I work in real estate and constantly hear about investors buying with all cash. I also hear a lot about people walking away from their homes through foreclosures or short sales (not that they always get away free and clear). But lately I have been hearing about people walking away from their credit card debt. After all it is unsecured so they can't even go after any of your assets for it (right????).
But what about your credit score?
My answer to that is "what about it?"
I have spent the last 10 years obsessively working on my credit score and it has always been in the 700's. I have used a company called
Privacy Guard where I can use the services for free for the first 30 days and then I just have to remember to cancel during that time or it is $16.99/month.
However, over the holidays I was out of the country and was delayed for a week due to weather. Because it was weather related the airline would not compensate for hotels, rental cars, etc and we ended up overdrawing our checking account due to the unexpected expenses.
Meanwhile, my Bank of America credit card was due to be paid through my Bank of America auto pay system and it failed because we were overdrawn. The account was behind before we left (holidays = no money in bank) and so this now made my account ALMOST 60 days late. ALMOST, not OVER 60 days late. Bank of America reported this to the credit bureaus and my score dropped from the low 700's to the MID 500's!!!! So 10 years of good credit and paying on time and one time I am late over 30 days and my credit score drops that far?
I spoke to a friend who is a mortgage broker and he said he has clients who filed for bankruptcy two years ago and their score is in the 600's. WTF!!!!
This credit score issue really infuriated me. I called Bank of America and they told me that they are obligated by federal law to report this to the credit bureaus so that there is nothing I can do to remove it. They also said I have no right to dispute it because I was late. It wasn't a bank mistake, it was my fault... well, it wasn't... but I'm not fighting that battle. I don't have the time to spend on it, I work in real estate - if I'm not working, I'm not making money.
So then I hear a story from a friend in real estate who was pissed off at Chase bank because they did some shady things to their interest rate and raised it out of nowhere and told them that the only way to opt out of this was by closing their account (which will drop your credit score)... so either way you are being punished. Whether it's by paying more interest on your credit card or closing down your account.
So they decided not to pay anymore. It was very hard for my friend because she has been taught her whole life to do the right thing. Her husband, however, was fed up and wouldn't budge. So she said everyday they'd get the calls from the 800# and her husband would pick up the phone and say "I'm sorry we have no money we work in real estate". He would say this to them every time they called. After a few months Chase negotiated with them and they only paid a portion of what they owed.
It is hard for me to even think about doing this because I have spent 10 years obsessing over my credit score. But this debt is unsecured which means they can't go after my home for this debt. My credit score has now gone from "great" to "poor" overnight for one mistake and so what do I have to lose?
To add more "fuel to the fire" I call my credit card companies and explain all of this to them and tell them that I want to do the right thing but what incentive do I have to do the right thing when my credit score is crap now?
So they send me to their hardship department and they explain to me that I have to show them proof of income to qualify. I explain to her that I am not making any money right now and my husband is not on a steady paycheck either - we are both self employed. She then tells me I do not qualify for the hardship program. So, you're telling me that because I don't make a steady income I don't qualify for your program to help people that are having a hardship? Again, WTF????
I then call back my credit card companies to talk to them about lowering my interest rate. I explain that I have always recieved 0% offers in order to move my debt around to avoid paying high interest, but all those have stopped coming (even when my credit score was still great) and that I am now paying 20% interest on my cards. I tell them that I have no real incentive to pay my debt now that my credit score has tanked and I don't qualify for the hardship program but that if they lowered my interest rate I'd at least feel like I wasn't getting screwed by the banks. I get told that 20% is the lowest APR they have and that they even though my accounts are up for re-evaluation (whatever that means) that I don't qualify for an interest rate reduction because I'm paying the lowest interest rate available. YEAH RIGHT.
I start thinking of all these investors with cash who don't have to show their credit score and get to buy these incredible investments that are sometimes selling for $50,000 (this is in the San Francisco Bay Area!). I also think about these people who are staying in their homes and not paying their mortgages and walking away from their homes and freeing themselves of hundreds of thousands of dollars of mortgage debt. Or people who I know who have just recently filed bankruptcy and are so happy they did - they feel free and able to start fresh.
THEN, I
see this video and this puts me over the edge. Why am I even paying these big banks anything when they are screwing so many people? I am in a position where they are screwing me but why am I letting them? Because it's the right thing to do? Are the banks doing the right thing? Do they act morally or ethically? Or are they doing what makes them the most profit? What do you think?
So, I have decided to stop funding this corruption and giving my hard earned money to these big banks who are not willing to help me in any way, they've fucked up my credit score, they wont lower my interest rates, they wont help me with their hardship program. They are not trying to work with me, they are working against me.
I am going to start doing what is best for me and my family - I am putting us and not these screwed up banks first. I am not paying them another dime and I am pulling my money out of Bank of America where we hold seven accounts and I am putting my money into my local bank which is owned by local people. I am paying for everything with cash and I am not going to worry about my credit score because cash is king - fuck credit... that's the biggest problem this country has is credit.
I got suckered by a bag of M&M's being offered by a credit card company at my college in 1997 and signed up for my first credit card at 18. Here I am at 30 still paying for those fucking M&M's! As far as I am concerned, we have all been victimized by these banks in some way or another and they continue to find ways to screw us and profit from us and I'm not going to wait around for the government to do anything about it, I'm taking it into my own hands now.
