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Confessing a Really Stupid Money Mistake

Stupid money mistakes. We all try not to make them. Fortunately I’ve done a decent job of avoiding them in my life.

Longtime readers know I’ve been preaching against debt and the use of credit cards since the early days of this blog. I know some people believe in their use, especially for the reward points they offer. For some reason, we were never able to get credit cards to work in that way. All they created for us was overspending.

stupid moneyDebit cards and cash became our salvation, as we learned to only spend what we earned each month. Taking that step away from credit, coupled with our budgeting efforts were big steps in moving us toward financial freedom. The journey, in the past five years especially, has been a wonderful ride, one that has allowed us to pay off our mortgage earlier than expected.

It would be easy to let my head swell and the buttons on my shirt pop with pride at our financial success. Funny how life has a way of keeping us humble. It did to me this past week when I received a curious and infuriating letter in the mail from Bank of America, informing me of a stupid money  mistake:

The letter read:

“Your above referenced account is currently past due. If you’ve already scheduled a payment, thank you. If not, your current balance is $299.56.”

Pardon me?

My Stupid Money Mistake

Confusion followed, the kind where you think you are living in Bizarro World. How could this happen to someone who hasn’t been using a credit card? I quickly dug out my old login information for Bank of America to see if I could see where the charges originated.

The initial charge of $199 was from a yearly online subscription to an investment service I had once used. When I used the service, I had it set up to automatically renew each year on my Visa credit card. I thought the account with the subscription service had been cancelled last year but evidently I was mistaken.

The odd thing was that the credit card number the online subscription service had on file wasn’t the same as the card number being charged. Now I’m really confused. How could a charge on a cancelled credit card number go through Visa’s system?

The worst part is that the charge came through in February and I never saw it. Why would I? I don’t have a credit card account (I’m thinking). So, let’s see…it’s now July. Months of interest payments on a non-paid charge had pushed the total from $199 to $299.

After a few more moments of general confusion, a thought snapped into my brain that brought a sickening feeling to my stomach. I slowly reached over and opened the desk drawer. I began to leaf through some stored paperwork I hadn’t touched in at least a year.

That search ended with one word – “Crap.” And then this thought, “How stupid could I be?”

There staring at me was a never-officially-activated but never-cancelled credit card with my name engraved on it. And then, the memory came rushing back to me.

Visa had issued new card numbers to us over worry of a security breach. The old credit card number that the subscription service had on file had indeed been cancelled but the subscription itself had not been. When it came time for the renewal of the subscription to kick in they tried to ping the old card number. Visa, realizing the link between the old and new card numbers, sent the transaction through to the new card number (even though we had never officially called to activate the new card…still had the stickers on it).

Confusing, I know and very frustrating for me, someone who prides himself in being on top of things.

I’ve had an open credit card account sitting there, inactive but active. And through my stupidity of not canceling the account it cost me.

A Stupid Money Mistake: Keeping the Card Open

It would be easy to chalk this mistake up to a simple oversight or laziness. While that might have some element of truth, it doesn’t ultimately address why this account remained active. To share with you the ugly truth is slightly embarrassing but to be fully transparent, here is what was at the heart of the issue:


As I mentioned earlier, we’ve had tremendous success with our debit card/cash payment system. For years now it’s been standard operating procedure. Thousands of times we’ve made transactions and never had an issue with using it in any situation, at any merchant, in or out of the country.

Except once…when trying to rent a car from Enterprise.

They don’t accept debit cards, not even if you choose to select the “Credit” option at payment and sign the receipt. And they don’t take cash. I didn’t know that when I booked the rental car online (it was buried somewhere in the legalese disclaimer print nobody reads). I learned all this while standing at the airport Enterprise counter ready to check out my car.

For about 10 minutes I feared I was stuck. Fortunately I went down the rental car aisle to find Thrifty who has no such anti-debit card policy. I found something with them and was on my way.

That lone situation of being stuck without a payment option – the only situation like it in five years – created so much fear we never cancelled the account. I guess we thought that maybe a credit card as a safety back up option would be something we’d ultimately revert to.

The Final Outcome of My Stupid Money Mistake

Fortunately, in the end I didn’t end up being out on $299. When I called the online company with whom I had the subscription, they unexpectedly offered me a refund of $119 for the duration of the yearly service. That amount was credited back to Visa who then routed it to my bank account. I then cancelled the online subscription service for good.

