Fingerhut and High Finance
My grandma was 88 years old and living alone when she did what so many other old people do. She fell and broke her hip. Or maybe her hip broke, and then she fell. The order never seems clear.
Regardless, she was laid up in the hospital for weeks after, and I had to take over paying her bills. She’d had the foresight to put my name on her checking account, as Power of Attorney, so all I had to do was sign my name on her checks, and append the signature with “POA.”
So every day, I drove to her house and picked up her mail, and opened up all the bills and paid them. I was pleasantly surprised. The old lady had been doing a pretty good job of keeping up with her utility bills, as there were no late charges. But then I opened an invoice from Fingerhut.
Fingerhut is a company that sells all kinds of odds and ends, by catalog. They allow customers to buy on credit, at “low” monthly payments, and they tout these payments as a way to build one’s credit history.
My grandma bought little gimcracks and whatnots from Fingerhut, from time to time, so I expected her bill to be about $50 to $100. But when I opened the statement I nearly fell out of my shoes. Her current charges exceeded $800.
This seemed nuts. I figured there must be some mistake. So I studied the bill carefully. Apparently she’d been carrying a large balance, from month-to-month, with interest accruing at about 29%, and with additional penalties for always making late payments. And all this for about $200 worth of merchandise she’d originally purchased, months before.
Grandma didn’t have enough in her checking to cover the charges, and I assumed that this must be why the balance owed had grown so large. Somehow things must have gotten out of hand, and she’d been trapped in the predicament of having an out-of-control, runaway credit balance.
The charges exceeded what remained in her checking account. But I remembered that Grandma had about a thousand dollars in her savings account. She’d been slowly accumulating that nest egg to give to her drunken bum son, who lived in northern California. Well I was in charge now, and that drunken bum would just have to sober up and smoke a few less cigarettes.
My Power of Attorney extended to her savings account, so I transferred most of the savings into her checking, and then wrote a big check to Fingerhut, to pay their bill off. Now Grandma was freed from usurious interest rates, and there would be no more late-payment fees.
A few days later I visited her in the hospital, and proudly explained what I had done. I figured she’d feel relieved and thank me for freeing her from all that debt. But boy, had I miscalculated. Granny hit the roof!
“What?!” her eyes bulged as her head came off the hospital bed. “I didn’t want that paid off! I’m trying to build my credit rating, and the way to do that is to carry a balance and never pay off the account! Now you’ve ruined everything!”
Damn, was she fuming!
“I never told you to pay off my Fingerhut bill!” she ranted on. “Now how am I going to get a good credit score?”
“Grandma,” I protested, “that is not how to build your credit rating. You were being charged late-payment penalties, and that lowers your rating. You build your credit by always paying off your bill, not by carrying a balance or being late. Besides Grandma, why do you need a high credit rating? You don’t drive, so you won’t be buying a car. You rent, and you’re not planning to buy a house. So why do you want a high credit score?”
“You don’t understand,” my grandma pouted. “You don’t know anything about credit, and I never told you to pay off the bill!” She turned her face away from me and glared at the wall. This meant the conversation was over. Whenever Grandma got mad at someone, she would refuse to speak to them. And she’d do her best to pretend they didn’t exist.
This was not a sign of dementia. No, she’d handled conflict this way all her life. Her poor husband, my grandfather, sometimes endured her silent treatment for months on end. No wonder the poor bastard died at age 68.
This left my wife as the only line of communication between grandmother and grandson. So my grandmother explained to my wife something that her idiot grandson apparently was unfamiliar with. And that was, the art of high finance.
She pointed out that she was old. So obviously, she was likely going to die soon. But if she had a good credit rating, she could qualify for all kinds of credit cards and charge them to the max, while living high off the hog. And then after she died, the credit card companies would be left holding the bag.
Grandma had always loved to party, and she intended to spend her last days partying hardy while living like a queen. Debt be damned.
After the hospital discharged her, she moved in with us for about a month, until her hip convalesced enough for her to return home and resume living on her own. I was trying to make amends, so I promised my grandmother that I’d pay for all her groceries while she stayed with us, at no charge to her.
“Harrumph,” she replied.
Then she began going through a gallon of milk and 6-pack of beer, every three days. And she ordered up all kinds of expensive food from my wife, who did all the grocery shopping. She went on a big eating binge. And she explained to my wife that this was her way of recovering all that money her idiot grandson had wasted, paying off her Fingerhut bill.
This is the latest installation of my eight-part series, The Queen of the Silver Dollar. Come on back in a few days for the next installation, entitled, Chapter 6: A Vacation With Emma. Click here to read the last installation. Click here to start at the beginning.