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Chapter One: Beat the Bank
So there you are, swinging through life buying a teensy bauble here, an itty-bitty new purse there, and occasionally taking that hottie down the hall to a nice little din-din to cheer him up after a lousy audition. "Everyone deserves a little pampering now and then," you tell yourself. Your friends tell you the same thing, sympathetically especially when you're picking up the check. And that's when you get the call. You know the one it's usually from a Mr. Green or a Ms. White, and it almost always begins with something misleadingly polite like, "We'd like to speak to you right away about your credit card balance." "Why are they bothering me?" you ask. "It was just a pair of shoes!" you think. And finally: "What's with the color-coded pseudonyms?"
We hate to inform you, but you've fallen into the dreaded Deadly Debt Trap. All credit cards should come with a label: Warning! Warning! Credit cards are not free money! But they don't, and before you know it, you're maxed out and have zero money left over after paying your bills. How's a person supposed to lead a fabulous life with a budget of nada?
Stupid Reasons for Going into Credit Card Debt
1. Gucci brings out my green eyes.
2. With a big-screen TV like that, who needs a boyfriend?
3. My honey may be a deadbeat, but he's my little deadbeat!
4. Bloomingdale's is on my way to work. Like that's my fault.
5. By buying those Ralph Lauren sheets on sale, I'm actually saving money!
Having credit card debt is like wearing a heavy ankle bracelet (we're talking house arrest, not a fashion accessory) 24/7. It keeps you from building any kind of savings, including your See Ya Sucker Stash (see Hit the Road), and can make it harder for you to rent apartments, get loans, or buy a house.
Proper Credit Card Conduct
1. Transfer your balances to cards that earn you freebies, like airline mileage.
2. Transfer your balances to a card that has an extremely low APR* (like no interest for a year), then try to pay it off before that introductory APR is raised.
3. Always pay more than the minimum, but not so much that you don't have enough to pay other bills.
4. Finally, screen your calls no need to let "Mr. White" ruin your night. Just be sure to pay the bill the next day.
Tips for Getting out of Debt
1. Don't live in denial. Figure out everything and everybody you owe.
2. Lower your expenses. Tap into your inner Disciplinarian, who can slap down your inner Princess from time to time. When you start to whip out the plastic, ask yourself: "Oh, fabulous one, is this a need or an indulgence?" Learn to tell the difference between the two; indulge when you have the cash in hand, but try to do it cheaply. (See Blue-Chip Babes.)
3. Increase your income. Get two jobs (it can be done) or a higher-paying gig until your debt is paid off.
4. Get help. Call the Consumer Credit Counseling Services at (800) 577-2227.
Copyright © 2003 by 17th Street Productions, an Alloy Company