I also cancelled my Visa credit card account…for good.

You may think that unwise and that, even if I’m committed to debit card living, I should still have active credit in case of an emergency like the one I encountered. It’s a fair point. However, if I’m going to be totally committed to paying with a debit card or cash then I’m going to be TOTALLY committed. I don’t want mistakes like this to happen again and I certainly don’t want to be tempted to use the credit card again.

And I’m not living in fear any longer. For me, that’s the bigger issue.

That fear of the “1 in 10,000 chance of being stuck without payment” cost me $180. More than that, it may have cost me some credibility here, since I’ve been preaching against credit cards for over two years now. I’m not going to be a hypocrite. If I have a conviction about not going into debt to live my life, then I’m going to live what I believe and teach.

And I’m just going to be smarter. Do better research ahead of time. Forgo automatic renewals of yearly services, choosing instead to set reminders and renew manually. Investigate more deeply company policies on using a debit card before I make a commitment to their product.

I’ve proven to myself it’s possible to live a life without credit cards. Honestly, it’s not that hard. The benefits of living a debt free, controlled spending existence have proven too fruitful in our life for me to ignore. So I’m through hiding that credit card in the drawer.

Question: Have you ever been hit with an automatic charge you had forgotten about? Did you know some rental car companies do not accept debit cards? Was it unwise for me to close my credit card account? Are you afraid of ever getting stuck without a method to pay for something? What other stupid money mistakes have you made?

Image at FreeDigitalPhotos.net

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  1. Michael Steptoe says

    I had something happen with auto renewal.

    I hadn’t had my mortgage very long, and a couple times almost forgot to schedule it. So, I signed up for the auto payment. The following year our escrow changed, so the payment changed. I logged in to increase the payment, but somehow messed it up. I thought I was changing the amount of the payment, however, after getting a late payment notice I realized I was wrong. Somehow I had created a NEW auto payment, but the previous one was still active(Payment system isn’t the best). When the due date came, it pulled the old amount first, and on the same day it pulled the new amount second, which I didn’t have enough to cover. So, first payment was short, second payment got insufficient funds on both sides, and then I got a late payment because of the first being short. Fees stacked up in a hurry!

    I called, and they were nice about it and helped me out. They refunded the fees on their side, but I still had to eat the bank insufficient fee. I do not like auto payments anymore.

    As far as using a credit card. I know there are strong points on both sides. As much as fear can hold on to past mistakes, so can fear hold on you to not being able to control yourself. If you have trouble using a credit card, most likely you have trouble using money. Eliminating credit cards is a good way to avoid going into debt, but that doesn’t stop the over spending. Over and over I found myself in the same boat, even when I quit credit cards for years. I use a credit card now to pay a lot of my bills, and then budget the amount needed each month to pay that card. I have been doing this for a while to build points. It also helps if your checks don’t line up with your bills every month. I’ve built a lot of reward points up(hundreds of dollars), and I don’t pay interest. Technically credit cards can bite, but I’ve had debit cards bite too because of them being used just like a credit card. Also, Debit cards have overdraft, and some even have credit accounts tied to them.

    My goal is good credit, and no debt. You never know what may come up. You may have a problem in life that takes all your money, and if you have bad credit you have nothing to fall back on. I’ve been on a trip to go out of state before, and both our cards were killed mid trip by the bank, because they were compromised earlier that day. We only had 40$ in cash, and that was it. NO other cards. We were living the no credit card dream, and now…we are stuck. We had just enough cash to get us to the closet bank we used, and they just happened to start issuing temp debit cards for situations like this a few weeks before. This opened my eyes to the need to have something for emergencies, especially for my wife when she has the kids without me. This could have gotten really bad for us.

    I don’t want to be ruled by fear on either side. Not saying you fear credit cards if you choose to not use them. I feared loosing control with them. This is a spiritual battle. Our flesh tries to rise up one way or another. Materialism is not good, and is addicting. Spending without control is giving way to this problem, and creates a deeper issue in us. This is why money problems can follow any method or budget. The key is self control, which comes through prayer. Lord, help me.

    • Thanks for sharing Micheal.

      “…good credit, and no debt.” My goal is actually no debt and no credit (score). We have no debts and don’t use credit cards. So eventually our credit score will go to zero. We will not be borrowing any money in the future so my credit score doesn’t matter to me.

