When the credit card companies notified me that they were increasing my rates to 30%, they gave me two choices: I could accept this highway robbery or close the accounts at the current interest rates.   So I closed out the accounts.  Only later on did I learn that this is classic “damn if you do, damn if you don’t” situation.

I couldn’t afford to accept the status quo with the new rates.  Turned out I couldn’t afford the closed accounts when the interest rates stayed the same but the minimum balance payments doubled or tripled from before.  Paying these outrageous amounts wasn’t in my best financial interest after being out of work for a year and I no longer had any savings.  So I restructured my budget to pay my credit card bills 90% less than I was paying before the rate increases.

What comes around goes around.

After I closed out those accounts and started making reduced payments, I got an American Express card after I read that charge cards were coming back in style.  What did I use my charge card for?  Paying off all my monthly utility bills and expenses when they came in, and then paying off the entire balance a few days after the billing statement close.  This saved me some money since I wasn’t paying late fees because my cash flow often didn’t match when the bills were due.  Very convenient.

Unfortunately, American Express requested my credit score and canceled my card based on that.  Turned out that closing those credit card accounts and reducing payments by 90% had adversely affected my credit score.  I also spent twice my usual amount this month since my car needed repairs and I got some stuff for Dad after he was released from the hospital to stay at my place.  All of which I was reimbursed for by Dad.  I was now a credit risk to American Express.  Never mind that I had used my card responsibly and made prompt payments.  That doesn’t count.  Funny how I thought universal default was outlawed in the recent credit card reforms passed by Congress.

I’m not sure what I want to do next.  If I reapply for another American Express card and get approved, I would have to pay a $25 USD reinstatement.  Uh, no.  My card shouldn’t have been canceled in the first place.  I’m not going to pay an extra fee for the privileged of being screwed over.  I would’ve kept my credit card accounts opened if I wanted to be screwed over.  I’m still waiting to see if this same nonsense will happen with my business credit card that was opened under my Federal Identification Number.  If so, I will be out of credit cards entirely.  Cash will be king in my life.  Thanks to the Great Recession and the greedy credit card companies, that might be the best thing to happen to me.