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

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.)