Dollars and Sense: A Lesson in Interest of a Different Kind

I bought my first PC, an AT&T computer, when fellow teacher, Ken Pitts, arranged a special deal for staff members in the district. This was back in the day with the good old C-prompt and MS DOS.

So how did I, a still-young, broke teacher who lived in a one-bedroom apartment with no cable TV, a car loan, and a small college loan payment afford it? By doing the second stupidest thing I've ever done in my life.

Now a-days, credit card offers arrive by mail tempting young adults, but this incident happened in the '90's when flyers were mailed announcing special loan deals with low monthly payments on x-number of dollars. My name was printed on it like a certificate. The loan amount, that I would automatically qualify for, stood out in bold. It looked like I had won something.

And I fell for it. I took out a loan to buy this $1200 computer. Did I go to my local Citizen’s State Bank in Cheney where I had my account? No. I went to the establishment that sent me that certificate—some bank in Wichita.

I took the flyer along, showed a couple paycheck stubs for verification, filled out the vital information, and ta-da! I had the cash to buy that PC: a keyboard, a tower with a 3X3 disk slot, a black and white monitor, and a mouse with three clicker buttons--no scroll button, mind you, and certainly not shaped to fit the palm of your hand let alone cordless.

My computer arrived, I put it to good use, and faithfully made my payments. When school was out for the year, I returned to South Dakota for a few months, and my parents knew I had bought a computer, for it made the trip with me.

At home sitting at the kitchen table paying bills, Dad noticed my coupon booklet. Remember those? We'd get the entire booklet and were expected to remember to send in the payment with the coupon. No bill came in the mail to remind us since the due dates were printed on each sheet.

So I am busy writing checks and paying my bills until Dad expressed surprise at my low, $35-a-month payment for this loan.

He asked what the interest rate was. I said, "I have no idea.”

He took a look at the paper work. Silence. Then came the discussion.

Did I even know what an interest rate was? And did I even ask the bank what the interest rate was for this loan amount? What was the length of the loan? Could I pay it off early without penalty?

After a scolding for my ignorance, Dad called the bank to discuss their marketing tactics used on young, naive women who do not have enough experience to even ask the right questions. Man, was he frustrated with me—and that bank.

After we found out the pay-off amount, Dad took the booklet, paid off the loan, and made me pay him the money instead of the bank.

The interest rate that the bank charged me, you ask? Thirty-one percent.

The interest rate Dad charged me? Zero.

The same interest rate I charged him when a few years later, he borrowed my three summer paychecks to help pay the aerial spraying on the farm.

Dad’s interest in me, of course, goes well beyond dollars and common sense to spiritual and Biblical concepts, but on this Father’s Day 2014, this is the story I’ve chosen to share publicly—one demonstrating a young girl’s I-wanna-be-out-on-my-own-ignorance and a father's forever-protective, guiding hand.