Community Discussion: How’d You Get into 5-Figure Credit Card Debt?

Green Visa

For some reason, credit card debt is on my mind this week. At the moment I have no balances, I’m living on (and loving) my budget, and the only card I use automatically pays itself off every month – things are good.

But I’m not getting cocky.  The debtors anonymous survey tells me I should be very careful with any kind of credit instrument. Heaven knows I’ve spent the last 10 years on and off the credit card roller coaster:

  • In college, I ran up a balance of about $1,500 on my first credit card. I’m sure the money was spent on normal college kid stuff: fast food and rent.
  • When I started my business in 2008, my income dropped but my spending didn’t. I ended up with around $15,000 on the credit cards before my income caught back up to my spending habits.
  • When my daughter was born, her hospital expenses totaled around $9,000 – all funded by Visa.
  • While building one of the businesses I sold in 2012, I carried roughly $7,500 in balances until the proceeds of the sale zeroed the debt.

Nickels and Dimes, or Big Chunks?

I see three ways we bury ourselves in credit card debt:

  1. Daily living beyond our means. We use the cards to buy groceries, gas, clothes, meals out, utilities and the like. Balances creep up slowly, but steadily.
  2. Conspicuous consumption. Furniture, vacations, private school tuition, home improvement. That sort of thing.
  3. Emergencies and “emergencies.” Car breaks down, taxes are due, kid breaks his arm and you have to cover your insurance deductible, water heater breaks. You get the idea.

So How Did You End Up in Credit Card Hell?

You can see I’ve walked through doors 1, 2, and 3 on the credit card gameshow. I’m wondering about your story? How’d you end up with big balances? Have you cleared them now? Are you snowballing? Or still mired down, wondering how you’ll pay it all off?

(I’d love to hear your story. If you’d like to comment anonymously, just make up a name and email address for the comment form.)


43 Responses to “Community Discussion: How’d You Get into 5-Figure Credit Card Debt?”

  1. Erick

    I do not have a credit card. It is tempting to get one but feedbacks like this always makes me think twice…

    Perhaps, I should never think about getting one then. I have lived all my life without any plastics and I am still doing fine so far :)

    • Gene

      In 2007, my wife was essentially laid off but chose to resign. We had always been a two income family. However, she was never able to return to full time work because of various disabilities. But we still did not change our spending habits much. In July of 2012 she was awarded disability benefits by the Social Security Administration.

      We decided to move to a condo and sell our single family house. When we added up the bills from all sources, including repairs to the house necessary for the sale, it added up to almost $100,000! We were both shocked. We used the proceeds from our house sale to pay off all debts. We are starting to use YNAB now in order to clearly live within our means. We can do that now and YNAB will be a big help!

  2. Anonymous Spender

    I put big purchases on them.. I promised to pay them off over the next few months but never did. As the totals added up I did the credit card shell game, opening a new card to pay off the old card with no interest for x amount of months. I never paid it off in time. I also fell into the “no interest” financing trap. I bought everything with 0% financing. That led to a bunch of monthly bills that were hard to keep track of. I paid one off a day late which led to about $200 in finance charges that accrued. The bills added up and I started charging things on the card for day-to-day necessities. I now have two cards pretty much maxed out, along with 3 store credit cards. I’ve been back using YNAB for about a month and it’s been a struggle, but I’ve navigated through some storms without adding any debt.

  3. Kelli

    Not in any credit card debt at the moment Thanks to using YNAB for the past 8 mths. I ended up there because of eating out and other miscellaneous fun, but mostly because of failing to understanding the concept of only using a credit card up to the amount of cash I have. I used to spend with my card and cash simultaneously. I laugh to think how crazy this is now.

    • Kelli

      Question: how does your credit card pay itself off each month?

      • Kim Crowther Nielson

        You can go to your credit card’s web site and register for online payments – then just have them automatically withdraw the full amount due from your checking account every month. That’s what I have set up with my credit cards so I don’t have to worry about forgetting it :)

      • Kelli

        Oh, lol. Well, I was thinking of something MUCH more magical than that. Haha. Sometimes I am thinking a little too much out side the box.

      • Renaité

        Thanks for asking that though – I was wondering the same! (And I ALSO expected something magical.)

