The credit card companies don't want you to know that with a flip of a with the flip of a switch, they can make your financial problems worse, much worse. (Even if You didn't do anything wrong).

"We're your friends!" they said.

"We would like to help you use money responsibly!" they said.

"Our clients are like family to us!" they said!

What they DIDN'T say was "UNTIL".

Three years ago, I was in deep credit card debt as a result of some very bad decisions I had made when trying to start my own side business.

I found myself circling the drain because when I was stuck I had access to excessive amounts of credit.

I had a decent income and never made a late payment.

Even so, I was pretty resourceful and kept making my payments on time, but I knew I was drowning. 

Reluctantly, my wife and I hired a financial planner to help us figure out how to solve our debt issue.

Reluctantly, because I was too proud to admit that I needed help. But Sarah (the financial planner) was really bright and architected a way out of the nightmare we were in.

But, just as we were starting to make progress, a funny little thing happened. I lost my job at the hospital I was working at. THEN, even though I was current on my debts, I started getting letters from the credit card companies.

Because my overall debt load had reached about 75% of my credit limits they now considered me high risk and had made some changes to my credit agreement.

DIRTY LITTLE SECRET #1

YES THEY CAN DO THAT!

What no one had ever told me about my credit debt was that as your debt to credit limit increases, this causes your credit score to tumble, and when it does, the card companies can take action against you, even though you haven't done a single thing wrong.

DIRTY LITTLE SECRET #2

The first letter I received from Chase Visa said that they were lowering my available credit from $10K to $8800 (conveniently the amount I already owed them). Thus, because I owed them, they penalized me even though I had been with them for 15 or more years, and NEVER (not once) had been late paying them.

DIRTY LITTLE SECRET #3

As soon as Chase lowered my limit, my credit score then tumbled a few points which triggered a letter from Edward Jones Mastercard that going forward, any new purchases would be subject to a higher interest rate.

The moral of the story is that the credit industry was not interested in me (or you), they are simply a vehicle for raising revenue. I.E. They care about your money. You are not your money.

Fortunately, with Sarah's advice, some serious habit changes, and an insane amount of luck selling some real estate that I happened to own, I was able to bring my credit cards to zero.

SUDDENLY, AND WITHOUT WARNING 

The offer letters started pouring in!  

Now that my debts were gone and my credit score had climbed to 800 they came crawling back wanted to drag me right back to where we were before.

What they didn't know was that I always forgive, but never forget.

I had cut up all of my cards and cancelled the ones who kicked me when I was down.

Intellectually, I know they were just doing what businesses do, but emotionally, I know who my friends are.

But, actually, I refuse to use any credit cards or the like, probably ever again.

Ultimately, what really bothers me about credit debt is that when you are paying on credit cards, you are living in the past.

I prefer to live in the present and plan for the future.

That is the way to stay out of trouble and to sleep better at night.

If you need help figurine out how to navigate your own financial mess, please reach out to me by Corey@CoreyJahnke.com 

Please feel free to share your own story of financial wins and losses in the comments below.

The key to living a life of Financial Freedom is learning to be open and honest about where you've been, where you are, and where you are going.

We will talk more about that in our next post!

Thank you for your time and have an AMAZING day!