A Grin at the End: How to sleep well at night

December 2014 Posted in Columnists & Opinion

carl-sampsonBy Carl Sampson

I have a lot of friends in the banking industry. Tons. Bunches. Bushels. Boatloads. Rafts.

Anyway you say it, bankers are my friends.

They must be, or they wouldn’t send letters to me all of the time.

I should explain.

In the past year or so, I have received 64 letters in the mail from banks. Each letter offers a special pitch.

“Earn 50,000 bonus miles and a $50 statement credit.”

“Zero in on a card that gives you a long-lasting intro rate.”

“Earn a $200 gift card.”

“Earn cash back.”

“Get two roundtrip flights.”

You may have guessed that these banks’ credit card companies, really are in love with me. They will do virtually anything to weasel their way into my wallet.

“Carl, Your credit card should work hard for you. I’d like to offer you this (fill in the blank ) card. Once approved, you’ll earn free trips fast,” another says.

Yep, these guys know how make a guy feel loved. I love to travel. I love to buy cool stuff for my wife and kids. And I really like a good deal.

It’s just that I have this quirk. I don’t like owing money. Oh, we have a mortgage, but not much else in the way of debt. And I want to keep it that way.

I’ve found that debt is bad for my health and for my peace of mind. When I do owe a little bit of money, I stay awake at night figuring out ways to pay it off as fast as possible.

I make Dave Ramsey, that financial guru guy on the radio, look like he’s a poster child for the credit card companies.

But, as Paul Harvey used to say, there’s more to the story that illustrates why we should all stay away from credit cards if at all possible. Each letter has a second page. On it is the fine print. Here, let’s take a gander at one I chose at random.

“14.24 percent. The APR (annual percentage rate) will vary with the market based on the prime rate,” it says. As I am writing this, the prime rate is 3.25 percent, so it looks to me like the “deal” I’m being offered is the prime rate plus about 11 percent. That’s bad enough, but if I were to miss a payment or pay the bill  late, the interest rate would zoom to 24.24 percent.

That’s just about what my friend Vinnie’s uncle in my old neighborhood in Philadelphia would charge for a loan He’d even promise not to break my thumbs if I missed a payment.

That’s why when those letters arrive — sometimes two or three a week — I have a special place for them. I put them in the box next to the fireplace. That way they’ll be turned into heat, and even save me some money — on the natural gas bill.

In every sense of the phrase, every one of these “deals” are ones we all can afford to refuse. Especially if we want to sleep at night.

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