  4. Slickmouse

    Living outside our means. Once our salaries caught up with our spending habits – we didn’t focus on paying off the debt – by that time we felt we ‘deserved’ to have that level of spending – besides – look at our income. We were well into 5-figures on credit cards alone. They were all very low interest rates – but I still paid more per month on credit card payments than I did on my house – trying to pay them off. What finally did it for us – getting laid off. We both worked for the same company that was purchased. I got laid off first and took my severance and paid off my credit cards and my car. That allowed us to live on 1 salary and my unemployment until my husband was laid off. He got the same amount of severance, we both were able to find jobs 2 wks later and then funded our emergency fund with his severance. Three years later – we still have $0 credit card debt and a fully funded emergency fund – and that’s a good thing – because we’re both facing another layoff this year from another buyout. By now – you’d think we’d learn that we should not BOTH be employed at the same company.

  5. brad

    I haven’t carried a dime in credit card debt for 11 years now, although I still use credit cards (I just pay them off in full each month). But it wasn’t always thus: in the mid 1990s I racked up about $18K in credit card debt due to a divorce and switching from a full-time job to freelancing. My first year of freelancing brought in something like $7,000, so I was using my credit card to pay for groceries, rent, and just about everything else. It took years to pay it off, but I did. I like having a credit card and still use it regularly, but YNAB helps ensure that I budget for things before I charge them to my card, so I never run the risk of charging more than I can pay off in a month.

  6. Maureen

    My husband and I use two different credit cards for our everyday expenses. We use one specifically for gas, which gives us 5% back, and then we have an Amazon.com one that gives us different amounts of points depending what we buy. I’ve had the Amazon.com credit card for over 5 years and so far have been able to use my points to get an Xbox with Kinect, a Blendtec blender, and an expensive camera lens. All at no cost to me. We pay off our credit cards in full, every single month, and I’ve never in my life carried over a balance on them. Furthermore, before my husband and I were married, he would use his debit card to purchase everything. Well, somehow someone got his debit card information (likely when he purchased gas with it) and 1,000 dollars was quickly stolen off of it supposedly from an ATM several states away. The bank replaced his stolen money but he started using a credit card after that. Credit cards have been great for us, we’ve had no issues and we have gotten lots of rewards from them. Plus, it leaves our savings in the bank generating a tiny bit extra interest until the end of the month when we have to pay off the credit card.

    • Maureen

      I just wanted to add, every time I make a charge to my credit card, I track it on YNAB in the appropriate category. It’s handy too that if I lose a receipt, I can just log on to the credit card’s website to remind myself what I purchased and make sure everything is tracked.

    • Logan Thomas

      Yes, credit cards are great for the rewards. My wife and I only use cash rewards cards and easily get $50 a month in rewards. Normally I just put it towards the credit card payment. Sometimes if gift cards are on sale I’ll cash in $40 for a $50 gift card. Chase used to give me $250 cash when I saved up $200, so that was always nice too. I can’t remember the last time I used my debit card. My wife always has cash (she’s a hairstylist and gets tips) but I’d rather have her put everything on the credit card. Might as well get the free rewards!

  7. Christian

    This is going to be pretty long:

    I don’t think I was ever really good with my money. I always had jobs, but if I had $10, I spent $10.

    I really started having problems after college, when I started working. I needed a car, and with no debts from school (full tuition scholarship), living at home and a decent entry-level job, I decided that I needed a $30k new SUV. I put $2k on a credit card as a down payment, and the rest I took in loan from the bank. Payments were $464 a month for 72 months. That $2,000 stayed on my card for about four years. I was making minimum payments, and steadily using my card for other expenses. Every once in a while I’d knock it down a little, but the balance stayed pretty static.

    The next phase of my life, starting about 6 years ago, really put me in a bad spot. I was offered a job in Los Angeles. I was living in NJ and working in NY, but the job offered a good raise and a great experience. I was spending a little more freely by that time and had upped my debt to the $5 to 6k range. Almost immediately in my move across country, I amassed an additional $4,000 in debt, taking me to $10k – I needed to build my new life after all.

    The next part is pretty sad, but it’s what took me to the edge. I needed friends, I was lonely, and bored and everything else to do with mild depression from being so far from home. I started partying hard, and buying people rounds at the bars. I started maxing out my credit card at $15k and over drafting my debit card. One month, I added $1,100 in new debt and only paid $25 toward it. I got arrested for drunk driving – costing me over $4,000 in fines and fees. I was making $62k a year and I was broke.

