First and last credit card

My first credit card — a Chase Rewards card that I got back in 2005 to help with Thorn expenses — is now my last and final. It had a $300 credit limit when I got it, and had a $2700 limit earlier this evening. I paid the remaining bit of balance on it this morning and closed it just 20 minutes ago once I saw the balance was $0. It took 2 minutes and 52 seconds to sever my last line of revolving credit.

I feel strangely… cut loose. Like I’m no longer wrapped up in so much of America’s debt problem, even though I still have loans.

But all that’s left is the $25k of my student loans and the bit I owe my parents.

You might laugh at “only” $25k, but $25k at ~6% and 0% interest (student loans and parental loans, respectively) beats $6k at 30% interest any day in terms of my ability to sleep at night.

December 2010, y’all, if my salary stays the same in that time. Unfortunately, my credit card woes won’t disappear off my credit history for 7 years, or 2014 for the worst of it. The “worst” being some rather late bills. 2015 for all the revolving credit info to be gone.

I’m very glad that I realized at the end of teaching that I needed to get the debt under control (that is, gone), rather than after I was earning larger wages. It’d be much harder to curtail spending and sack away money if I’d grown accustomed to spending all that I earned on a proper developer’s salary. Now I have about the same living expenses as I did when I was teaching, but more than half-again the income.

That’s good stuff.

  • guyblade

    Why bother canceling the card? It can be very useful as an emergency funding source or as a way to float things until reimbursement. Also, you can usually find cards that offer some kind of rewards that are useful regardless of whether or not you maintain a balance. Depending on your level of discipline, you can probably use a credit card as if it were a bank card and reap many of the rewards of each.

  • Because I don’t need it. If I live below my income and build up a good emergency fund, then I won’t need to go in debt if an emergency occurs. And my emergency fund will be bigger than any credit card limit that I had on the cards I canceled.

    Floating things until reimbursement is why I got the card in the first place, but I don’t have a job now where that’s required — nor do I plan to (I don’t want a traveling gig, for instance). If, for some reason, I do need to, then I’ll allocate it in my budget and take care of it with real money.

    Between the low rates of rewards — 5% rebates don’t impress me, and rewards at 1 – 2% are even sillier — and the annual fees, it’s not worth it to me.

    I won’t need to borrow for purchasing a car or a house if I do the right thing and save up for it, so I’m fine letting my credit score drop to zero over the next decade after I pay off my student loans.