Saturday, August 23, 2008

American Excess

By the spring of 1991, (two years after graduation), I had accumulated 3 Visa cards, two Mastercards, and a Discover card. Along the way I had also picked up a Sears card for "household" needs, a Structure card for "clothing" needs, a Firestone card for "auto" needs. Still, I was missing something. The concept of the American Express card was ultra-sophisticated. They did not put a credit limit on your purchases, because they simply trusted you to pay the bill within the 30 day billing cycle. Here was a way, I thought, to put everyday purchases on plastic, not use my cash, pay one bill at the end of the month, and not put anything trivial on my regular credit cards, each of which was at least 30% or more charged towards the available limit. If I used the Amex for trivial items, I could just use the Visa's for meaningful purchases and it would make more financial sense. So I got an Amex green card.

The circle of credit card life was now complete. The feeling of accomplishment, of financial achievement, of raw, unbridled purchasing power was an incredible ego trip. No one else in my family could boast this level of financial prowess. I had really done well for myself.

It was hard to imagine where to go from here. Most of the slots in my extra large wallet were now occupied. It hurt to sit down, but I could come and go and do whatever wherever I pleased.
I was now managing debt so well, I received my first ever card upgrade. Well, this was special!

It was right about this time when I began to feel a twinge of nervousness about the whole credit scenario. I mean, if I wasn't careful, I could "charge" on two Amex cards quicker than I was using the other credit cards in my arsenal. Having to pay the whole American Express bill at the end of the month was a tad inconvenient, until I discovered a little feature called the "Sign and Travel" account which actually let you put validated travel purchases on a separate part of the account and pay over time. This meant that I could buy plane tickets and rent cars, and NOT pay the bill completely at the end of the month, but rather "over time", much like a Visa or Mastercard. I decided that the American Express cards would be reserved for my "travel" needs. American Express, decided to make that whole thing even easier for me a couple of years later when they converted the "Sign and Travel" Account to an actual new card. Yep, you guessed it:

If any of this is beginning to sound absurd to you, you're right, it was. But it didn't seem that way to me. I was still pretty frugal in my mind, letting cash build up in my checking account and paying only minimum payments on each card. This was "managing" my money... or rather managing my accounts. I did not mind the routine of collecting the mail, dutifully filing the bills, writing out the checks, putting on the stamps, and mailing the bills each month. Except that now the list of bills I paid was over 12 or 13 different items, not including rent and utility checks that I also wrote. More and more of my monthly income was now being paid out in bills. As much as I liked spending, I began to realize that I hated writing checks more...

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