      • Michael S says

        I admire the confidence, and determination in not wanting to borrow money. Personally I still feel that it is wise to maintain a good credit score, if possible.

        The ideal thing is to never borrow, however until a person has reached a point where they have enough reserves to take care of all plausible scenarios like job loss, sickness, etc. You are possibly setting yourself up for even more hardships by burning all bridges.

        Credit also plays a role in a lot of areas, and not just borrowing Money.

        – Your Home/Auto Insurance will be higher since most are now based on credit.
        – If you move and have to setup utilities you will pay more out of pocket on deposits.
        – You could potentially be turned down by an Employer.
        – You may decide to buy a new car at 0% interest just to avoid losing all your cash up front, but can’t with bad credit. (I’ve heard of folks with plenty of money doing this like business who still use loans vs spending their own cash reserves.)

        Some are minor things, and some could be completely irrelevant to you, but if the goal is not to waste money every little bit counts, right? It doesn’t always cost money to keep a good credit score. My card reports activity since I use it to pay bills, but don’t pay any interest since I pay it in full each month.

        It isn’t very common that people are able to accomplish financial freedom without having payments on something during their life. Most people that seek help already have payments, mortgage, auto, etc. Over time they then pay things off, and save to avoid it again, or at least that is the goal. For someone starting out in life that doesn’t have a very good paying job, things are much different.

        You can technically buy a house without credit, and pay with cash. However, to do this you will have spent thousands upon thousands of dollars on renting. The only difference is there is no debt in it, but it didn’t save you any money.

        I did a quick figure on this. Let’s say you wanted to buy a house for 100,000$. You didn’t want to have debt, so you rent and save. These numbers would be different for different areas, so I will just use my area (lower cost of living).

        We will say you avg 500$ a month saved for a house. It will take 200 months or 16.6 years to save 100,000$ dollars. Let’s say you rented for 600$ a month (legitimate rent for my area). After 200 months you will have paid 120,000$ in rent. That means you will be paying 120,000 plus 100,000 for the house. That is 220,000$ out of your pocket in those 200 months.

        If you bought on a loan at 5%(poor credit) for 240 months(20 year loan) you would pay 660$ a month plus escrow at around 166/month totaling $198,230 over those months. If you added the extra you since you were not saving for a house you will have a total out of pocket of $172,550. That is $47,451 less to use credit vs cash(assuming they paid it off early, still saved $21k if they didn’t). Sure with a home you have repairs etc, but rent goes up. So to each their own. 🙂

        Credit isn’t evil, or at least not in my eyes. It’s just another tool that can hurt and/or help depending on how you view it. 🙂 Sorry for the long reply!

  2. I hate automatic payments and avoid them like the plague for this exact reason. I do all my banking and payments online but I like to know exactly when I’m paying them and how much it is bc I still like to keep track of how much they’re charging me in case of any errors

  3. Aw I think we’ve all made mistakes just like the one you’re describing. Automatic payments are hard for that exact reason!

  4. I think we’ve all been there! My recent mistake wasn’t quite so awful, but along the same lines. I had signed up for Angie’s List, which auto-renews via PayPal. I completely forgot about it of course, and my PayPal account was empty when the bill came due. The bank account linked to PayPal was also virtually empty because I have started using a different account. So, what would have been around $10 became $35 for a service I don’t even use! I was very angry with myself. Lesson learned: avoid auto-renew things to begin with, or else put the renew date on my Google calendar!

  5. I think that can happen to anyone. Personally I think that your willingness to share this situation with your readers reaffirms your credibility. I always try to avoid things like auto renewal because of situations just like these!

    • Thanks for the comment Tennille. I will be avoiding auto renewal in the future. I want to see and analyze the bill before I move forward again.

  6. I was recently hit with a subscription charge to the Wall Street Journal. I signed up for a free trial months ago because they were at a Warriors game and offered a free Warriors blanket if I signed up for a free trial. So I did, and put the cancellation date in my calendar. But somehow, the alert didn’t pop up 6 months later. I thought I was being smart for getting free stuff, but I was definitely wrong.

    • Boy, that is a classic Lisa. You forgetting is exactly what the WSJ had in mind. If only we could program our brains to have an alert pop up when we sign up for things like this.

  7. Auto annual renewals have caught me too because they are so infrequent that you forget about them. Thanks for sharing your story, Brian. It’s a good lesson learned for all of us.

