Credit Cards: The Ultimate Evil

"Don't buy things that you can't afford."

Last winter when Steve Martin hosted Saturday Night Live, there was a hilarious infomercial sketch for a debt-management book called "Don't buy things that you can't afford." No matter how many times the spokesman explained to the couple the title, theory, and financial plan - all of which were the same - they still couldn't get it through their thick heads. "So wait, you mean... if you don't have the money, use your credit card, right?"

For some reason, no matter how many times I told myself in college NOT to use my credit cards, I did it anyway. I always had an excuse. I needed to buy a birthday present for my Mom. I needed to get new shoes. Sometimes, I really did need to use it - like when I found out my tires were going bald and needed to replace all four of them. But whatever the reason, I accumulated a credit card debt of almost $18,000!!

Credit card companies target campuses with an arsenal of free gifts and low introductory rates... they want young college kids with no worries and a put-it-off-till-later attitude. If you're like me and got suckered in, you're now wallowing in student loans AND credit card debt. An overwhelming and depressing combination.

But there are solutions, and I'll share the one that I found. There are non-profit organizations that exist for the sole purpose of consolidating your credit card debt. We chose a company called Money Management International (MMI). MMI negotiates with the credit card companies on your behalf, and for a small fee, takes care of all your payments. You need only send a single monthly payment to them. Your credit cards are then considered gone, and you aren't allowed to obtain a new one without being booted from the program. We have been in this program for about a year and a half, and we've seen a significant chunk of our debt disappear. What's better, is that we have an official pay-off date - we know that as of 2009 (gulp!) we will be free of credit-card debt. It's still far off, but at the rate we were going it would have been much longer.

Besides consolidation, there are few options for credit card debt. Unlike student loans, there are no forbearance or deferment options. And missing payment on credit cards has serious repercussions - like enormous fines and sky-rocketing APRs. Consolidation truly is the way to go, unless you can afford to pay more than the monthly minimum.