    After 2 years of that, enough was enough. I moved in with some friends to cut my cost of living in half. I created my own budgets and counted every penny. My car payments never suffered during this and I paid that off right around the time I moved in with my friends. I was also making contributions to a 401k plan through work, so I lowered the contribution to give me more cash every month. I was attacking the debt, but I was still slipping.

    One day, I was growing tried of keeping my own spreadsheets. They had grown too bulky and I needed a better program to do all of that for me. So, I pretty much transferred all of my data into YNAB as-is and initially I was underwhelmed. I wasn’t doing it correctly yet. I was still hovering somewhere around $7k in debt and just barely making any progress. It took me three years to get to that point and my balances kept yo-yoing.

    Ultimately, the thing that got me back on track was the fact that I was getting really confused with the set-up of the budgets and decided to start over from scratch. I was using YNAB, but I was still using my own budgeting philosophy. I watched the tutorials for the first time and my life changed. From there, I was able to comfortably make some serious sacrifices at home, ramp up my payments toward my debt, and attack this thing head-on with confidence that I could budget down to $0, and that I wouldn’t overdraft. Over the last 5 months, I’ve committed almost 45% of my salary to this task.

    As of Wednesday, I am 100% debt-free, I am 1000% smarter with my money and I owe it all to YNAB.

    • Christian

      Doh! Reading everyone else’s posts. Why do I always write novels :-/ Do you have a program for succinct writing?

      • Dennis

        “I have made this longer than usual because I have not had time to make it shorter.”
        -Blaise Pascal

      • Admirer

        I really appreciated your post, Christian. Thank you for sharing, and kudos for paying off your debt.

      • Christian

        That’s a great quote and it’s the story of my life. :-)

      • JosieK

        But it was worth it, Christian! I found your post really helpful – Ivan totally relate, especially re still in my mindset. Thanks!

    • Tara

      Thank you for posting this novel! This is so ME! Its inspiring to read that it CAN be done. My cc debt isnt as high but its still ridiculous to me. Thank you for the input and I am pumped to get to the 100% debt free mark eventually!

  8. Laura

    I think it was a combination of “emergencies” – mostly plane tickets for major family events that we did not plan for, and not paying attention because of major depression/ADHD. Once I got treatment for my depression, and an understanding of my ADHD, (and buying YNAB), I found tracking our expenses MUCH easier.

    In the 18 months since I got diagnosed with ADHD and bought YNAB (same month), we’ve gone from over $20,000 in debt on 5 credit cards to $6,500 in debt on 1 credit card. I now put aside $500 a month for trips because I know that it’s important for us to attend family events, but (and this is a HUGE but) I won’t go into debt anymore to do it. We are paying off our debt slower because of this, but we are not accumulating any more.

  9. Magess

    I think it was doors 1, 2, and 3 for me. It started in college, when I didn’t make enough to live off of but spent it anyway. And then, well, what’s a trip to Canada here and there?

    Then there’d be Xmas to pay for, and surely I would make back what I spent.

    Then maintenance costs for my car or a new pair of glasses for several hundred dollars.

    All the while working temp jobs because no one’s been hiring for basically my adult life and I spent half the time between college and now unemployed.

    Then I went to grad school for a year, so again with the living expenses, travel expenses, that trip to Paris.

    I couldn’t even tell you what the money that’s on the cards now was ever for, specifically. IT’s all be balance transferred around to get better interest rates.

    It’s only really been the last two years where I’ve started making progress, since I have a steady job. And only since YNAB earlier this year that I’ve put together to snowball some of the debt away.

  10. Jenn

    My husband and I racked up nearly 16k worth of credit card debt using them for meals out, electronics, a vacation, home improvement, and college tuition/books. We also used them for emergencies like our car breaking down and vet bills. We didn’t have more than 2.5k on any one card; it was just spread over numerous cards and we didn’t realize how much debt we had until we missed an “interest free” period date and were charged hundreds of dollars. We finally sat down and added all of the credit card debt up and realized we had to stop using the cards. We were paying the minimum balances each month, but as anyone with a credit card knows – only paying the minimum never pays them off. Then a friend introduced me to YNAB and it changed everything. In just a few months, we had snowballed and paid off a few of the credit cards. We put any extra money we could and our entire tax return towards the rest. We finally paid them all off this April. This is the first time in my adult life that I haven’t had a single credit card balance. Now with all of the credit cards paid off, we are focusing on my student loans – but that’s for a whole other blog post response. :)

