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I wrote a post yesterday, commenting on Congress’s decision to inquiry into the practices of the Banking and Credit Card industry. In the article I posted a link to a story on Yahoo in which Citibank came under fire. I was glad to see the heat, because I have a Citibank credit card and they are charging me loan shark rates because I was late once 9 months ago.

I have called almost every month to see if they can reduce my interest rate. The answer was always “no.” For the last 9 months I have paid their high interest rates and paid more than the minimum. So after yesterdays news broke, I decided what the heck I will give them a call today to see if I could get my rate lowered.

To my surprise when I asked the customer representative he said my interest rate was “too high” and he would definitely reduce my rate. 10 minutes later my interest rate was cut in half. Thanks Congress for putting the heat on! Even though Congress has not legislated the credit card industry, at least it has changed the attitude of the bigger card companies.

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Congress is taking the credit card companies to task over fees and interest rate practices. Sen. Carl Levin, Chairman of the Senate Homeland Security subcommittee, said an investigation by his panel found “abusive” and confusing practices by credit card companies that can increase financial pain for many families.

What Sen. Levin is doing is trying to get the credit card companies to take action on their own. They would be smart to take action because the last thing the banking industry wants is congress to start legislating their business.

Citibank has already made changes in their fees and interest rates to make a good show to congress.

Read more here

All American families who carry credit debt appreciate the effort of Senator Levin, but let’s hope this is a first step in getting real control of the Credit card industry. Debt is not good for America. When Americans are strapped with debt they can spend less on the economy, their quality of life suffers, and we also know the number one cause of divorce is finances.

Stay tuned America. Let’s hope this congress goes to battle for us. Until then keep paying of your debt!

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So a co-worker of mine mentioned that February tends to be a slow month for retailers because most Americans are recovering from the “hang over” spending they did during the holiday. Credit usage during the holiday is as much apart of the holiday season as the Christmas tree itself. This is unfortunate.

I say this because our family used to be one of the millions of American family’s who bought gifts that weren’t in the budget and relied on Credit to get what we wanted. This year 2006, would be different. We had a game plan. Start saving early and start shopping early.

The game plan, put $50 a month aside for Christmas. In theory we would have $600 to spend on gifts. We tried to look for “deals” through out the year, particularly at Costco. We started buying gifts in late summer. By the time December rolled around we had 95% of our gifts purchased! And it was all done with cash no credit!!

What did we learn? Reduced stress by planning ahead. We didn’t go into debt for the holidays. Established a game plan for next year, which worked. We already have a couple things we want to buy at Costco next week for Christmas gifts.

This post wasn’t meant to be we are better than you at all. In fact we are just like you but this year we really wanted to make a change, which started with a spending plan. This rolls into the biggest part of having good credit, create a livable budget where you can afford to pay off debt and not just pay the minimums. This allows for timely payoff of credit and fosters responsible spending.

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I heard Dave Ramsey say this on his radio show today. He then followed the comment with “credit cards are the symptom of someone not being able to say no…” This remark was in regards to a caller, so don’t take this as blanket statement about credit card usage.

What he is saying is some people believe they deserve what they want when they want it even if they can not afford it. With these types of people credit cards enable them to get things they want and pay later. The cost over time is a huge debt.

My generation has grown up in an incredible time of convenience, prosperity and wealth. This environment has helped to bread our “want it now” at what ever cost attitude. I think about my grandfather who passed away 15 years ago and if he saw how my generation treats money he would roll over in his grave. He would be ashamed of some of the financial choice I have made in my past.

It’s about responsibility and self control. So before anyone jumps on me as someone who is preaching a frugal life style, this is not the case! If you want a new truck/car save for it or at least a big down payment. Do you want a tropical beach vacation every year? Well give up your daily Starbucks coffee and save the money for your vacation.

It’s about choice and I choice to live debt free.

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