Tag Archive | "Credit Card"

Credit Card Hell

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When I was in sixth grade, I received my first warning about the dangers of credit cards from my home economics teacher. “I budgeted so well until my senior year of college,” she claimed. “Then I got a credit card and I am still paying off that bill.”

Unfortunately, I failed to heed this warning six years later when I arrived on my university campus. Suddenly, credit cards were everywhere and everyone had them. Walking to class, I would be stopped on the sidewalk and given flyers. Heading to lunch in the student union, I would pass tables manned by cheerful, attractive young people calling out to me to “apply now- it’s easy.” At the annual “college fair,” booths from every company imaginable collected stacks of credit applications from eager students.

Every application entitled one to some sort of prize, often a T-shirt, water bottle, or mug that you really didn’t need– but hey, it was free. And so, it was the lure of a rainbow slinky that drew me in to applying for my first credit card. When I received my shiny new Visa with its $500 limit in the mail I was thrilled. Imagine all I could buy with that money!

By Christmas of my freshman year, I had loaded some hefty charges onto the card, but I was happy to pay the minimum and keep charging. Over the next couple of years, I acquired other cards, mostly from stores I wouldn’t normally have frequented if I didn’t have the plastic. I didn’t have much money, so charging seemed the best way to get the things I wanted, even if it meant paying more. I could have gotten my hair cut for $10 on campus, but if I got it done at the department store I could charge it and my checking account balance wouldn’t drop, even though it cost three times as much. Some cards would raise my limits any time I neared it, which made it easy to keep adding new charges. I also got a credit line from my bank off of which I could write checks, allowing me to use credit in even more instances. It was so easy to slide my credit card because it felt like I wasn’t paying anything at all. At one point, I even got a gas station card, although I didn’t have a car.

Soon enough, all those minimum payments started adding up to quite a bit of money each month, and I realized I had gotten in over my head. I worked to pay off some of the lower balances on store cards and cut them up. Yet I was still paying a bundle in interest charges and couldn’t afford to pay much more than the minimum on the cards with larger balances.

I found some help in the form of a consolidation loan, which allowed me to combine my three largest credit card balances into a loan that I would pay off over a four-year period. Yet expenses after graduation such as moving into an apartment for the first time led me to use credit again, and while I have paid off a significant portion of the consolidation loan, my total debt hovers around the same mark because of new charges.

I am still trying to get my debt under control by working extra hours and avoiding impulse purchases. I have eliminated all but a couple of credit cards, and try to pay more than the minimum each month. Still, I imagine all the things I could do if I didn’t have to put hundreds of dollars toward my bills each month, and I wish I had been more careful.

Credit cards aren’t without advantages. It is important to build a good credit history, but beware of becoming too dependent on money you do not have. Next time you wait in line at a cash register, remember that paying with credit often means paying a lot more than the ticket price of your items. Then, consider whether you really need them. In many cases, you may find that the advantage of having more “stuff” is overshadowed by the weight of being in debt.