And then there were two … credit cards

Anyone who knows me well (or semi-well) will know that I often talk about my credit card debt. It’s not that I’m boasting about my credit limit (it’s close to about RM100k I think), but it goes to show how much of a burden I’ve been carrying.

My close friends will know that my 2008 new year’s resolution was to pay off my credit card debt by my 30th birthday. This decision came following two major trips in 2007 – to New York and then Prague-Sweden-Amsterdam – which added to my already massive credit card debt. Most of my major charges on the cards are from travels, beginning with a trip to London and Salzburg in 2003, my first big trip after starting to work the year before.

To cut the story short, I had a massive, massive credit card debt.

In 2002, I only had one credit card and it was a supplementary one. Mum got me one for when I was studying in Australia, for emergencies mainly (and well, my allowance went into it so I spent from my credit card). When I started working, I thought I should get my own card so I applied for one from Citibank under their Graduate programme. I got rejected (yes, my starting pay was that low).

For about a year, I didn’t have a credit card but then the 2003 trip was coming up and I thought that it made sense to have a credit card with me. Worried that I might get rejected again, I applied for several cards – Alliance Bank (this was much earlier than the rest but I was told to travel with at least one Visa and one Mastercard), Direct Access, RHB Bank and Citibank. While waiting for the reply, I attended an MTV Visa event by Hong Leong Bank at Twelve SI (anyone remember that place?) and was given immediately approval. I applied just in case the others rejected me.

Well, guess what? I got approved on Alliance Bank, RHB, Citibank and HLB. Suddenly, I had six credit cards – RHB gave me three – two Mastercards and one Visa – on the same credit limit. Don’t ask me why.

Over the years, my credit limit has been increasing, to the point where I think it’s gone crazy. It’s way beyond anything I can afford and I really don’t think the banks should be approving such a credit limit for someone with a salary as low as mine (I’m not being humble here).

Needless to say, I went a bit crazy with it and I have made many trips since; all charged to my credit card, by the way. In fact, when I was in New Zealand in 2004 (pictures here), I was on such a budget because I was so close to my credit limit that my best friend Adam had to bail me out several times.

Fast forward to 2008 and back to where I started this blog post. Needless to say, I was tens of thousands Ringgit in debt, and I told myself that I would no longer travel outside of Asia until my cards were paid off (except for one trip to Australia in 2009 but that was for work!). Each time we got a bonus at work, I’d dump it all into my credit card.

It was painful but it had to be done. As I approached mid-2009, I realised that my dream of paying it off before I was 30 would not materialise. When my birthday came in September last year, my credit card debt was still in five figures. I gave myself until the end of the year.

It’s January, and the debt is still there but it is quickly getting settled. I hope to be done with it in a couple of months at most.

In 2004, I realised what a guy like me who lacked the will power to control his credit limit could do with so many credit cards. I tried to cut them, but my hands just refused to do anything about it. So I did the next best thing, locked them up. That never works.

Well, today marks a milestone.

Not only did I have two of the four cards cut, I also canceled them (which means I can’t just use the card number to purchase things off the net – like air tickets for one!).

I canceled my RHB Bank and Alliance Bank ones because I like their service the least. The former has ridiculous charges – today, as I canceled it, I was told that I have an outstanding balance of RM106.40. RM100 was an annual fee charged in December, RM5 was a late charge because I haven’t settled it and the RM1.40 is the interest on the annual fee. WTF right?

The latter was simple. Take today’s scenario for example. I spent about 2.5 hours trying to call to find out what the cancellation procedure was. Each time I called, I was put on hold by the machine and after a minute or so, I’d get transferred and then … the line gets cut. Every time!

Not a difficult decision to make, really. I still have my one Mastercard and one Visa, like I originally intended to, but I don’t think (or at least hope not) that I will spend money that I don’t own the same way again.

Watching your colleagues buy nice things with their bonuses when you can’t get a single thing because it all go into the credit card really sucks. Big time.

So now, there were two. They’ll stay for a while but let’s see how I handle them first before I decide to do anything else, er, rash, eh?

10.25pm Malaysian time (+8 GMT)

Tags: alliance bank, citibank, credit card, debt, direct access, hong leong bank, rhb bank