An Avalanche of Circumstance
Anticipating widespread backlash from yesterday's post, I tentatively knew what today's topic would be. The pushback was indeed harsh! It's the exact type of harsh I was expecting, though.
Today, I bring you the story of Jeff. That's not his real name. He wants his story shared publicly, but anonymously for now. He and I have been talking about bringing him onto the podcast, but he's wavering. In the meantime, his story will live here.
For the last 8-ish years, Jeff has been one of my biggest critics whenever I discuss how credit cards are bad for us. He's become quite aggressive with me at times, even calling me stupid and openly mocking me in group conversations. Jeff, in his late 40s, is a known entity in the finance world.....at least in his niche. He's the kind of guy that will get mic'd up at a conference and discuss complex finance concepts in front of hundreds of fellow finance professionals. Jeff knows finance, and has been doing it for a long time.
I'll summarize Jeff's frequent pushbacks whenever I appeal for people to get rid of their credit cards:
It's an interest-free loan as long as you pay it off within 30 days.
The points are amazing! He's known to send me pictures of his vacations to poke at me about how this flight or that hotel was free because of points.
In his words, he had never paid one cent of interest or one late fee in his entire life (perfect 30-year track record!).
It's about personal responsibility. If you're responsible, you're good. Credit card debt is an outward expression (and natural consequence) of irresponsibility.
Recently, I received a text from Jeff; he wanted to meet for coffee. When I walked into the mostly empty shop, I saw him sitting in the corner. His shoulders were uncharacteristically slumped, and his face was expressionless. I could immediately tell something was wrong. We shared a few pleasantries, but I sensed he just wanted to get to the meat of the conversation.
As he put it, he and his wife had experienced an "avalanche of circumstance." One of their kids got sick, their septic system went haywire, his wife had her hours cut at work, a car was having trouble, oh yeah, and rampant inflation. As these events were unfolding, he did was he always did: put everything on the credit card. They make good money, so he planned to just make it up next month. Or maybe the month after. Shoot, maybe soon. The emergency fund was quickly drained, as were other sources of liquidity.
The result? After 30 years without a single cent of interest or fees, he had $23,000 of credit card debt and no idea how to navigate it. Mere months ago, he was mocking people for "irresponsibility," and now he was on the other side of the aisle. He was sick and embarrassed.
These are scary times for Jeff and his family. He now understands when I say, "Credit cards are great....until the moment they become your biggest nightmare." They are the path of least resistance and the gateway to quick, rash, and destructive decisions.
Jeff isn't alone. He's the face of our growing credit card crisis. To be continued....
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