How I ran up $11,000 In Credit Card Debt
Since this is credit card week, I wanted to share some aspects of my credit card career with our readers. I first got into credit cards when I was a sophomore in college. Like many careers, my history with credit card started off romantically. My first card was a Visa issued by Bank One. I can still remember the card, it had a shiny Bank One logo on a blue and white background. It was love at first sight.
The credit limit was $250. Due my prodigious consumption of pizza and beer in college, I had that baby maxed out in no time.
Later in graduate school my credit card career took a turn for the worse. In the two years it took to earn my masters, I turned that $250 obligation into more than $11,000. I can't say that there was anything redeeming about my behavior. I wasn't borrowing to invest and I certaintly wasn't giving the money to charities for old ladies or orphans in Africa. Some of the debt went to paying my rent and buying food. Frankly though, a lot of it went to partying. I visited New York several times, and enjoyed many fine nights out in the free-wheeling environment of Clinton era DC.
But then I graduated and the party ended. I was facing $32,000 in student loans and $11,000 in credit card debt. The shock of being out of school and eating ramen while living in a basement galvanized me into action. In the course of a year and a half, I had the cards retired. But, thats a story for another time, so stay turned to learn how I dug myself out of that hole.
Best,
James
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2 comments:
I appreciate reading of your experience. My wife and I have been fortunate enough to not have gone through credit cards debt. We are DISCs (Dual Infants, Single Carreer) and want to make sure our kids learn these lessons early so they don't have to have such experiences int heir future.
I would be interested to know the following: Don't take this the wrong way, but what is the mentality that you went through when you built up this debt? At some point you were $10,000 in debt and thought it was ok to continue the behavior. Was it jsut that you were in college and thought/knew you would be able to pay it off later?
Good question. When I was younger I always has things paid for so I didnt develop my interest in personal finance until I finished my masters.
I think doing the MA on my own kind of made me grow up a little. Part of the process of struggling through might have created a bit of motivation and maturity that wasn't there until I had to strike out on my own.
So, to ask what the mentality was, I think it was just that that I lacked the maturity to manage my own money.
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