wolves to a carcass. Ten years ago you could count on there being several reasonable loan options in college communities but today you really need to read the fine print.

Tell your girlfriend/soon to be fiance before this goes on any further. You know this is the right thing to do and I don’t have to tell you this. Keep in mind she’s going to find out sooner or later. If you tell her right now she may be more understanding when all your credit checks come back denied on your first apartment and when she sees how small her engagement ring is. Oh, and the real stinger is that she will be marrying you and your debt.

There are a lot of companies right now prepared to loan any and all college students thousands of dollars to spend frivolously. It is their business to get you to borrow money that you can’t pay back immediately. They know this and you don’t. It’s called predatory lending and it should be illegal but it’s not.

It’s the irony of your finance degree that really bothers me about your situation. The solution is obvious: pay it back. Set a goal. Making that minimum payment will not do it. In how many months do you want to pay back this debt? I think between 12 and 18 months is reasonable. Do the math what do you have left in your budget after: taxes, rent, car payments, insurance, and living expenses? Something like $150 a month probably. That’s not enough to pay it back in a reasonable amount of time: translation “night/weekend job.” Also be creative. Do you know what nickname credit card companies have for people who do pay on time? They call them “dead beats” because they loan them money and never turn a profit. This means that you are a valued customer to their business. Now look at your history with them. Your opening APR was probably something like 9% which jumped up to something like 19% after you missed your first payment. This should also be illegal but the APR is at their discretion. Try calling them up on the phone and demanding as a valued customer that they back off their APR percentage. I’ve heard of this working and it couldn’t hurt.

Someday as a financial advisor (if you are lucky enough) you’ll be in charge of millions of dollars of other people’s money. Experiences like credit card debt help develop a stronger sense of responsibility with other people’s money. Growing up lower middle class in the United States and exposure to clothing, cars, and lifestyles that are just out of your reach can put young adults in situations like this. Work hard; learn your lesson and we won’t read about you being publicly lynched like all these financial advisors in the news every month. It’s this responsibility that they might have learned if they had to endure the humility and agony of getting into Citibank for $5,000 worth of fast food, cd’s and spring break vacations. With this in your rear-view mirror you’ll have a better understanding about the value of a dollar and your clients will thank you for it.

A Yeti

Oct 4, 2014A Yeti
An Equation for ProcrastinationThe Spanish Ginger
You Might Also Like
 
The Road Not Taken
 
Handsome Andy

Leave a Reply Cancel reply

Comments: 2
  1. karen
    2 years ago

    First cut up all your credit cards and get no more such cards. Next tell your girlfriend the truth and do not decieve her in anyway about this. Finnaly get in touch with a good debt consolidation firm and religiously do what you have to do(not what you want to do, which got you into this mess) to set your financial life right. There is a reason why credit cards are called “get into debt quick cards”. However when used correctly ( to establish a good and solid credit record) they are a valuable tool. Good luck to you and I hope you will be honest with said girlfriend and that you will never repeat this mistake again. College had to of taught better then this…. I would hope.

    ReplyCancel
  2. alex
    2 years ago

    claim bankruptcy you will have no credit for 7 years but then ur good and besides you shouldnt need it especially if you havent learned to handle it. That will teach you a lesson by the way i claimed bankruptcy of 115 000 and the banks cleared it. no wonder americas bankrupt lol

    ReplyCancel
A Yeti
A Yeti
Quote2 years ago 2 Comments Financial, Society206
0
GooglePlus
0
Facebook
0
Twitter
0
Digg
0
Delicious
0
Stumbleupon
0
Linkedin
0
Pinterest
Recent Posts
  • Fresh Out…of old boyfriends
  • The Mysterious Female O
  • The Road Not Taken
  • I Think I’m In Love With My Boss
  • Daddy Swap
Recent Comments
  • Raphealpeters on Daddy Swap
  • Raphealpeters on Daddy Swap
  • jack on Daddy Swap
  • Adarsh krishnan on Boy Crazy!!!
  • Speak-up on The Mysterious Female O
Categories
  • Faith
  • Financial
  • Lifestyle
  • Love and Relationships
  • School Dayz
  • Sex
  • Society
Footer Sidebar 1

Drop a widget on "Footer Sidebar 1" sidebar at Appearance > Widgets page.

Footer Sidebar 2

Drop a widget on "Footer Sidebar 2" sidebar at Appearance > Widgets page.

Categories
  • Faith
  • Financial
  • Lifestyle
  • Love and Relationships
  • School Dayz
  • Sex
  • Society
Footer Sidebar 4

Drop a widget on "Footer Sidebar 4" sidebar at Appearance > Widgets page.

2015 © Ask A Yeti