    • You are right…the infrequency of them is what trips us up. Especially if we don’t have a system for writing it down and then bringing it back to our attention when it’s due.

  8. Three years ago, when I still had my iPhone, my daughter asked me if she can borrow it, so I let her borrow my phone. When my daughter asked me for the password, I immediately typed it without reading because she just told me that she wanted to download a FREE game. And later that night, when my hubs checked our money on our debit card, we were totally shocked because we had lost $180! We didn’t even know that our 4 year old kid already purchased games and even paid to unlock it! 🙁

    • Oh my…that’s really funny (probably not at the time – only in retrospect). We keep a pretty tight grip on our iPhone passwords and have disabled the Internet and app store on the kid’s iPods. There is too much out there they can easily stumble into paying for.

  9. Don’t be so hard on yourself! That kind of thing happens all the time. I accidently paid a utility to the wrong utility bill once =/

  10. I have definitely had it happen. Sometimes you want the trial, and make a mental note to cancel as soon as you get the product, but forget. I hate spending money on things that I am just taking advantage of (lol).

    • “…mental note…” Ha…those don’t work for me anymore. Obviously I have to write things down if I’m going to remember it. 🙂

  11. I don’t know about car rentals, but my Dad tried to rent a Uhaul a while back and they would only take a credit card. He had never had one up until that point. I got hit with a bill from an online legal service I used once to draw up some business documents, but they refunded my money, so it was just a waste of about 30 minutes to get the right person. I wouldn’t beat yourself up. I think it’s great that you don’t have your fears anymore and have done so well with your finances. I can’t wait to be mortgage free.

  12. Oh No! I’m sorry you had to deal with that Brian. I wrote a post a few months ago about ways you could be losing money without realizing it and forgotten withdraws was on the list! They claim it is for your connivence but that isn’t always the case! I’m glad you got it worked out and didn’t have to pay for an unused service!

    • I can see how automating can be convenient and help us not forget about bills and such. Perhaps that is good for month to month where items come more frequently. The yearly stuff probably should be put on manual.

  13. Here is my question: if the account was closed, why did Visa push the charge through? I thought the whole idea of canceling a card over a security fear would render all charges on the card void. Doesn’t seem very secure to me.

    • “…why did Visa push the charge through?” I guess because the cards were linked in that a new one had automatically been issued based on a security fear on the old one. It’s a mystery to me…really didn’t make sense.

  14. I appreciate you sharing this story, Brian. You easily could’ve kept it to yourself, but it’s valuable for your readers to know about those lingering auto-payments and how you can’t just cut it up and forget a card. You actually have to cancel it.

    I respect your decision to be credit card free, but I would never completely forgo credit cards myself. My dad had to force me to open one when I started college. My parents lived in China while I lived in the States so he wanted me to have one for a) emergencies and b) to begin establishing credit history. When I lived in Japan and China they were both very cash-based societies, so the idea of using plastic seemed very strange. I disliked not immediately seeing the money leave my bank account. But after four years of only charging what I could afford and paying it off in full, I graduated with a 720 credit score which helped me get my first apartment. Mostly, I’m grateful my Dad took the time to explain how credit cards worked and how much damage I could do by racking up a lot of debt.

    These days I like taking advantage of rewards and like the comfort of having an “in case of emergency” card with a low interest rate. But, it does 100% come down to knowing yourself and if you know that you’ll end up in debt with a credit card, then good for you to remove the temptation.

    • You’re welcome Erin. I felt a big sheepish sharing it. Seems like this has happened to many people though so perhaps lending my voice to the choir will help others avoid it.

  15. I feel your pain, Brian. An auto-renewal subscription got me once as well, and I was so mad at myself for not remembering to opt out! I have reminders set, but I guess I had snoozed it, and completely forgot. I’ve taken the reminder route now, and opt out of all auto-renewals. I’m glad you didn’t have to pay the full $299 at least. I would have been upset that Visa issued the go-ahead when I hadn’t activated the card, even though it makes sense as to why they did. Definitely something to keep in mind.

    • “…when I hadn’t activated the card…” I think that is what ultimately tripped me up. I remember thinking, “Hey, I’m not activating this card so nothing can be charged against it.” Guess I was wrong.

  16. Oh man auto renewals…they get you every time. Unless you are the most super organized person in the entire world, it’s so easy to lose track of that kind of stuff. Don’t beat yourself up about it. It probably has happened to everyone. Not sure about the rental car thing as I don’t do it that often.

