Imagine being a 21-year-old college student who is used to getting what she wants and away from home for the first time. You want to establish your own independence and have your own money not tied to your parents.
This is the state I was in when I applied for my first credit card in college. I didn’t really think I would get approved, so imagine my surprise when the card and terms arrived in the mail. Like most people, I skimmed over the terms and conditions without really reading it in true detail. I activated the card and was ready to go.
I held onto the card for awhile without using it. Eventually, I told my grandparents about it and was instructed not to use it. I abided by their wishes for awhile until one day we were on an outing together. My grandfather always gave us an allowance for the day to spend. If we used up our allowance and needed a little extra to purchase something, he would usually help us out.
I remember being in a store shopping, and there were some items that I wanted. I didn’t have enough allowance left, so I worked up the courage to ask if I could use my credit card. They reluctantly said yes.
You may be wondering why I would use the credit card if I could just ask for money. The answer is simple: I didn’t want to ask my grandfather for any more money and just wanted to do something on my own. I stepped up to the register and handed them the card. I felt powerful, but I now realize it was one of the biggest mistakes of my life. The items purchased were not things that I needed but wanted. Had I known then what I know now I would have never used the card. Better yet, I would have never signed up to get a credit card in the first place. I was young and ill prepared for the financial burden of a credit card. The exact amount of the purchases is unclear as it was more than 10 years ago, but the credit card itself had a low limit of no more than $250.
That one purchase turned into a huge financial regret, because I got hooked on the fact that you could buy something I wanted without having the cash on hand. I got addicted to the fact that I did not have to ask my grandparents for everything because I could just charge it and pay later.
During my college career, I had more than one credit card. I used them and paid the minimum balance most of the time, which will always keep a person in debt. I didn’t realize how much a credit card affected my credit score. Had I known about debit cards, I would have just gotten one of them instead. I may not have been able to buy everything I wanted, but I would be on sounder financial footing.
By the time interest was added, I had a few thousand dollars of debt accrued among three or four credit cards. That amount in comparison to the amount of debt many other Americans have may seem small, but to a college student who just graduated, trying to pay for the mistakes of early youth it is an enormous problem.
I should have listened to my grandparent’s advice and not used the card. The purchases were small and I didn’t really need them, but the lure of independence and doing my own thing overshadowed the wise words that I was given.
Getting a credit card in college without having a full-time job to this day is my biggest financial regret. In the future I hope to save my kids from repeating my mistake. Only then will the cycle of financial burden be broken.