  11. Cori

    We’ve had so much medical debt, it’s crazy. $169,000 last year alone and we’ve got $20,000 sitting on credit cards. I lost my job and have no income while applying for disability. My 11 year old was diagnosed with Type I Diabetes in Dec of “12. Her medication is about $80 a month but all the supplies are astronomically expensive so our expenses are outweighing our income about 2grand a month.
    I haven’t kept up with YNAB because of being so discouraged about it all. We are working with CCCS and are hoping for our mortgage company to grant us a loan modification. So far, we’re current with everything, and it seems we have to “fail” and our credit go in the toilet before folks will work with us to financially afford to continue to live…..

  12. Carla

    My credit card debt married into credit card debt. I think for my husband it was more daily expenses, and for me it was conspicuous consumption and emergencies – Christmas presents, new furniture for the empty room in my new house, a new lawnmower, oh, and financing our wedding with plastic. We are currently snowballing, but because we keep getting sent ridiculously good balance transfer offers on our credit cards, we’re kind of funneling other things through the cards to pay off higher interest credit cards that we had, and a car loan that had a slightly higher interest rate. Even though we still have 5 figures on credit cards, we’ll be paying almost no interest for it this year. Woo hoo!

  13. Marissa

    I married into credit card debt and it continued to build due to the 3 ways mentioned above. We never kept track of expenses. We would forget to budget for about things like medical co-pays, birthdays, & haircuts in addition to many other things. We wouldn’t budget ahead of time for any big (or little) expenses. We would do balance transfer after balance transfer to stay interest-free, then we would use our tax return money to pay our cards almost completely off. By the time taxes came around again, somehow we would accrue all of it back. I remember us thinking, “If we made an extra $10,000 or so per year we wouldn’t be stuck in this stupid cycle.” I think back and laugh at how silly that sounded. YNAB is helping us remedy all of those issues & stay out of debt. What an awesome software! We haven’t been able to start snowballing, but we should be able to in a few months once our first card is paid off completely. I can’t wait!

    You can read more about it at http://lifeisfantasmic.blogspot.com/2013/02/building-better-budget.html

  14. Cannellini

    For me, overall it’s been through type 1. I’ve never been a high income earner but it’s been much worse since I’ve returned to study. It’s definitely not through conspicuous consumption, I really feel guilty at the thought of large non-urgent purchases.

    In the past though much of it has been from vet emergencies. In the last month of his life alone my younger dog’s vet costs were over $10 000. I was so grateful for the credit at the time (and given the same circumstances, I have no doubt I’d do the same thing again) but afterwards it made my debt feel overwhelming. If I hadn’t got some gravy money soon after, I don’t know where I’d be at now.

  15. Finally Seeing Progress

    The start of it was never really learning how to use credit cards vs. cash. So I got my first card while in college and just kept adding more cards over the years as I continued to live beyond my means. So many groceries and meals out and clothes and travel expenses on those cards! Even as my income grew, I didn’t make the effort to totally pay them off.

    Yet, I paid off my 5-year car loan and 10 years of student loans easily and early but never the cards. It was too easy to simply pretend credit cards were an extension of my checking account and keep spending, whereas the loans with their automatic monthly payments, I could see the progress in paying them down and also didn’t have any means to add to them either.

    Later on, I married someone with tons of credit card debt and the attitude that he was never going to pay off the debt he had so why bother paying more than the minimum payments? Interestingly enough, his assumptions actually led me to start researching debt elimination strategies like snowballing (because I refused to have our collective debt on our heads until we died). Unfortunately, the ideas didn’t really take hold in my brain for years after we divorced…and after I’d racked up even more post-divorce debt.

    It wasn’t until I started really using YNAB properly after several fresh starts (well, many fresh starts, more accurately!!!) AND acquired consolidation loans from the peer-to-peer lending site Prosper.com that I have really started to make major progress. Clearly loans are better for me than cards. I still have a ways to go, so celebrations yet, but I’ve come to realize I’m just not cut out for credit cards. Too much temptation!

  16. Shayna

    conspicuously living beyond my means! my rent is a little more than half my monthly income, so i compensate by slashing my grocery budget. but then i always seem to come home with all kinds of junk when i only went to buy a few vegetables….

