This post is from Daisy, who runs the blog When Life Gives You Lemons, Add Vodka. If there are any grammar or spelling mistakes in this post, you can blame it on the fact that she’s Canadian.
I’m wandering the mall with a friend, window shopping. “That’s cute”, my friend says, pointing at something glittery in a favorite store. “Let’s not even go in. I’ve applied for my credit card, but it hasn’t shown up yet so I can’t buy anything”, I lament. I’m 18. I’ve just graduated from high school. I work almost (but not quite) full-time for just above minimum wage in a store in the mall, living and breathing constant temptation for 8 hours a day. I have an older friend dating a bouncer in my hometown, who is able to get me and my friends into bars.
That’s where we spend most of our Saturday nights, dancing and drinking and eating street food at 2:00 AM. We go out for dinner first, then back to one of our houses to do each other’s hair and pick out outfits. Cab downtown, tip the bouncer that got us into bars, drinks, drinks, drinks, street food, more drinks, and oh! A friend! And it’s her birthday (or she got a raise, or just got a job, or lost a job, or broke up with a boyfriend, or graduated like me, or adopted a puppy, or is going to Thailand)! Lets buy her a shot.
So the cycle goes until we’re broke and can’t go out the next weekend because next weekend isn’t following payday.
But then, I get a credit card. This is a game changer.
They start me off with an $800 limit; my mom insisted that if I get a credit card, it must have a low limit and I must use it sparingly and pay it back to build my credit. Right. That happened. If sparingly means racking up $5000 worth of credit card debt, then that totally happened.
I increase my limit in installments. I increase it by $1000 the first time. Then, when I’ve maxed out, I increase it by another $500. Somehow, I have a $6700 limit after only a few months.
So now that I have unlimited money, I can go out every weekend. Even better, I can buy a new outfit every weekend so that I never wear the same thing twice! I get my hair done for “important” events (re: a friend’s birthday), get gel nails, sign up for unlimited tanning (don’t judge me) and sign a gym contract. Life is good, and I can and will buy anything I want.
Our designated driver ended up being less designated than we thought? No problem, hop in a cab. I have a credit card.
Friends forgot to BYOB to our barbeque? S’all good. Daisy’s got a credit card, and she’ll just cover it this time.
Fast forward a couple of years and countless swipes of that card, and I’m up to my eyeballs in credit card debt. My minimum payment doesn’t even cover the interest on my account, and I’m incurring almost $200 of credit card interest a month. On an almost minimum wage job, while living on my own and going to school, this is a hard pill to swallow. I have to pay hundreds of dollars a month toward my debt and it’s barely paying the debt back.
At 20, I’m stressing about money day and night. It keeps me up at night. I’m going to school full-time, but I pick up a part-time job on top of my full-time job just to keep myself afloat.
I’ve just realized the gravity of my spending binge, and it’s suffocating. This is supposed to happen to other people, not me. I’m not supposed to be the one barely keeping my head above water, drowning in credit card debt.
I sell some things to pay down my credit card, and announce to my friends that I can’t afford any more nights out. I manage to pay down a couple thousand dollars of my credit card, and put some student loans on the rest. I close that credit card and get a new one, as a fresh start.
I still have that card, and I still have a limit of almost $7,000. But, since a few years have gone by, I’ve learned that credit cards can either be a tool or a weapon. I used mine as a self-harming weapon in my teens.
My biggest money mistake is not recognizing that I wasn’t ready for a credit card, not reading the terms of the card when I got it, and using my card as free money. It’s not.
Hindsight is 20/20. I know I should have waited to get a credit card. But I’m not entirely sure that I wouldn’t have made the same mistakes years later, and I’m glad that I learned from the experience.
This article was featured in Carnival of Personal Finance #366: Use Your Head Edition