Rita Robyn is 67 now and still remembers her first credit card.
“Got it from Macy’s when I was 22,” she said. “I could buy anything in the store I wanted and charge it. I couldn’t believe I had that much power!”
She also remembers her last credit card.
“I was 62,” she said. “I actually had 15 credit cards at the time. I had one with a $10,000 limit, a couple with $9,000 limits and several with $7,000 limits.
“I was over the limit on most of them, so I took out one of the balance transfer cards with a $27,000 limit and used it to make the minimum monthly payments on all the other ones. I went home one day and added all of them up and I owed something like $74,000. I couldn’t believe it!”
Robyn chuckled when she got to the “… owed something like $74,000” part of her story because she can laugh at it now. Her 40-year career as “Credit Card Junkie” (her description) is over. She paid off every penny of the debt (actually $73,634) during a four-year, 10-month run in InCharge’s debt management program.
“Forty years I spent making nothing more than minimum payments on credit cards and I finally realized I couldn’t do it anymore,” Robyn said. “When InCharge told me I could go on their program and pay them off in five years, I said ‘that nothing! Sign me up.’”
During Robyn’s four-decade run through credit card debt, she says she owned as many as 27 credit cards at a time, emptied her savings account, nearly emptied her 401k account, borrowed from relatives and used balance-transfer cards to try and keep up with the payments. She also said she cried a lot over the situation.
“I’d go have dinner with a big group of family or friends and when the bill came for $200 or $300 or whatever, I’d grab it and say ‘No problem, just put it on my credit card,’ “ Robyn said. “Then I’d go home and look at all the bills for my credit cards and start crying. I figured there was no way I was ever going to get out of trouble.”
Robyn’s problems started a month after she got the card from Macy’s. She saw some clothes she liked, but couldn’t afford, and charged them. When she got the bill, she made the minimum payment and promised herself she would knock out the rest with her next paycheck. Unfortunately, that never really happened.
She made on-time payments every month, but most of the time, it was for minimum amount due, which apparently didn’t bother the card companies. The more she used credit, the more offers she got from other card companies. She was only too happy to accept.
“They sent me pre-approved cards and I used them right away,” she said. “Some companies even sent cards and checks with a guaranteed balance. I’d pull out a check and use it to pay off debts I had with other card companies.
“By the time I was in my mid-30s, I had more than 20 credit cards and was in debt about $30,000. The only thing I could afford was the minimum payments, but it seemed like that’s all the card companies wanted so that’s what I sent them.”
Robyn noticed that the interest rate she was charged was going up almost as fast as her balance. She was paying between 24 and 29% on every card. Before long, just making minimum payments on “somewhere between 17 and 27 cards” was eating up her entire paycheck.
“I would lay out the bills on the table every month and pay half of them with my first paycheck and two weeks later, when I got my second check, I’d pay the rest,” she said.
Just not all of the rest. She carried over a balance that was so high that her sister and daughter had to help her with a few hundred dollars every month, just to meet the minimum payments. They both suggested she file for bankruptcy and start over, but she refused.
Instead, when she turned 60, she started making regular withdrawals from her 401k program. She had $68,000 in the account, but drained it down to $10,000, with all the money going toward minimum monthly payments on her credit cards. “I looked at all my bills and how much I was paying and I couldn’t see a way out,” Robyn said. “I just cried. I couldn’t eat. I couldn’t sleep. All I could do was cry.”
She responded to a flyer for help with debt and suddenly her mailbox full of promises from “credit repair” businesses.
“I knew they could never keep the promises they were making,” she said, “so I just tore them up and threw them away.”
She went online and found InCharge. She filled out the company’s online interview form and the direction of her life suddenly changed. An InCharge credit counselor sent her an email reply that included a review of all her credit card balances and a proposed budget to get them under control.
The two sides agreed to continue the conversation over the phone and Robyn got the news she never thought she’d hear: There was a way out!
She was paying $2,100 a month to cover just the minimum payments on her cards. InCharge was able to reduce the interest charges on her cards and get the payment down to $1,475 a month with a promise that if she stopped using credit cards, the debt would be eliminated in five years.
“And it only took four years and 10 months!” Robyn said. “I couldn’t believe how fast it came together. It wasn’t easy to swear off using credit cards, but in the first three years, I had knocked more than $40,000 off what I owed. When it got under $10,000, I knew I was going to make it.
“I spent 30 years working on that debt and got nowhere. Then in, four years and 10 months, I had it all paid off. You can’t believe what a great feeling that was.”
Robyn is just two years from retirement and now makes deposits of $1,475 every month into her savings and retirement account.
She said she uses a hand basket when she goes shopping to remind herself to only buy what she needs and nothing more. She doesn’t pick up the bill at restaurants anymore and is trying to repay her sister and daughter for the money they gave her. She carries one card with her, but it’s a debit card, which she funds through her bank account.
“Never again,” she said of signing up for another credit card. “I get offers in the mail almost every day and I tear them up and throw them away.
“The people and the program at InCharge turned my life around. I’ve learned my lesson and I’m not going through that again.”