Home > Personal Loans > The Best Money I Ever Borrowed

Comments 0 Comments

What’s the best money you’ve ever spent? Research shows that for most of us, money spent on experiences generates the most happiness. But is that worth borrowing money? In some cases, the answer may be yes. We asked people what was the best thing they had ever bought with credit, and got an array of answers (interestingly, no one remembered a car loan fondly). Following are three very different uses of credit, all of which make a really good story years later.

A Master’s Degree — in Paris

Sherry Smith bought a year to study in Paris, getting her master’s degree in 2006. She had a bachelor’s degree in fashion design, a line of work she had decided she didn’t enjoy. “I felt like I was on a hamster wheel,” she said, “moving but not getting anywhere.” She thought getting a master’s degree might help, though she hesitated to make a big investment that might or might not pay off. In addition, she lived in New York City, where getting a master’s degree could easily put her more than $100,000 in debt.

Sherry Smith

Sherry Smith

Then, on vacation in Europe, she realized she wanted to stay longer, and she felt the experience of living abroad was worth borrowing money for. If she could manage to get a master’s degree while overseas, that would be best of all. She settled on living in Paris and began researching her options, finding an English-language program in business communication. She still hadn’t figured out exactly how she would pay for it.

She emptied her 401(k), which had about $10,000 in it. She had talked to the program administrator who warned her of the early withdrawal penalties but also told her that her situation — going to school and not working for a calendar year — would mean she would not have a tax liability that year. “Unfortunately, there was no way I could get a traditional student loan, and personal loans had ridiculous interest rates,” she said. “The light bulb over my head lit up when I received a cash advance offer in the mail. I knew it was risky, since the interest rates can skyrocket when the promo period runs out, and one late bill can put you in the 25% APR category for every single card you’ve got, but it was that or nothing.” She took the risk, and spent a year living near the Louvre.

She knew she was playing a dangerous financial game, and she kept a spreadsheet so she would know when a promotional rate ended and money was due, sometimes taking another low- or no-interest offer to pay off a card that was about to raise the interest rate. She knew she couldn’t afford to pay late even one time. “I feel like they should give me an MBA just for figuring this out,” she says with a laugh.

The risks Sherry took had a happy ending. She returned to New York without a job, but soon found work as a freelance consultant. Now she is working in her field, business public relations. She repaid all her loans in about four years, at an average interest rate of less than 5%. Her 401(k) has long since been repaid, and she contributes the maximum to an IRA as well. She says she pursues high-risk investments hoping for big rewards. In the years since she returned from Paris, that strategy has worked well.

An Engagement Ring

Randy Brunson of Atlanta borrowed far less than Sherry did, and his “experience” is continuing. In 1975, he was a broke-but-in-love college student and he wanted to propose to his high school sweetheart, Teresa. They had talked about a future together, but Randy couldn’t afford a ring. And so he borrowed money.

Randy Brunson

Randy Brunson and Teresa’s engagement ring

“The engagement ring included a very small stone, more like a sliver, and cost less than $100,” he said “Actually, I think it was $60.  At the time, my dad worked for a savings and loan,” he said. “I believe I borrowed the $60, and paid it back $10 a month, for six months.” (For context, the minimum wage then was $2.10 an hour, and Randy had no job.) Randy’s leveraged investment has turned out well, and it’s hard to think a bigger rock and more debt would have improved the outcome.

“She said yes, and we got married in June of ’76,” he wrote in an email. “I married up big time (most smart guys I know do).” And Teresa still treasures that engagement ring. They recently celebrated their 38th wedding anniversary, and they two adult children and five grandchildren. “She’s a keeper,” he says. (As for Randy, he’s found work and has learned a bit more about money. He’s an Accredited Investment Fiduciary with The Centurion Group.)

A Moving Truck

Roy Adams, of St. George, Utah, moved there from Salt Lake City in 2010. He and his wife were moving themselves, and he estimated it would take about four round trips with a rental truck. Roy priced them, and it appeared they would be paying $300 to $400 per trip. He wondered if there was a way around it.

Roy Adams

Roy Adams and the moving truck

He operates a website called RepoFinder.com, and he set about looking for a moving truck for himself. He found one that was owned by a bank, and asked his brother, a mechanic, to inspect it and tell him if it was worth making an offer. “My wife said this was the dumbest idea ever,” Roy recalls. She feared something would go wrong. But after his brother reported that the truck, which had 98,000 miles on it, was in good shape, Roy made a low-ball offer — and it was accepted. He paid the bank with a VISA card with an 8.9% interest rate. The truck did need one new tire, and Roy had to pay for registration, tags and insurance, but he said he purchased less insurance than would have been required if a bank held the note on the truck.

For a time shortly after the move, the truck doubled as a storage unit. And when it was empty, Roy discovered just how popular a moving truck can make a person. He helped a few friends move, and then he advertised the truck for sale on Craigslist. He sold it for $500 more than he paid — enough to cover the new tire, insurance and interest on his VISA card. “It was the best decision I made when we moved,” he says.

So what do these stories tell us about borrowing? In two cases, the credit was fairly inexpensive because the card users had excellent credit (if you’re curious about where you stand, you can get two free credit scores and an action plan for improving them on Credit.com) and were thus offered financing at reasonably low rates. The credit card users understood what they were doing and had a plan to pay it back.

In the other case, the amount borrowed was conservative. (In matters of the heart, it’s good if the head can stay involved, too.) And, to be fair, a little bit of luck was involved. Sherry found work right away. Roy’s truck didn’t break down or get involved in an accident. And Teresa said yes. And responsible borrowing allowed all three to do what they wanted to do, when they wanted to do it.

Do you have a story to share about your best purchase with credit? We’d love to hear. Please add it as a comment below.

More on Credit Cards:

Main image: Jupiterimages; inset images courtesy Sherry Smith, Randy Brunson and Roy Adams

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team