Saturday, May 05, 2007

MBNA & More

Hello friends!

Andy O. over at the Internet Peasant has lamented about his recent negative experience with MBNA. Well, my friend, you certainly aren't the only one.

I've had an MBNA card since '98. I signed up at Comisky Staduim in Chi-Town on my way out to a Sox game and got a free hat. I did not expect to get a credit card as a young punk, but I did.

Since then, my card has bailed me out of some tight situations, but it's tough to get bailed out of credit cards, especially if they are jacking you on the interest rate.

Growing up in this country during the latter part of the 20th century experiment, credit cards and living on credit seemed very normal to me. Our ancestors from 2-3 generations before, though, would likely have shunned such prevalant use of credit, especially when it came to owning living accommodations. I can hear them now: "Save until you can purchase a home with cash, or build it yourself, because JP Morgan honestly does not give a rip about you or me."

Credit card debt in this country is, on the average, $9,656 or so, and the interest rates on these babies range from bad to worse, especially if you miss one payment. Last year, Americans saved, on average, a -$0.56. That's the first time we have saved as a country in the negatives since the depression.

Anyway, I have an MBNA card. I was on my way to paying it off a couple of years ago when I decided "F-them, I'm closing this account." Well, when you call them and say you want to close your account, oftentimes they have someone very professional try to stop you. At least did with me anyway, and you can list your grievances and negotiate terms.

I still have my MBNA card today, but believe in paying cash for everything. Even if it is an emergency, we are betting off borrowing from friends and family then a credit card company, notwithstanding the pride factor.

Maybe there is nothing overly new in it, but here are some simple rules for becoming financially independent:

1. Save your money
2. Own your property, i.e., car, home, dog, etc.
3. Pay cash
4. Invest for the long haul at a 10-12% rate

Basically, decrease your monthly payments as much as possible. Pay off balances quickly. Then save and invest what you previously were paying.

I would certainly welcome and encourage any and all feedback regarding how you all save or how to better manage your dough.

Keep Your Juice.


1 comment:

Internet Peasant said...


Personally, if you have military priveleges available, either through yourself, a spouse, or parents, go with a Federal Credit Union or USAA. Their rates are lower, and they do everything from car insurance to mortgages, if you have to do that. HELOCs work well too, if you can find a low rate.

And despite what MBNA tells you, all credit card companies are not created equal. Nick is right that they're all bad to worse, but MBNA is definitely in the "worse" category.

Thanks for the moral support, Juiceman.