    • I won’t be doing auto-renewals again. Too much can change in a year for me to know whether or not I’ll want to automatically renew that service.

  17. I completely respect your decision to use only debit and cash as it works for you and that’s the most important thing. We do use credit cards and overall have been able to stay on budget. You are right, for whatever reason, credit cards for some individuals are like catnip and a gateway to overspending. And it’s good that you recognize that it could be an issue for you. I admit that I don’ know if I could ever go completely without a credit card for emergency purposes, although I do agree that more places are accepting debit cards, so it’s probably not as difficult as it may have been just a handful of years ago. And yes, I’m sure that I have forgotten to cancel a subscription or two and got stuck paying for an extra year. 🙂

    • The stigma of debit cards being unsafe is going away I believe. If used properly, they afford all the same protections as a credit card. We’ve never had an issue, save that one time with Enterprise. If I would have known ahead of time of their policy, I never would have booked with them.

  18. Alicia @ Monster Piggy Bank says

    I have been wondering about this kind of situation. Thanks for sharing your experience!

  19. Thank you so much for sharing this, Brian. I think it’s easier to listen and connect with people when they share their mistakes. And you know that I’m totally on board with you and your views on credit cards, so I think it was very wise of you to close it!! It’s definitely the better way to go in my opinion.

    • “…share their mistakes…” We are not perfect creatures by any means. Even those of us who seem to have it together still stumble from time to time. Hopefully this will be my last stumble with credit cards. 🙂

  20. I have been hit several times with charges for services that I have actually canceled. The biggest offender is GoDaddy.com. They switch back on the auto-renew feature that I have turned off. They seem to know this too. I always get refunds when I call to complain. I would cancel them completely, but it would be such a big problem. Beware of auto-renewals. They can cost you!

  21. That sucks and I know that sinking feeling all too well. At least you were able to figure it out in time before it hopefully put too much of a knock on your credit score. That would be the thing I’d be most afraid of.

    • “…knock on your credit score.” In the short-term that is frustrating but over the long-term probably not too big a deal. My credit score will eventually go to zero if I keep using debit and cash only. I don’t plan on doing any more loans for the rest of my life.

  22. I didn’t know that some car rental companies did not accept debit cards, but more so I know that some companies do not accept certain types of credit cards. I try to use my Discover for just about everything, so when I know there are a number of places that don’t accept it.

    That sucks to hear about the unknown charge as well as the interest and late payments adding up. It’s the kind of mistake that could happen to anyone, though, but I’m sure it still stings.

    • “…I know there are a number of places that don’t accept it.” That was our issue with Discover as well. We used that exclusively years ago but also had to have a back up Visa card to use for when Discover wasn’t accepted.

  23. I once had this happen to me a few years ago. I have several credit cards, but I have one that I haven’t used since I was 18 (I charge a $5 purchase on it each year to keep it live). One day I checked out this credit card’s account balance online just to see since I haven’t looked in months. I had a $50 balance and I was extremely confused. It actually turned out to be a scam subscription service and I guess they charge random cards in hopes that no one would notice. Luckily I did!

    • “…charge random cards in hopes that no one would notice.” Wow Michelle, I’ve never heard of that. Doesn’t surprise me though in our “scam-a-minute” world.

  24. I can understand the frustration Brian, as I’ve done this very thing before although it was on an active card. That said, I think you’re being a little hard on yourself. 🙂 When I worked at a bank I saw this all the time and the crazy thing is that it usually set the person on some financial hurdle they then had to jump because they couldn’t afford it.

    Yea, I knew that some rental car companies don’t take debit cards. I understand it on one level. The last thing I’d want is to have something happen to the car while renting it and them have access to my account. With the credit card you get some level of protection. But, I still think it’d be nice for them to offer debit card as an option.

  25. Meh… I think you’re being too hard on yourself! Simple mistake, and you even got a blog post out of it!

    The only thing I’d add is that: 1) Be aware of the blocks (holds) that are placed on funds in your linked account when you rent a car with a debit card and 2) Some agencies will run a credit check on you when you rent with a debit card.


  1. The Weekly Quick Hits Roundup | Personal Finance Tips says:

    […] Brian from Luke 1428 also had a confession in Confessing a Really Stupid Money Mistake […]

  2. […] Brian from Luke 1428 also had a confession in Confessing a Really Stupid Money Mistake […]

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