This is a guest post from Emily at Remodeling This Life, who blogs about her family’s journey through frugality and investing to make their dream house a reality. If you are interested in insightful and honest posts about one family’s journey, why don’t you subscribe to her feed?
I have been living a credit card free life for about 5 years now. That’s an estimate as I have decidedly blocked out the gory details of my days with a stash of plastic in my wallet. I think it was about 5 years ago that I finally got them all paid off, cut them up and closed my accounts.
I’ll start at the beginning. I was in college and I got myself an Associates Visa card. I didn’t *need* a credit card. I had worked for my parents’ business and the wages I earned for them were invested by them and that was a very nice amount of money that I took with me to school to pay for tuition, books, and living expenses and to live comfortably. I had money. I don’t know why I got the credit card and I didn’t even know how they worked. I remember the first time I used it. I bought a pair of Adidas Trail Response running shoes. My favorite. For $75. I was confused when I handed them the credit card and then didn’t have to like hand them $75 cash too. Yes, really.
I anxiously awaited that first Visa bill. I think I had charged maybe $50 more on the card and was waiting for my statement so I could pay it in full. And I did. I kept it tucked in my wallet and rarely used it. Then one day I guess it clicked in my brain that my $2500 credit limit meant I could spend all of that and didn’t have to pay for it right away. So…I did. Yes, really. I kept that card pretty much maxed out, throwing a couple hundred dollars at it each time a bill came but doing so knowing that meant I was freeing back up a couple hundred dollars to spend on it. And I did that too. And I added to it. I got myself an MBNA Mastercard. And a JCrew card. And a Victoria’s Secret card. Let’s be honest, hubby liked that one. And an Express card. I was way over my head. I had the money to liquidate and pay my debt but I didn’t. And then school was over and my school money was depleted and I was in debt $12K.
I knew I was in trouble but didn’t know what to do. I was working two jobs and trying to pay them off but I didn’t have a plan and I was still a spender at heart so I wasn’t really making any progress. Then, I got a call from Discover. They offered me a 0% interest on balance transfers card and I put all the store cards balances on the Discover. I was paying about 26% interest on those compared to 9 and 12% on the Visa and Mastercard so I figured I’d transfer to the 0% and pay those. And I did. *whew* But I didn’t close them and I used them again. Yes, really.
Somewhere in there, I finally eliminated all the store card debts. I had $4K left to pay between the Visa and Mastercard and was working fulltime for about $12/hr so not much wiggle room to pay down debt. Hubby was nice enough to take a well paying side job for about $4500 and he paid the rest of it off for me. This was only after he saw I was serious about getting out and staying out. He had always been the kind of credit card user that has a credit card for the rewards and very responsible with them. He’d go Christmas shopping and buy something at a store, sign up for their card to save 10% and then pay it off the next month. Voila! So he had very little patience for my irresponsible ways but he was very nice to help me out of it.
So it’s been 5 years and I still miss plastic. Yes, really. If I was handed a credit card today with even a $50 limit I can guarantee you that my purse would be smoldering and I’d have that $50 spent so fast. A credit card? Yay! Free money! *throwing confetti* I’m so lucky! Thank you, Visa! What did I do to deserve such an honor? I’m not sure where I learned such foolery. Certainly not my parents. They’ve always used credit cards and paid them in full each month and gained rewards like cash back and frequent flier miles. Right now, my mother is in the horrible pickle of having to decide if she should get her $1000 in rewards from her Visa as cash or gift cards. I dream someday that maybe I could get a credit card again and practice restraint and be responsible and earn rewards. Not yet. I know me and I’m not there yet.