It is time to burn bras; oh, I mean credit cards in protest. Mary and Bert Peterson’s story is probably like many Minnesotans story. They fell in love, had kids, and worked real hard to make a good life for their family. The housing boom hit Cambridge around 2005. It was the fastest growing county in Minnesota during that time. The infrastructure for the community was expanded in huge measures with water, sewer, sidewalks, and roads being replaced or made new. Everyone was getting a new home because credit was easy.
New houses and complexes were being built all over the city and county. The City of Cambridge even got into the housing development business. The State of Minnesota sold the City of Cambridge a huge parcel of undeveloped land in the middle of the city extraordinary set of circumstances in city growth. The parcel was used for a driving range for golf in the 90’s run by the State of MN. The rest of the acreage had been used as a State Hospital and was now deemed caput. Beautiful land running parallel to the Rum River was now open for development and being sold to County and City governments dirt cheap. Many people wanted the City to put a much needed community center on this lovely property but they forsook common sense and went into the real estate business with the rest of areas frenzy for building. Now many of these houses are in foreclosure as week after week in the local paper houses are lost in this area of the city. and half of the development sets vacant. The housing boom has stopped in Isanti County and Cambridge much to the hardship of its citizens.
That is where Mary’s and Bert’s story comes in, they was told they now could afford one of these lovely houses in Cambridge in 2005 with terms of not much money down, this was a dream come true for their family. They loved the new house, never did they have such a nice place with so much room for all 5 of them. Nobody in their family took anything for granted after they purchased this house and they all pitched in to keep their dream afloat.
Credit cards were offered to them to help them with their dream. They got a few drapes, a new couch because they really didn’t have one before, beds for the kids all the things to start out in their new home, not extravagant but sensible. In the interim, Bert got sick and had to have heart surgery in 2007. His job was secure, but there was a long recovery time and many prescriptions and doctor bills that put them into more debt than expected.
All the payments in Mary’s and Bert’s household were being paid. It was a tight stretch but they were making it. Then the housing market crashed in 2009 and the value of their house was now flip flopped. They felt it would come back and they would stay put because they loved their home and they were settled.
Most of their credit cards were at 8-9% which they thought was fair. Then Mary and Bert started getting raises on the interest rates on their credit cards and the lines of credit they acquired when Bert was sick. Now they were at 15-16%; okay that is the way it goes and they would try to pay it off faster. They stopped using their cards, and sent all their payments in on time. Now they got a late notice because of processing on the companies end took 5 extra days, thus a rise in interest occurred. Now they were told what a bad risk they were even though all obligations were current and they paid even more than the minimums requirements.
Mary and Bert sent letters to the companies, made phone calls and were directed to foreign call centers where the answers were vague and of no help. Monthly the rates were accelerating into the stratosphere; 21 to 29% was being accessed routinely because they had credit. Still they paid, with a third of their payments now being interest. Spinning and going nowhere.
The inevitable job lay off hit this family. They looked at the dilemma; flip flopped house mortgage, do they walk away from the house or credit card companies, do they default on them with their ever increasing interest and demands? They saw others on the news shows protesting the credit card companies. “Why don’t they just let us pay these bills at a descent rate and we could still afford to pay our debt. What sense does it make to choke us so we can not pay these bills? Something’s not right here,” Mary surmised in dismay.
They saw the bank bailout in 2009 and Mary and Bert decided to bailout on their credit cards. The bra burning or credit card burning was implemented. Mary uses the word “Shylark’ many times when she talks about the banks referring to the Shakespearean character that wanted an unreasonable pound of flesh for a debt. Bert likes the reaping and sowing concept of the Bible and feels the banks should have extended the mercy given to them. My friends say this with hurt in their eyes about the attempt they made to improve their lives in a once endorsed credit culture that is not there anymore. Mary and Bert are still trying to stay afloat, I wish them well.