Saving a million dollars!

A few years ago I was walking through an airport, I don't even remember where, and an attractive young woman started asking me to apply for a credit card. I told her no thank you but she insisted that it was a contest and she only needed a couple of more applications to win.

I had my identity stolen a few years ago so there is a block on my credit reports. I have to be contacted before they give out information which I explained. No problem she said. Well a few weeks later I got a new credit card from US Airways (Lehman Brothers) with a $25,000 credit limit.

I used it once to pay for some tuition for one of my sons when cash flow was tight. Had the best of intentions to get it paid off and then the bottom fell out of the financial system. The $25,000 credit limit fell to essentially what I had outstanding, approximately $5,000.

As a small business man the last 18-24 months have challenged us all. It's getting better every day but in an attempt to manage the cash flow during the crisis I was just paying the minimum and I was holding on to the cash.

I really wasn't paying attention because when Lehman Brothers fell they were acquired by the Barclay's Bank and my nice little 7.9% interest rate went to 30.9%!

I know, I know, I'm a CFP. I should have been paying attention.

Unfortunately I was focused on the 85,000,000 I oversee and I took my eyes off my own "shtuff".

Wow, long story to tell you that when I realized that the balance wasn't going down I checked the statement. Credit card statements now have the information on what it will take to pay off the balance in 3 years and how long it will take to pay it off at the minimum balance and how much you can save by paying it off in three years.

I'm not even going to ask you to guess, I do with clients when I tell this story. At the minimum payment it will take 1,761 years to pay off the balance of less than $5,000.

And the savings if I paid it off in three years ..... $1,055,630.

I think we'll write them a check this month. Then I can tell Donna I saved a million bucks!

A lesson to be learned here, pay attention to the credit cards, set yourself a goal if you have debt and pay it off.