Money Saving Tips: The Laptop That Doubled in Price
- Train Wreck Tuesday
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I got into some bad credit card debt, making bad decision after bad decision that seemed like a good idea at the time and paying no mind to my future. I really I wish someone had given me money saving tips these back then. About two and a half years ago, I was issued a credit card with a limit of $1500 — five times as much as the current card I had that I used for gas or groceries or whatever and always paid off at the end of the month. For a year I had been trying to save up to buy a laptop computer, with it just never quite panning out. I decided, then, to get my laptop with this new credit card, under the assumption I would pay it off in about four to six months.
As it turns out, about three weeks after I bought the laptop a lot of stuff in my life changed, I had to move 3000 miles across the country with no real job prospects at all. I ended up jobless for about three months, unable to pay the credit card company anything. I finally did get a job, but it barely got me by financially and I still couldn’t really put a dent in my credit card bill.
This went on for about two years, never making enough money to pay off my bill. Since then, I’ve racked up an additional $700 in over-balance fees and late fees. Today I’m finally getting into a comfortable place financially, and I’m paying this debt back in large chunks. All of this, though, has taught me a very important, yet very expensive lesson about credit cards. My $1000 laptop ended up costing me over $2000 as well as two years of stress and harassment from the credit card company.
Lesson learned: If you need to borrow money to buy something, chances are you can’t afford it, and should not buy it. The best way to know if you can afford it is to use a free online financial calculator and do the math. That is what I live by now. I hope to be able to get another low-limit credit card like I had previously, for gas and groceries, because it was always easier to plan on that $300 as a fixed amount. My credit is so messed up right now, though, that I don’t know if I will ever get another credit card.
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i feel your pain… i bought a special edition imac years ago while in credit, msrp was 1600 but i ended up costing me over 2200
I think there is an even bigger lesson to learn. You can’t let the limit of your credit card be your guide for how much money you can spend. Just because you have the credit available doesn’t mean you should let yourself have it at your disposal.
The reason I say this is the following line from your post above:
“I hope to be able to get another low limit credit card like I had previously for gas and groceries etc because it was always easier to plan on that $300 as a fixed amount…”
The thing that has worked best for me is treating my credit cards like a debit card. I allow myself to use it if and only if I know I will have the cash available to pay it off at the end of the month. In other words I am setting my own credit limit. If you have a card with a $1500, but know that you can only afford to repay $300 monthly then keep track of your spending and set your own credit card limit at $300. It’s not easy, but after learning the lesson you already did I bet you can do it.
[...] was Train Wreck Tuesday over at Mint. An anonymous reader sent in their story about The Laptop That Doubled In Price. The lesson learned here is that if you need to borrow money to buy something, you probably [...]
I’ve seen a lot of train wreck and many lesser crashes. Poor credit scores is like so many other situations where once a person gets into a problem, the avalance just seems to keep building. I like the comment about using the CC like a debit (formaly known as a check book). Maybe that could be a suggestion - go back to the check book. When you have to fill in the blanks and flip back to the checks already writen and when they were writen in the “register”, it may slow down the ‘got to have it’ impuses. If you have little or no credit there does not seem to be any way to correct it and the time it takes is very unfair. I have great credit & work hard to keep it that way. I bailed a friend out of their headache 4 years ago. They’ve gotten their score back up and with some coaching has gotten things but also has a great job and an even greater pay off plan. The thing is that they had to get a good score reestablished and now paying off these new things strengthens it. Maybe these new P2P style loans will allow others to have a ‘family or friend’ get them started on a new life. Otherwise the Catch 22 never has an end.