A few months ago I had one of my balance transfer deals expire. Because of the amount of my current debt load, I didn’t think I’d be able to apply for another one, so I’m just waiting for a few more months before I apply for another one. Of course this is a completely annoying situation because that means I’m now paying more than 19% on that debt. Grr. And because I’m doing the Debt Snowball thing by total balance, this means that this particular debt is #3 on my list. Double grr.
The whole reason I didn’t bother applying for a new balance transfer deal is simply because I knew I’d be declined. How do I know this? Because in February I had applied for a consolidation loan with my main, nice bank, and was declined. I know that those credit card companies are sometimes more forgiving and will give you a credit card when you really shouldn’t have one, but I didn’t even want to bother doing that, you know? I was declined, and that was that.
What’s even scarier is that my credit is actually pretty good right now, even with my current debt load. I have never defaulted on a loan and have been late with a payment only about 3 times in almost 15 years. So my credit numbers are good. That’s why it was a bit surprising to be declined on the consolidation loan, but the bank was doing me a favour. It was forcing me to get my finances in order and figure it out on my own. As the credit crisis continues, and more people lose their jobs, it’s apparent that more of them are using their existing credit to survive. I can’t tell you the number of people I’ve seen at the grocery store paying for a $10 grocery bill, and it’s not because they want to earn the points on their affinity card, let me tell you. It’s because they don’t have any money left. Sure, I’ve done that when I don’t have access to a bank machine and I only have a bit of cash left in my wallet, but I don’t do it because I don’t have any money at all. But sometimes you just have to, you know? You take a cash advance off a credit card to pay the monthly payment on that card. Which of course leads to more credit problems because the amount of interest you’re being charged keeps compounding. It’s a vicious cycle.
But that’s why more banks are just declining people the credit in the first place, something they should have been doing all along. I always found it funny when the bank would offer a $10,000 credit limit to someone with only a $30,000 income. The banks have finally decided that it’s time to stop gambling on people and instead help them out. It’s tough love people, but it’s about time the banks did it.