  17. Christian

    All three for me – I was an engineering studen and knew I’d have a good income when I finished school, so I didn’t balk at at buying a new car, spending $50 on a night out etc before I graduated. I landed a great job with a great income before I graduated, yet I just lived on the margin – bigger vacations, bigger cars, more toys. About five years into that my income had nearly doubled so it was never a big priority to pay it down.

    Then I got married, moved across the country, and was supporting two of us on one salary. For the sake of brevity: We downsized and she took a sales job she hated but added $3k to our budget every month. Except for a small mortgage, we are now debt-free with three months of emergency cash in the bank.

    Keeping the debt off the credit cards was important. We created four rules very similar to YNAB … rule #4 was “if we have to borrow money to buy something, we can’t afford it” and that goes for cars, vacations, credit cards, etc. (I’d like to include a house in that category, but then we’d be living in a dangerous neighborhood).

    Plus, once we wiped out the credit card debt, we are very motivated not to let it pile up again.

  18. Mary

    1) My dog got cancer. We just couldn’t bring ourselves to let me just die and we didn’t have an emergency fund, so we put his treatment on credit cards.
    2) I quit my job to be a SAHM, losing half our income. It took some time to decrease our spending to match our lowered income.

    • Mary

      If forgot the good part! I decided to get a grip on the debt and got YNAB last year. Through that alone I’ve been able to pay down $15,000. $7,000 more to go.

    • Paula

      I’m a YNAB user and LOVING IT! It’s been our salvation. So I hope it won’t be considered spam or trolling if I put in a word about cancer. Cancer in animals – the thought is now that it’s caused by same thing as in humans: sugar and high carbs (the answer’s been “under our noses” the entire time!). The Inuit and those living on their ‘traditional diets’ did not get cancer. As for animals, dogs (and cats) are obligate carnivores and should not be eating carbs (and as omnivores our consumption of them should be minimum). We just have cats but we feed them raw (with some canned tuna mixed in). For humans, LCHF is the way to go. Read Gary Taubes “Good Calories, Bad Calories” or his laymen’s version which is “Why We Get Fat.” He and his colleague Peter Attia have been given 26 million from a hedge fund billionaire to test LCHF against the gov’ts current recommendations (which are completely backwards).

  19. Rolo

    This is why I don’t agree with the assertion, “Knowledge is power”. I’ve done this twice and I never had any excuse/reason/catastrophic event to trigger it *and I knew better*. How did I get there? Purely, lack of discipline/not doing the right thing.

    Like Mark, wife & I use one credit card (Chase/Amazon) for purchases and it’s set to automatically pay the full balance when due (credit limit is added to our cash buffer). I always cash in the rewards as cash, which then goes towards our long-term goal budget.

    All of the other credit cards are locked in the fire-proof save (which requires a key and a combination to open) without their numbers, etc. being entered into any web site, LastPass–nothing.

  20. Ronnie

    Oh,so many reasons. In college it was purely stupid spending,on what I don’t even know. Got sued by Citibank for $1100 dollars. Went into debt consolidation for 3.5 years for a total of I think $5k in debt.

    In law school I was potentially MORE stupid. Ran up $11k in debt as an authorized user on my mom’s card, which she paid with the proviso that she would never do that for me again. I won’t say what I bought, but suffice it to say that I didn’t have to buy toiletries for 18 months.

    After law school it took some time to get a job, and I ran up $15k in debt. Most of it wasn’t for NEEDS, but keeping up appearances. I got it down to $4k, put the cards away and didn’t keep them on me, and then had two car accidents in 7 weeks. The insurances wouldn’t pay until the conclusion of treatment, so I charged the treatment to a card to make it easy to submit for reimbursement. Because I STILL hadn’t learned my lesson, there was more than just doctors appointments and physical therapy on the card to reimburse. The medical portion was paid in full, but I had thousands left over.

    Then I started my own firm and put $7k on a card to do so. The firm has since reimbursed me in full, but once again that’s not the only thing the cards were used for. Between the accidents and the business, I got the bills back to $17.7k, but for the first time I pretty much knew why. That was the balance in January 2011, it’s now down to $6.8k, and Lord willing, we’ll have it paid in full by October.

