I Deserve a Little Credit

This week I paid off my last student loan, 15 years after I graduated from the University of North Texas, and brought an aggravating credit card debt down to $0. A five-year car loan is two payments from completion.

Matt Haughey's celebrating the demise of his own student loan and other debts:

All told, we'll be saving around a thousand bucks a month that would normally been sent away, which isn't too bad at all, especially on an annual basis ($12 grand in my pocket!). Then I started looking at all my bills as annual raises.

I feel closer to Sallie Mae than Haughey does, because she helped me stretch college out to 6.5 years without taking a job in the food service industry.

But the heady feeling of knocking off a long-term debt is great. I wish it felt as good as watching a brand-new high-definition television with no payments until January 2008.

2006/08/24 · 5 COMMENTS · Link

Comments

Congratulations! I remember getting out of debt once. At the time, I was determined never to get back in, but then I started a business, got married and had a few children. If all goes as planned, I'll pay that all off in two or three months...after which, I'll trade my monthly rent payment for a mortgage.

#1 · Antone Roundy · 2006/08/24

A former employee of mine, a young man with a wife and two kids, got entrapped by one of those rent-to-own deals on a flat-panel HDTV, which he could have bought outright for $1750.

He was complaining what a burden it was to make the $200/month payments. I asked how many payments had he made (8, plus an initial deposit, plus various fees), and how many more did he have (24!). I told him this was madness, that he should break the contract immediately, and tell the company to come get its TV.

So for what these bloodsuckers wanted to charge a naive young family man for a TV he didn't need (his old 26-inch screen one worked fine), he could have bought the same HDTV and a nice used car, simply by putting $200/mo. into a savings account and purchasing them when he could afford it.

How what these slimeball companies do can be legal is beyond me.

#2 · OPB · 2006/08/24

It isn't the amount of debt, or how long you carry it. It's how much it costs. I've very happily carried debt at rates well below market. I redeploy the balance and let it earn faster than it costs me.

Where does such a deal exist?

It depends on how you measure "what it costs" and "earn faster". Not all things are measured directly in terms of what you can sell something back at.

Love your debt Rogers. Now that you are ultimately respectible, look for the opportunities for someone begging to sell you debt at cheap prices. Then deploy your real assets into making them earn, instead of burn.

Regards,
etc.

#3 · The Perfect Storm · 2006/08/24

OPB: It's not the company's fault the "naive young family man" isn't very good at math. You said it yourself, it was a purchase he didn't need to make. Unfortunately, he made it in an ill-advised manner.

#4 · cabuki · 2006/08/28

I've heard your argument before, but I don't 'buy' it. You're right that he's not good at math (he could be if he tried), but these sort of companies and those quick-cash operations that take car titles as security are formed with the express purpose of exploiting uninformed/ desperate people, the very ones who can least afford the losses they usually incur.

I say such companies are operated by criminal low-lifes, who should be put out of business.

#5 · OPB · 2006/08/28