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This is the blog of Ian Rosales Casocot. Filipino writer. Sometime academic. Former backpacker. Twink bait. Hamster lover.

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Wednesday, October 13, 2021

entry arrow5:14 PM | Freedom From Credit Card Debt

I know how it started, and I also know that it started around 15 years ago, or thereabouts. I can’t exactly remember the year anymore, but I know that before this happened, I was always on top of my finances. I was a young professional with a vision of myself as someone who would be responsible with his financial situation. [Ha! Adulting soon teaches you otherwise.]

I got a credit card because it was part of my employment perks, and I thought I could use it to pay for things purchased online [like Amazon], to use as the payment base for subscriptions, and to use for emergency purchases like plane tickets. And I always paid on time, and generally managed everything in a golden way.

And then one day, on an April day near the beginning of the month, I learned that I had to pay extra taxes for income I apparently earned outside of my regular work the previous year—something I could not even remember receiving. And the amount was huge, like nearly P10,000. That gobsmacked me. It just so happened that I had enough on hand to pay that tax—but once I paid it, I had nothing left to sustain myself in terms of food and other everyday essentials. So I went ahead and filed my taxes, and I decided to use my credit card for those everyday essentials for the rest of the month. [In hindsight, I should have probably borrowed the sum I needed from my family—but I’m always independent-minded, and I never honestly thought of this as a solution.] At that time, only fancy restaurants in Dumaguete accepted credit cards, and so I ate in fancy restaurants the entire month. And when the credit card bill came the following month, it was more than I could pay given my salary, so I opted to pay the minimum.

I have been paying that minimum, or often a bit more, every month for 15 years.

And of course, when you do that, you’re only digging yourself into a bigger hole because the bank charges you for what it calls “finance charges” [the interest incurred for not paying the exact amount], and that amount is often exorbitant and only adds to the overall sum you need to pay back. So what was a small debt 15 years ago ballooned into a huge debt over the years. Often there seemed to be no way out, unless I won the lottery. Sometimes though I’d get awards for my writing, and I’d use a fraction of these to cover a huge part of the debt—but the enormity of the debt only grew back in time. The only real solution was to pay everything in whole to stop the never-ending finance charges.

Then, of course, there were unforeseen expenses [plane tickets, hotels, etc.] I had to charge to my credit card, which only added to the exorbitant sum. And sometimes, there were months where I’d forget about the due date—which resulted to exorbitant penalty fees. [This is how banks make money from credit cards.]

I need to admit that there were times I could have paid the entire thing at once because I got some generous award or other. But when those happened, I made the bad decision of only covering a part of the debt so that I could use a bit of my awards money for myself.

This year I told myself that I needed to solve my credit card situation once and for all.

And today, I finally did. I earned a substantial amount for writing work I did this year and I plunked down a small fortune to fully cover all of my credit card debt, and be free of this albatross around my neck once and for all.

It took two banking days to finish this. But when I came out of the bank today, I cried.

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