Shedding The Last Vestiges of Credit Card Indebtedness

I started accumulating significant credit card debt in 1995. Once I started down this path, I became accustomed to living with debt. I saw my balances go up and down (mostly up) and I just paid whatever I could. I guess you could say that I expected myself to be in debt forever, especially since I also carried an onerous student loan debt (and still do.) I was really never successful in saving money and paying down my credit card debt.

At some undetermined point in my life, I decided to add a “credit protector plan” on my credit card. With the plan, I would pay approximately $0.68 for every $100 balance I had on my credit card. I wouldn’t need to pay my monthly minimum and I wouldn’t incur any interest in the event of a lay off, disability or hospitalization. Although I didn’t realize it at the time, I enrolled in this plan in lieu of having an emergency fund.

Flash forward to the present. I’ve paid off my stinking credit card and I’ve also managed to squirrel away some decent dough for my EF. I’ve concluded that I no longer need the rip-off credit protector plan.

I called Citibank to cancel the plan and, as expected, I faced some resistance. Initially, the telephone rep asked why I wanted to cancel my plan. I told her, “Because I no longer carry a balance month-to-month.”

The phone rep replied, “That’s wonderful! But this plan will allow you not to have to pay your credit cards in the event of disability, layoff or hospitalization. The benefits of this plan are quite exceptional and I will mail you some information as a refresher so you can have time to think it over.”

“Uh, no thanks. Please just cancel the plan.” (Internal dialogue: "That's what my EF is for.")

Undeterred, the phone rep pressed: “Since you’ve been a loyal customer for many years, I would like to offer you a discounted price of $XX for every $100 of your balance.” (At this point, I’ve stopped listening so I don’t remember the price she quoted me.)

Strangely enough, while I wanted to yell, “Just f&#*ing cancel the d&mn plan!”, I found myself giggling inside. I composed myself and said, “I admire your persistence. But my decision is firm.” (I didn’t want to be mean to the phone rep since she’s only doing what she’s required to do. No point in being nasty to someone for her employer’s idiotic policies.)

The phone rep finally relented and said, “Okay. I will go ahead and process your request. But I do want you to know that you’ve already paid $XXX into this plan and I would hate for you to let that money go to waste.” (Internal dialogue: “Uhhh… I think it was wasted the moment I paid it.”)

“Wait a second, how much have I paid into this plan to date?”

“$853.39.”

“Wow. Thanks for canceling the plan.”

I couldn't believe that I’d wasted $853.39 over the years to insure my financial irresponsibility. Once the shock wore off, I was dance-in-my-underwear elated that I no longer have to pay this premium. For some reason, this made me much happier than any of my recent milestones. Perhaps I was happy that I could brag about my financial accomplishments without guilt to my credit card company, albeit its lowly phone rep.

But after the ecstasy wore off, I calculated that I’d charged over $125,499 on this card over the years. (I’m assuming that the cost of this “insurance” remained constant at $.68 per $100.) OMG. And that’s just one card. God only knows how much interest the cc companies have made off of me...