Credit Card Craziness

I was watching some really bad TV on VH1, Mafia Wives to be exact, while I was on the elliptical at the gym and I saw a commercial for the RUSH card.  It's this pre paid Visa being offered by Russell Simmons.  Your tax return or paycheck can be deposited directly onto the card.  You can also add money to it at any time.  At the end he says that he created this card so that everyone can have access to the American Dream.  I couldn't help but laugh.  What a crock.  Credit cards have mostly been a nightmare for people not a dream.  And how is depositing my paycheck onto this card going to get me any further then where I am right now?  If Russell were planning to add some of his stockpile of money to it then I might understand but if I only make $500 a month and I deposit it onto this Visa I still only make $500 a month.  What more is that going to get me?  OK, so I can rent a car now and reserve a hotel room but I doubt that has anything to do with the American Dream.

I just thought it was funny that he made this big global statement about this card  and the American dream in one breath.  I get it that it will help people build credit but it really is a huge leap especially when the credit reporting that is supposed to help you build your credit is only done by "participating" agencies.  So then I couldn't help but wonder, what does the company get out of this because you know there has to be a money making angle in there somewhere.  Could they possibly be charging interest to use your own money?  Well, the answer is no but the fee schedule attached this card is longer and more complicated then any I've ever seen for a credit card or bank.  If you get the basic card your monthly fee is only $3.95 but if you get the BabyPhat Rushcard design-no I'm not making this up-it's $14.95 per month.  Depending on what plan you choose you are basically charged for everything for things like simply using it.  There are fees per transaction.  You are charged for getting a replacement if you lose it and depending on your plan there is a monthly maintenance fee on top of the initial monthly fee.  They charge you to enroll in bill pay then a monthly fee to use it.  The only thing that is totally free is getting your online statement.  If you decide you want paper it's $1.00 per month.  Now you know a lot of people will not look at this monstrous fee schedule and then they will wonder where all of their money is disappearing to and probably be surprised at how quickly all those little fees add up.   

I on the other hand don't have to settle for a RushCard.  I got the invitation I've been waiting for my whole life.  The coveted and rare Visa Black card.  Yep, little old me.  It came in this thick black fancy envelope.  Did you know that only a very small percentage of the population is considered worthy enough to have it?  Well, the interest rate wasn't bad for these times at 14.99 % but still not anything I want to pay out on purchases.   If that wasn't enough to make me say forget it then the $495 yearly fee was.  That's an airline ticket.  I'd rather buy that then pay a yearly fee for a card that provides me with concierge services and airport lounge services that I would rarely even have the chance to use.  Besides that, I hate debt.  Clearly it's for rich folks but thanks anyways.

I had no job and no credit history but I was handed my first credit card in college.  For some odd reason I wanted the ugly Bart Simpson T-Shirt with the Visa logo they were giving away for free and thought it would be cool to have some plastic. I was practical enough not to use it much and have never been in any kind of major credit card debt.  I hate having lingering debt and I hate paying interest.  It adds onto the purchase price so that if I got a killer deal on something that interest just eats it up.  I paid cash for my car and if there was any way on earth I could've done the same for our house I would have.  We paid cash for our wedding, everything we furnished our house with and all of our little home improvement projects.  I have never allowed myself to overspend beyond my means.   I'm a saver not a spender and I was basically born that way.  If it's a big purchase and I don't have the money  I'll use the cards and try to take advantage of balance transfer offers to minimize interest with the plan of paying it off quickly.   One purchase at a time.  I use my Discover card for daily use and pay it off monthly so I can rack up points.  It's great for my credit too.  This works well if you know your budget and have the restraint to stick to it.  I've had up to $150 in cash back bonuses at one time which I save to use as spending money on trips and Mj and I got hundreds off of our Hawaii plane tickets because of accumulated points.  I'd much rather make money off of them and not let them get a dime out of me! 

May kicked my butt financially.  Patio Furniture, new glasses, and Mother's Day.  Big Sis B Day and Mj's B Day.  I bought him an i Pad-enough said!  Then there was the car registration and our San Francisco trip.  All that along with my seemingly uncontrollable urge to shop happened at once.  So this month I'm only paying off my statement balance and not the entire actual balance, which still won't cost me any interest because bill close was the 10th.  I busted my budget which I usually don't do but hey, it's bound to happen some times.  I'll let a bit roll over into next month and pay it off then.  Credit cards can be evil if abused but they can be your friend if used properly.  The cards can establish the credit needed to get houses and cars but if you get out of hand and abuse them you'll have a lot of stuff but not much of anything else.