I have been struggling with credit card debt pretty much since I started college. I got my first credit card my senior year of high school, and it only had a limit of $200. This tiny limit was okay, and I was glad of it because it meant that I couldn’t really out spend my means. I was responsible, and paid off my bill in full every month. No worries.
Then I went to college, and got another credit card, with a bigger limit of $500. Now my first year in college I didn’t have a job, so my income consisted of spending the money I had saved during high school. And once that was gone, I had a credit card! So I was good, right? I was very wrong.
I got credit line from a different bank when I transferred schools, and this meant more money that I didn’t really have that I could spend. I had a part-time job at this point so I had some money to pay at least the minimums. But already I was falling more into debt. Even when I got a big windfall from Christmas or my birthday and I could pay off a chunk of the bill, I would then spend the credit I had just paid off. It was a vicious endless cycle, and I didn’t know how to get out of it, so I just kept going. I spent part of my junior and senior years of college ignoring phone calls from numbers I didn’t know because I knew that it was creditors calling to tell me I owed them money. But I didn’t have any money to pay them.
My first year in the military was pretty much the same way. I was being a little more responsible since now I could (and would) at least pay the minimum every month. Also I would pay off my credit card (or at least part of the balance), and keep it open for a while. But then I would use the card again.
Every time I checked my credit score and report I would be devastated that I had such bad credit. I knew the theory of how to fix it, but it seemed impossible. Finally it clicked and I started to write and follow a budget. My first few budgets were okay. I would underestimate my income so that I had a little built-in buffer, and I would put money into savings. But I was still making only minimum payments each month on my three! credit cards, and putting most of money into fun savings accounts for travel or other things.
For about the last year I have been making some real progress. There have been the expected lapses, when I used a card irresponsibly or ate into my savings, but overall I have been good about where my money is going. I overpay on my monthly car payments and on one of my school loans. I have rewritten my budget so that pretty much everything that is not allocated for bills, necessities, or school loans, is going to my credit cards. I give myself an allowance, and that’s all the money I have a month to spend.
And this morning I applied for another credit card. Now hear me out. I have 5 credit cards, 3 regular and 2 store cards. The highest limit I have on any one card is $4000. Which was a HUGE deal for me! I had been struggling for so long to get a higher balance to help my credit score*, or just another card to do the same, but no one would give me one. So to get one about a year ago for $4k was awesome. Now for the past month I have been getting endless offers for a credit card with 0% interest on balance transfers for 18 months. Which is more than enough time for me to pay off ALL of my credit cards (only 3 have a standing balance), and if there was no interest I would have to pay even less.
So I applied. And I prayed when I clicked the “Submit” button, that they would say yes and that it would be at least $2000 so I could transfer just one of my cards over. Well they said yes, and gave me a credit limit of over $10,000!!!!!!!! I literally jumped up and down for a few minutes. It’s a sign that my credit is finally taking a turn for the better!! And I know that I will be responsible with this card, I won’t be carrying it in my wallet or use it online. It will be around if I need to unexpectedly fly home or something like that, but after all my balances are paid off I am done with credit cards.
*I know that getting a credit card to help you credit score may sound counterintuitive, but it can help you. Part of your credit score is based on how much money you owe versus how much credit you have. So if you owe $80 and you only have $100 credit limit total, then you are using 80% of your credit, which is bad. If you get a second card that has a $700 limit, then you are only using 10% ($80 out of $800) of your credit which is much better. The key is to keep that new credit open/available so that your percentage won’t go up. Get it?