    We now use one card only for automobile expenses, since we figure we won’t likely spend more on gas or insurance just because it’s on a card. The card is an on-budget account, so that the funds are counted against the budget and we keep money available to pay the balance in full monthly. We’re slowly learning how to use credit cards responsibly and YNAB is helping tremendously in that regard.

  21. Douglas Lawson

    I ended up in debt from wanting to enjoy myself for vacation, buy a house for me and my fiance, and wanting a car that I wouldn’t have to worry about breaking down.

    Now we are barely making enough money to cover all our bills and debt each month, but somehow managing. We still overspend on categories such as food, alcohol, and other miscellaneous stuff. We normally do good till a breaking point or some small issue that makes us break down and give in. We are so in debt that I normally budget nothing to those funds, yet they always add up.

    We’re still mired down unfortunately. I’m slowing building funds back up so we can live on past months income, and I’m constantly thinking of ways to start making extra money. Though nothing seems to come to mind very easily.

  22. RBMT

    I always played the credit card company balance transfer game. Ten years ago you could on occasion win a few bucks by doing a low or 0% balance transfer, putting the money in a 6-month CD, then paying it off right before it expired. Now, we are not talking big bucks here, but given rates at the time, it could add up to $200 on an $8000 credit limit.

    Well, when I got married one of the first mistakes we made was not changing our spending habits and budgeting together. Next thing I knew, that last balance transfer expired and now the money to pay it off had been used (frittered away, in hindsight) and the interest began. I have paid more than 10x in interest any money I got playing the game.

    So now that the reality of the credit debt hit me, I came up with a “brilliant” plan to pay it off: Buy rental property with nothing down while in debt. The $24K down payment was put on the “other” credit card and locked in at 3.99% for the life of the balance. (You don’t see those offers much anymore, and for good reason!). On paper it all worked out with $100 per month income. Not much at first, but this was a long-term investment we told ourselves. On paper we did not account for a deadbeat tenant who did not pay 2 months rent and did a bunch of damage; an early snow that broke a tree branch and literally ripped the electric meter off the wall on a Sunday (ASAP and O/T rates for repairs); and a second child on the way convinced us we were not on the right path.

    We managed to sell the rental property right before the real estate bubble popped. Since we had been living at our same lifestyle level while feeding my other income into keeping the property floating, we now had $18K on one card and most of the original $24k down payment on the other. Fortunately the rental property sold for enough to cover the mortgage and commissions, but only about $5K left to put towards the credit cards. The positive news is that we have two paid off cars, so our debt payments were pretty much equivalent to the average family car payments.

    We have spent the last four years working hard to pay off that debt. It is still hovering around $20k, but that is less than half of our peak. Learning the YNAB way has taken out a lot of stress about money. Having that buffer in place allows me to have peace about paying bills without worrying about whether the check is going to bounce. What we could use is paying a bit closer attention to not overspending a few tricky categories. If we did that, we could pour more into debt reduction and get the rest of the weight off.

    You can’t borrow your way out of debt. Don’t let anyone try to convince you otherwise. You can also pile it up very fast, but it takes many years to pay it off.

  23. Trixie

    After a few job disasters, our credit card balances began to climb, as we had to make only minimum payments, and use them for some basic necessities. The thing that most people forget, when they beat themselves up over credit card balances, is that with the advent of those “universal rates” and other rate hike actions, you often end up owing much more than you originally spent. It took me a while to realize this. I kept thinking.. how did we spend that much? We didn’t. We just helped to create the huge balances by only paying the minimum on cards that suddenly saw a 29% interest rate, because of a late payment on another card that was lost in the mail. So important to lose the shame of being in debt, because until you do that, you can’t solve the problem proactively. I so look forward to trying YNAB soon… I’m ready.

  24. Jody

    Mine came with a divorce, no alimony and half the bills. He always made more than me but I still ended up with 50% of them. Then I decided to start in real estate sales just before the bottom dropped out of the world. No one in real estate training classes ever talked about what “being a realtor” was going to cost me. By the time I really sold anything I was in debt to everyone, the IRS, you name it. I am currently enrolled in ACCC, making progress, taking the original $28K in debt down almost $10K so far! I am still struggling though with YNAB and how to make it work in a less than steady income stream. I do not get a steady check every week or sometimes even every month, so not sure if this will help me or not. I admire ALL of you who have been able to become debt free. That is my goal, just not sure I will live long enough to see it happen!

