Today I was checking my free credit scores and reports (Here's how to check your credit for free) to make sure all was OK with my credit situation, when I decided to look a little deeper at my credit report. I wanted to take a jog down memory lane and see just how much debt I have incurred over the years, what those debts were for, and how long they took me to pay off.
What loans have I taken out, and what lines of credit and credit cards have I used?
If nothing else i thought that this exercise may remind me of just how much spending I've done over they years, much of it unnecessary.
What Debts Have You Had?
When I opened my credit report from Experian (the credit agency I'll be using for this post), I see a total of 15 different real estate or car loans, credit cards and other credit accounts. So what accounts were they? I'm thinking that's probably less than the average family.
Real Estate Related Accounts
I have 3 real estate related accounts on my credit report. Two are associated with my current home – once when we bought the home and once when we refinanced. The other was a home loan for our townhouse that we bought when we were first married.
- Bank of America: Current mortgage and our only debt.
- Mortgage 2: Paid and closed upon refinance.
- Mortgage 1: Paid and closed upon sale of our first home.
Credit Cards And Other Revolving Accounts
I've had a total of 7 credit cards or other revolving credit accounts. Of those 2 are currently open and 5 are closed.
An Experian marketing insight study shows that overall, consumers had an average of 5.4 open credit cards. So we're below the average with our 2 open cards. To be completely honest, one of the open credit accounts is a JCPenney card we opened a couple of years back when buying a bunch of furniture to save 15%. I used that card once, paid it off and cut it up. I forgot to close the account and keep forgetting to purge it every time I check my credit. Here are the accounts I've had.
- Chase Cash Rewards Mastercard: My only open credit card. We don't use it very often except for some trip reservations, renting a car and a few other high ticket items because of the extra protection and insurance the card gives. Zero balance.
- JCPenney Store Credit Card: Opened to buy some furniture and never canceled or used again. I've still got to cancel this card. Zero balance.
- American Express Blue: Amex card that I got while I was in college and only canceled a year or two ago while taking the Dave Ramsey FPU class.
- PayPal Credit Card: I honestly don't remember having this credit account, but it is closed now and wasn't ever really used. It must have come with my PayPal account or something?
- Sears Store Credit Card: I believe I got this card while I was in college and buying a TV in order to save 10%. Used once and then canceled.
- Chase Visa Card: Another credit card opened during college for a free t-shirt. I had the card (and used it!) for several years before wising up and canceling.
- US Bank Line Of Credit: Line of credit at our old bank.
Installment Accounts Including Car, Boat, Student Loans
I've had another 5 loan accounts over the years for things like cars, student loans and a wedding ring. I think this number might be quite a bit lower than a lot of families as well as I've only purchased a couple of cars using a loan, and had one student loan.
- Topline Credit Union: 3 year car loan that was paid off early. This was my last ever car loan.
- Chase Automotive Finance: 3 year car loan paid off in 2 months. I got the loan, and then paid it off fast after getting a loan with a better rate (see above).
- US Bank Auto Loans: 5 year car loan paid off in 3 years.
- Jewelry Store Financing: Buying my wife's wedding ring. 0% interest over 1 year, paid off in 1 year.
- US Department of Education: 10 year student loan, paid off in 6 years.
So there it is, that's the extent of my credit and borrowing since I turned I turned 18, so many moons ago. If you add up the total amount of credit used or loans taken out across all 15 accounts, the total comes out to well over $600,000. Of course the actual total is much lower than that since we never had to fully pay off 3 mortgages. Still, that's a lot of loans and credit, and interest paid.
What Could You Have Done With Money You Paid In Interest?
While we feel pretty good with where we're at today in our financial lives, looking back over the amount of credit and debt we've used over the years is really eye opening.
What could we have done with all that money we spent on interest and credit over the years? Would the amount we paid on credit total up to a nice nest egg for your retirement? How much could that money have turned into had we invested it at 25 instead of getting used car loans and using credit cards and paying a ton of interest?
How about you? How many credit cards, real estate and other credit accounts do you have on your credit report? Does looking at your credit report make you realize just how much money you've spent over the years on principal and interest?