I pulled the letter out of my campus mailbox and sighed heavily as I glanced at what I thought was yet another bill from one of my credit card companies. But it wasn't a bill. As I walked from the mailroom and into the snack bar of the student union, I read a letter that threatened to ruin my ability to ever get anything on credit again—if I didn't start making payments immediately.
I slid into a booth and stared at the letter, trying to comprehend what it all meant. But I knew one thing for certain: I owed this credit card company $2,000 right now. Add that to the $1,000 I owed on another card, and I knew I was in big trouble—and deep in debt. Tears clouded my eyes as I nervously tapped my fingers against the plastic tabletop.
What am I going to do?
My credit card nightmare began innocently enough. My parents had signed me up for a card near the end of my senior year in high school, thinking I'd need one at college. Since I was still at home and my parents paid all the bills, I didn't use my credit card much in high school. But when I got to college, things changed drastically.
I didn't like the school's cafeteria food, so I'd use my card to eat out. And I ate out a lot.
I also loved to go shopping with my friends, soI put my purchases on my card. I really didn't think about how much I was spending. I was just having fun, and it seemed nice to think
I could take care of my expenses without going to Mom and Dad. Naively, I figured I could pay off my credit card bills with the money I made at my campus job.
The problem with all of this was that I didn't really understand how a credit card worked.
I didn't know that if I didn't pay my entire bill at the end each month I'd receive a finance charge. When the credit card company sent my bill, I'd look at the minimum amount that had to be paid, which was usually around $20, and think, OK, I can do that. But I didn't pay it every month. My part-time job just didn't cover all my expenses.
I began missing payments and then would be charged late fees. Before long, I was close to $1,000 in debt—I had almost maxed out that card. Instead of trying to get myself out of debt, I decided to get another card. I know, it sounds crazy, but I didn't know what else to do. I had expenses and things I wanted, and I just thought another card was the "magic solution" to my money problems.
After I missed several payments in a row, I received that threatening letter from the credit card company. I didn't know what to do. I was too embarrassed to go to my parents, so I confided in a good friend.
When I showed him the letter, he got a worried look on his face. As an accounting and finance major, he understood financial trouble. Then he said bluntly, "Put away the credit cards." He also told me to stop spending money except for things I absolutely needed. I took his advice. To be honest, it didn't seem like I had any other choice.
Eventually, I told my parents, and they were very concerned and worried about the mess I'd made. They also wanted to know why I hadn't asked them for help earlier. I told them I'd really wanted to handle it on my own. I also confessed I'd been too embarrassed to talk to them. They were very understanding and told me they wanted to help. They said they'd send money whenever they could.
That summer I worked a lot and saved. Then I started sending more than just the minimum payment to the credit card companies. My parents sent extra money whenever they could, which allowed me to pay off more of my debt. It took me more than five years, but eventually I paid it all.
During that time, my lifestyle changed a lot.
I was able to finish college, but I had to stop shopping and eating out. When my friends were out spending money and having fun, I was working extra hours at my job.
I don't think I'll ever use a credit card again.