Okay, so I laid out my credit debt in my first post. Now I'm going to talk about how I got there.
My first experience with debt came with a Citibank card I obtained in college, with a $800 limit. I immediately began spending on it, the most memorable purchase being about $100 worth of music cd's. Awesome! Fast forward to 2 years after graduation (1999)...I now have 2 department store charge cards, a student loan, and I've overrun my credit limit on that Citibank card. Oh yeah, and I've defaulted on paying each debt. Some harassing phone calls and letters, and I put myself in a debt paydown program with Union Financial. Pay monthly, yadda yadda, it's 2001 and I am debt free! How cool is that??? I'm also living in NYC with my boyfriend, my rent is ridiculously cheap, and I finally have money to play with.
Okay, so 2002, I decide it's time for me to get back into the credit game. I apply for a Providian card and I get it! It is such a nifty card- translucent green, sparkly-I'm hooked. $1000 credit limit. My first expense is an emergency trip to England, boyfriend has an ill mother.
Without going into details that I frankly can't remember, let's fast forward to 2005. I've managed to obtain several more credit cards, and have balances on all of them, mostly from balance transfers and some spending (some foolish like trips to Sephora, some necessities like groceries). I decide that I'm going back to school for massage therapy. How am I going to do that? Student loans to cover some tuition, credit cards to cover the balance, and pay for supplies. My paycheck is being used to cover my rent, my partying, and my credit card bills. As I'm charging away from 09/05 to 12/06, I consciously choose to ignore the credit card situation and just get through school, which I do. I graduate in 2006, and 2007 is my year to clean everything up.
Well, let me tell you that waking up in January 2007 and looking at the state of my finances was no fun at all! I had 7 cards, over $20G in debt (which I still have), and my highest interest rate was 29.99% (thank you, J.P. Morgan Chase!).
Over the next 12 months I somehow managed to get up to 9 cards, increase my debt, and find a job where I'm barely making enough money to eat. Excellent, really excellent.
So, here I am, 2008, worse off than last year. Well, maybe not worse. I'm down to 7 cards. I paid off the other 2 through balance transfers and scrimping. My highest APR is 19.9%, my lowest is 0%. I've been communicating with my credit card companies and requesting lower APR's (I'd just like to send a big "#*!^ you" to WaMu for not honoring my request to lower the APR). What else? I am somehow managing to pay my rent and my bills.
The downside is that I don't really have a plan for paying down my debt because I don't have a budget. I don't have a budget because I don't know what my paycheck will be every two weeks. I work as a massage therapist, and get paid by the type and number of massages I do. For example, I make $35 on a 50-minute massage, $52.50 on an 80-minute. Type and number changes every pay period, so I NEVER KNOW.
A Brief History of [My] Debt
February 5th, 2008 at 06:54 am
February 5th, 2008 at 07:02 am
February 5th, 2008 at 07:14 am
February 5th, 2008 at 07:24 am
First, thank you for your comments!
moi aussi: I've been taking steps to generate private clients, which would help out tremendously. So far, no bites, but I'm hopeful.
ceejay74: That sounds like really good advice and I'm going to give it a shot. A budget would be really good for me to have at this point in time.
February 5th, 2008 at 07:50 am
When you get your paycheck, fund the different categories. Don’t spend more then what’s in your categories.
You have to start somewhere. The first months are the hardest. Keep the focus!!! You have to have time for your mindset to change. I used to buy 2 coffees everyday. Hey, it wasn’t big money. But my mindset has started to change. Hey I could use that $4 a day to pay down debt. Then it starts rippling through all of your decisions.
Good luck, but it’s important to start a budgeting system. Try the envelope system.
February 9th, 2008 at 09:11 pm
if that makes sense.
February 15th, 2008 at 11:32 pm
May I ask if your student loans are part of your debt total (the 0%??). If not, are you paying on the student loans as well as on the credit cards?
Not having any idea of what your income is per month and what is left after rent and necessities, it is hard to offer anything based on "reality" -- but: just for your own peace of mind, I second the idea of taking a second job (even if it is the primary job) for awhile while you pay off your debts. Massage therapy will be fine when your cost of living and monthly expenses do not include credit card payments. But for now, a steady income is key to what you are trying to accomplish.