If you’re going to use a credit card, pay off the balance every month. Let me say that another way. If you’re going to use a credit card, do not carry over a balance from one month to the next. Allowing your balance to roll over every month could end up creating a snowball of debt that can quickly turn into a sizeable monthly payment. Factor in compound interest and you’re throwing your hard-earned money out the window. Avoid credit card debt like the plague. Trust me on this one, I abused my credit cards to the point where my debt became a burden so heavy that it almost crushed me. Here’s my story.
I got my first credit card when I was in high school. It had a $300 limit, and it was given to me by my parents to cover emergency expenses when they were out of town. I was very responsible with this card as I knew that any charges would be seen and questioned by my parents. This was a great deterrent to irresponsible spending, that is until I moved out and went to college.
The credit card debt begins
This is where my responsible use of credit cards went out the window. First, I used the card to cover relatively small purchases that were a tad above the amount of cash I had in my pocket at that moment. I’d pay these off every month with the paltry income I made as a teaching assistant but I soon realized something. I could purchase bigger ticket items in exchange for a relatively small monthly payment. Heck, I could get what I wanted at the moment instead of waiting until I had enough cash to cover the purchase. This is where I went from responsible to straight stupid.
Soon, I was applying for credit cards with higher limits and started carrying balances in the thousands of dollars. By the time college graduation rolled around, I had $5,000 carried over month to month as I was only paying the “convenient” minimum payment. Pretty awful right? Unfortunately, that was just the beginning of my debt woes.
New beginnings
After graduation, I moved to another state at the tail end of the great recession, taking a job that was commission only with no salary for six months. Needless to say, I relied heavily on that credit card to cover living expenses until my income grew enough to cover them. By the time this happened, I carried a $10,000 balance from month-to-month.
It was around this time that I started earning a salary instead of a straight commission. Even more exciting, my student loan repayment started kicking in. Hooray for me! You’d think this would be a good time to start paying down the credit card debt, especially given the high cost of the interest payments and the added responsibility of paying for my student loans. Nope. After a couple of glorious balance transfers, I continued using the card to eat out, buy new shoes, cover unplanned expenses as they arose, as well as a myriad of other frivolous spending decisions.
Needless to say, my credit card debt worsened. I tried making bigger payments, but the progress was slow and left little in the way of “me” money. I ended up taking on a more stable and slightly higher-paying job to help give me some breathing room. Once I got the breathing room I desired, the bad spending habits resumed. Back to the credit card it was.
Catching a break
A little while after starting the new job, I caught a break. I won a chunk of change at the casino and used it to pay off nearly half my credit card debt. This was a tough decision as I would have much rather put the money in the bank, but I made the responsible decision. This gave me a lot more breathing room and greatly reduced my stress. Unfortunately, this breathing room didn’t last for long because I eventually went back to bad habits.
Digging a deeper hole with the credit card
I leased a flashy new car, spent money on things I never should have, and continued living outside of my means with little regard for the financial hole I was digging for myself. After a few more years of poor decisions, I was drowning in student loans, auto loans, and nearly $40,000 in credit card debt. I spent countless nights wondering how I’d ever get out of this hole. There was little money for the essentials. I had to put in sixty to eighty hours a week at work to survive. I pawned some of my belongings. My life was miserable.
I spent nearly every night before bed stressing about how much longer I could continue working crazy hours. There was no letting off the gas though, as doing so meant I couldn’t meet my financial obligations. I was essentially trapped in a life of debt, stress, and countless hours of work. Something had to change.
Enough is enough
And it did. I became fed up with the hole I dug myself into, the sleepless nights wondering whether or not I was going to be able to pay my bills, or what would happen if I lost my job. I got sick of working so many hours, chipping away at a seemingly never-ending mountain of debt. My debt was holding me back from enjoying life. So, it was in the winter of 2016 that I decided to change how I managed and viewed money. I committed to paying off my debt as fast as possible.
Credit card debt has to go
Fast forward four years and the balance on my credit cards is $0. When I made my final credit card payment in the summer of 2020, I never felt more liberated in my entire life. I was finally free of a burden that caused so much worry and so many sleepless nights. The journey wasn’t easy. It required behavioral changes and a lot of sacrifices, but I was able to accomplish my goal within four years. I’ll walk you through step-by-step what it took to turn things around in future blog posts. If you’re in a similar debt situation that I was in, I hope my story helps you along your own journey to financial freedom. As it goes with many things in life, you’ve got to start and be free.