Credit card debt is real and it is a problem. Beware!!!
I just recently paid off all of my credit card debt, and you can imagine how I feel.
To be honest though, I shouldn't be entirely proud of myself, because I did put myself in this position. I dug the hole I just crawled my way out of and while a victory, I shouldn't have been there in the first place.
Confused? Well, I'll give you the gist of what happened. I'm writing this post (and putting myself out there) because I hope others can learn from my mistakes. I am not a financial adviser or consultant (if you can find one, afford one, use them!) but here's what I've learned:
- Debt sucks.
- It stays with you for longer than you expect.
- You may think you're in control, but really you're not.
- It can and will quickly spiral out of control
- It doesn't matter if it's $500 or $5,000 or $50,000. Debt is debt is debt.
The amount of my debt is irrelevant. I had it; it is what it was. I've had debt in some amount for 11 years. That is 11 years where my payments could have been going to my savings account. It's crazy to think about. It all started in college where I got my very first all-on-my-own credit card. If you're ever trying to get a credit card, there's always some credit card company on a college campus. It was great! I thought I was a genius. 0% APR for the first year. Go me! Did I think about the fact that I'd be using my credit card for more than 1 year? Of course not. In my defense though, I did have a job so I figured I would be fine. And I was fine…for a little while.
Here's the general concept about credit cards: You pay for a purchase with a credit card and you pay for it later. The problem is that when you don't pay off the entire balance at the end of the month, the remaining balance will be charged interest. But you're telling yourself, I pay the minimum, I'm okay. You forget that the interest and the balance will continue to grow. So your $29.99 shirt could very well cost you $42 after just two months depending on the interest on your card.
Yup. I kid you not.
Parents, teach your kids how to be financially responsible. Using a credit card when you don't have the money is not the answer. Buying anything really when you can't afford it is not the answer. And don't just collect credit cards like they're baseball cards.
Circumstances can change quickly. You can go from having a full time job one day to being unemployed the next. This economy is too unpredictable. You don't want things to be made worse by realizing you have debt that you can no longer afford to carry with you.
There are resources out there for people in financial trouble. I read the book Total Money Makeover by Dave Ramesy and started reading The Money Book for the Young, Fabulous & Broke by Suze Orman. There are a number of other websites, too. Do whatever you need to do to find your foothold as you climb your way out. That being said do not blindly file bankruptcy or use a service that promises to pay off all your debt without reading the fine print or consulting a certified professional. Seriously. You could put yourself in a worse position than before.
I've learned a lot since then and I'm moving forward. It's really invigorating and you should join me.
Be financially smart. 🙂 Are you trying to become debt free? Keep at it. When you reach that point, you'll feel FANTASTIC.
You Ought To Know: Credit card debt (frankly, debt in general) is a slippery slope. Don't take that first step down it.
(Bonus) You Ought To Know: Don't spend more than you can afford.