When I was a college freshman, I remember opening up my mail box the first week of school and seeing all these flyers for credit cards. It was like free money! I had realized already that first week that I was going to have a hard time “Keeping up with the Joneses” at college. I was on a scholarship, had to work to pay my college tuition. So a credit card for me was like a lifeline to help keep up with all the other “cool kids” at the university.
It started out with one credit card with a $1,000 limit. In no time that one was maxed out by too many trips to the mall and out to eat (who wants college cafeteria food?). Then it turned into store cards, I could get 10 percent off by applying for a new card with my purchase. And who doesn’t love a 10 percent discount! Before I knew it, I was paying my credit card bill with another credit card. I was charging groceries and toiletries on a Visa. And in no time at all, I had over $9,000 in credit card debt! I promise you, I had nothing major to show for it!
A few years and a bunch of minimum payments later, I realized something had to change! At this point I had moved back to my hometown and was going to a more affordable local university. I had my own apartment and a full-time job. I was making most of my bills, but I still did not like all the credit card bills that came each month. I confessed my problems to my mom who got me in touch with a Credit counseling company. I was able to make one lump sum payment every month and all my credit cards were going to be null and void. They mentioned something in passing about ruining my credit but at that time I didn’t really care.
The next year I got married! My husband and I began our lives together and decided to look for a home. I had almost paid off all my credit card debt and didn’t really think anything of going and trying to get a mortgage. At the bank I was shocked to find out I was unable to even apply for a home loan with my husband! One thing I did not know is that credit counseling ruins your credit for years! This affected the amount we could get in a mortgage, it affected my insurance rates and it even affected trying to get a job at the local bank. Poor credit can ruin your life!
If I could go back in time, I would have never gotten the first credit card. Although, credit counseling did ruin my credit, I know without it I would have never had the will power to cut up and quit using the credit cards. Very few 18- to 21-year-olds have the will power necessary to refrain from using them on non emergencies. I wish I would have had someone tell me that bad credit can affect every decision you make for at least 5-10 years. It took five years after paying off all my credit cards and getting out of credit counseling to begin rebuilding my credit. Now that may not sound like a lot of time, but it took three years to pay them off! That adds ups to eight years — all from one stupid decision.
I would love to say I learned from that stupid decision right away, but I didn’t. My husband and I both had a few credit cards for a few years. These were used for home and car repairs, appliances and other big purchases. We recently went through a Total Money Makeover and have cut them all up and are now completely debt free other than our mortgage and one car payment.
If you are in a similar situation, I advise you to stop and think before you swipe. I encourage you to pay cash for your purchases. It is so much more freeing not being underneath a big pile of plastic debt. No amount of “keeping up with the Joneses” can give you the peace you feel when you don’t have debt looming over your shoulder. Learn from my mistakes and realize that credit cards are enemy #1!