  25. Bryan Giles

    I was in my 20’s (22 to be exact) in the 90’s when Quicken was on version 2 or 3. I don’t recall exactly it has been a while. LOL.

    Checkfree had just come out and I had direct deposit. So I faithfully paid my bills according to a preset budget and auto scheduling.

    Well Citiback Visa upped my $400 limit to $800 in 6 months then to $8000 in 2 years. I went nuts. Not to mention sears upping my limit, Hudsons, Lord and Taylor, JC Penney, My shell Gas card and so forth

    This was 1992 by the way. So I charged and charged and paid more than the minimum every month for 2 years. Year three came and things got rough. But they had increased my limits so much so that by 2005 I had over 50K in credit card debt…

    My minimum payments at the time were $4500/ month. My income dropped and ….. well you get the picture. We filed for bankruptcy after a year of trying to make those payment and restructuring, etc…

    NEVER again. Honestly I have gone over 10 years without ONE credit card. We did try to play the credit card game after that unfortunate life incident. But they cancelled us after a year saying we were deadbeats because we paid the cards off every month.

    Oh well…

  26. Logan Thomas

    I’m 26 and only 2 months of my life have I ever paid interest on a credit card (forgot what was going on those months but after 2 months I was back to paying off my statement balance each month). I currently have $5,300 in credit card debt. My main credit card I pay the statement balance each month. The 2 other cards with a balance are 0%. One of them is from a TV I bought in 2011 (that was stupid), but it had 3 years no interest and I’m paying enough each month to have it paid off before I have to pay any interest. The other credit card was used to pay for a privacy fence just recently and my new car registration back in January. It has 0% interest for another 10 months or so and I am paying enough on that to have it paid off before I pay any interest as well.

    After getting my two 0% credit cards paid off, my goal is to never carry a balance again and always be able to pay off the statement balance. I’ve started coming up with money to save for big purchases/trips instead of paying for those items with a 0% credit card and finding a way to pay that card off!

  27. Meg

    I’ve swam in all 3 of those pools of reasoning. In college, I “had” to use a credit card to pay for things like food, clothes, makeup, you know, the important stuff. Then I moved back home and my fiance and I got an apartment together. Hellllo Ikea! We bought lots of home decor with our credit cards because duh, you have to have a stylish apartment. And when my fiance ended up having to have emergency surgery, we used the credit cards for that. As of 2 months ago, we have paid off all 4 of our credit cards (snowballed the payments slowly but surely) and 3 are cut up and thrown away. With one in a sealed envelope for actual emergencies. It was a loooong hard road.

  28. LeiraHoward

    Several reasons. Don’t want to point fingers, as I have a wonderful husband who brings in the income while I stay at home, and I’m just as much to blame as he is. However, he is not a detail person, and somehow or other didn’t realize that he’d been carrying 4 figure credit card debt on his cards (he honestly thought he was debt free!). I found this out when I took over the finances after we married. I’d never carried a balance on a card in my life.

    After getting over the shock, I “realized” that our lives hadn’t ended, and unfortunately didn’t put the priority on getting that debt paid off that I should have. His job at the time entailed a lot of travel, which ran up the eating out expenses, adding more debt. We then moved several times, one of which required us to purchase appliances, then bought a house. The house payment was cheaper than renting, even including utilities, so we were going to save money… except that of course there were unexpected repairs. We did most of the work ourselves, but it still was over $20k in materials. (Most of this was financed on 0% cards which were paid off before the 0% period was over, so that worked out, but kept us from paying off the previously existing debt.)

    In amongst all this, we’ve also had three children, with the associated expenses that entails (clothing, diapers, food, more laundry and dishes, etc.) And when I got tired, it was easy to stop being disciplined at keeping our budget and just charge things on a card. We’ve never missed a payment and never been late, so we actually have an excellent credit history and great credit score. So that’s a plus, but meant that getting more cards was easy as well.

    End result: we’ve managed to get 22k in credit card debt. However, we’ve built up our buffer and with good management should be able to pay everything off in 3-5 years with current income levels. Probably less, as several fixed loans (education, automobile) will be paid off within that time period, and those dollars can get a new job. :)

    Having YNAB has been good as it lets us see more clearly as a family how our budget should work, and both of us are on the same page. It also lets me not be the bad guy when I say we can’t afford something, and lets us have some fun without feeling guilty.

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