Posted by: Mike Ferruggia | December 3, 2009

Credit Card Debt

There needs to be a revolution in this country, even if it’s a personal revolution. We have become a society that was encouraged to save to a society encouraged and entrapped in debt. There is no question that banks and credit card companies are greedy evil entities who charge usurous interest and fees. This is not a statement against capitalism or making money. There’s nothing wrong with a bank lending you money at a reasonable rate. But there are no laws to govern how much they charge, and it’s obvious at least to me that 19.99 percent, or 29.99 per cent ought to be against the law, not to mention the late fees and charges they want you to incur so they can get that much more out of you.

Without a law to cap the rates they charge us, there really is no other recourse but to do all we can to extricate ourselves rom debt, pay it off, and stop using it. I personally am still in debt, and like the idea of having the few thousand dollars available credit for an emergency, but I also need to do all I can to pay it down and out and get rid of it.

It’s an insidious part of our economy and I think it is naive to think or to place the blame on people like myself who end up in debt. People are targeted and moved like sheep into the system and then like an animal in the woods, you find yourself in a steel trap. So, we all need to wake up. Here’s a video I caught today on youtube of a young woman with a conscience.



  1. Posted by: triptopine | May 9, 2010 (edit)
    How credit card debt sucked the life out of my lifeWhy am I ranting about credit card debt on my music blog?
    Because too many of us musicians and artist-types have used a credit card to buy a guitar. Or an amp. Or groceries. And too many of us have been burned.

    Case in point: I was once foolish enough to buy a guitar amp with a credit card. (I get extra bonus stupid points for doing this at a pawn shop.) Of course I couldn’t afford to buy the amp. (Roland Jazz Chorus 77. Mint.) I was a starving college student. I was also 19 or 20 years old, and I’d recently received five or six credit card applications in the mail. I thought this was FREE MONEY! Being young and ignorant, I responded accordingly, applying for every card I could get my hands on. And every card I received felt like a blessing.

    How wrong can a guy possibly be?

    Anyway, back to the amp… after taking it home, playing it for a few months, and using it to earn a grand total of exactly $0.00, I decided I was in love with a woman. I took the amp back to the same pawn shop and hocked it for a diamond ring.

    Two months later, when the relationship ended and I took the ring back to the same pawn shop, they were happy to buy it back from me. For 50% of what I’d paid for it.

    They still had the amp, and I wanted it back. But I didn’t have the full amount. And guess what… they only would accept the minimum $15 payment OR the full amount. After a few months of minimum payments, I realized I would never get the amp back.

    So, in conclusion, I lost the amp. I lost the ring. I lost the girl. But I got to KEEP all of the credit card debt!

    That’s how this game works.

    So here’s my rant. Using credit cards = being in debt. For life. It means sending part of every paycheck to a credit card company. It means living life in debt.

    In contrast, being DEBT FREE = walking down the street with a smile. It means not worrying about how the bills are going to get paid. It means abundance, wealth, joy, and the ability to GIVE.

    I lived all of my adult life (from age 19 to age 41) in debt. Then I woke up, paid off all of my debt, CUT UP ALL OF MY CREDIT CARDS and closed every credit card account, built up an EMERGENCY FUND of six months worth of expenses, and now my wife and I are saving for a house. (Say it with me: We won’t even THINK about signing a contract until we have at least 20% down, and the terms will be a 15 year fixed mortgage with monthly payments that equal no more than 25% of total income. Until then, we wait, we work, we save, we stay in GRATITUDE for all of the abundance in our lives.)

    (NOTE: My wife and I both work for non-profit agencies. It took us almost two years of constant effort to get ‘debt free’. It was NOT the overnight cure that I’d hoped for. Much to my surprise, I’m finding that nothing worthwhile in my life IS a quick fix.)

    What’s happening today?
    When I get my paycheck each month, I don’t worry about “minimum payments” or “late payments” or “missed payments” to any credit card company. I laugh all the way to the bank. When I want to rent a car or buy an airline ticket, I use my DEBIT CARD. (If a company doesn’t accept my debit card, I don’t USE that company.) I like to pay CASH for things. I don’t owe anyone ANYTHING. Especially not a credit card company.

    And with all of the energy and passion that is freed up by releasing debt-related fears and worries, I have more energy for my music, for communing with nature, for connecting with my colleagues, family, friends, and loved ones. My life is simply fuller, richer, and more delicious than ever before!

    If you want to live a life of abundance, I recommend getting out of debt and never, EVER using credit cards again. I recommend the movie “Maxxed Out”. I recommend Dave Ramsey’s “Total Money Makeover”. If you aren’t into the religious/spiritual angle, just set that part aside. The financial wisdom is worth the cost of admission alone.

    Credit rating? I choose to build wealth and not worry about my credit rating. If having ZERO DEBT gives me a bad credit rating, I’m okay with that. There are mortgage companies like Churchill Mortgage who do MANUAL UNDERWRITING to determine my financial position. They don’t worry about my three-digit FICO score. If I’m in great financial shape, they’ll know it. And I’ll still be able to buy a house at great rates.

    (Sorry, Suze Orman. I’ve read your approach and I know you want to protect that FICO score. I’ve also read that you are sponsored by the folks who created the FICO score. Is this true?)

    The big banks can KEEP their airline miles. They can keep their complimentary ball caps. They are targeting young adults and college students. They are predators.

    Kill off debt. Build wealth.

    We can all choose to get rich SLOWLY and have something to pass on to our heirs and favorite charities. We can choose to squeeze the juice out of life. We can choose to be happy. We can choose to be debt free.

    And we can choose to start NOW!

    Light, love, joy and abundance to you!

    (*Special thanks to my father and to my friend Miguel DeLeon for pestering me for years to check out Dave Ramsey’s approach to building wealth and living in abundance. And special thanks to Dave. I’m so glad I finally listened to you!)

    Posted in About | Tags: abundance, Churchill Mortgage, Dave Ramsey, debt free, FICO, gratitude, manual underwriting, musician, My Total Money Makeover, poverty, Roland Jazz Chorus 77, wealth building

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