The pressure is mounting. You’re short on cash, bills are due and you don’t have any other option than to use your credit card to purchase groceries or put gas in the car. It’s happened to many of us. For me it was the result of very poor planning.
How Easy It Is
In my early 20s, I quit my job and moved to a small college town three hours away, intending to go to school there. Young and never having had any problem finding a job before, I blithely assumed that I’d find a position soon. The list of factors that I failed to consider was long…such as how hard it is to find a job in a small, college town and how much harder it would be to pay for everything myself after having previously split bills with a roommate.
Essentially, I was dumb. The kind of dumb that comes from sheer inexperience.
How Quickly It Adds Up
What happened next was inevitable. I began using my credit card heavily, paying for gas and groceries and whatever else I could while I looked for work. When the credit limit was maxed on that card, it was too easy to apply for another one with another company, and then to transfer the balances to yet another card when I found out about credit card debt transfer. This freed up my other two credit cards, which I was then able to use (and max out) again. The whole process was very easy, very fast, and when all was said and done, it amounted to the tune of $10,000.
That number was a huge wake-up call. I wised up and realized I was never going to be able to pay that down while living in the same small town with the $7 an hour job that I had found. I cut bait and moved back home.
How to Get Out
Back home, I started a third shift, full-time position at a homeless shelter. This freed me to find another full-time job during the day, and I began to save up to pay off my debt. I enrolled in a debt management program.
Note: This method of debt consolidation may not be for everyone, and there are some shady companies out there, so if you choose to go this route, do your research.
The company I utilized helped me streamline what I owed and also got the collections people to stop calling. I was able to pay off my debt within the year.
How Long It Lasts
The worst effect of credit card debt is by far the damage it does to your credit score. In your early 20s, it’s easy to not think about the consequences of your immediate problems. But even after the seven years it takes for those financial transgressions to disappear from your credit report, your score will still haunt you. Over a decade after my experience, I still had trouble getting a decent auto loan. Now, 13 years later, my credit is finally in good standing.
Best Method – Avoid! Avoid!
You know the line about an ounce of prevention being worth a pound of cure? It really applies. Plan in advance, and live within your means. Pay by cash or check whenever those means are accepted. If you must have a credit card (more and more a requirement in this technological, online age) and you’re worried about abusing it, look into getting a secured credit card. Try never to use more than 30 percent of the credit available to you unless you will be able to pay it off in the next billing cycle. A good option is to only use your credit card for one budgeted expense a month. Say, only for gas or to pay for utilities which can be set up automatically. This way the bills always get paid on time, and you only have to pay one bill a month instead of six. It sounds simple, but the biggest tip out there is to never buy what you can’t afford.