In our Money Mic series, we hand over the podium to people with controversial views about money. These are their views, not ours, but we welcome your responses.
Today, one woman who had been in debt all of her life—to the tune of $100,000—tells us how she got there in the first place, and how she made a pact with herself that helped her pay off her last credit card by age 40.
I’ve been a debtor all my life.
My parents first met at a financial loan office—my dad issued loans, my mom worked in the office. They divorced when I was 10 and my mother was left to raise two daughters in Cincinnati, Ohio on a $20,000 a year salary. Money—or the fact that we didn’t have any—was a constant topic of conversation. My mother turned to credit cards to feed, clothe and house her daughters.
So when I was a 19-year-old freshman at Ohio University, I didn’t see the danger of debt. When a credit card company arrived on campus to sign students up for cards, I grabbed a clipboard, filled out the paperwork and got my first card on the spot. My only income was a campus job that paid minimum wage—$3.85 an hour in 1992. I also had student loans since I was paying my way through college. But I didn’t see the potential trouble of having a credit card of my own. To me, credit meant power.
In my skewed, adolescent logic I decided I would pay for food with cash and everything else with my credit card. I lived in a student dorm and so bought things like a crock-pot with my card, inching closer to my initial $10,000 limit.
By the time I graduated in 1995, with a degree in social work, I had $15,000 in credit card debt and owed $52,000 in student loans. As the first person in my family to graduate from college, I was proud of my accomplishment. I moved to New York City to start my life. That first year, I earned $21,000 working three jobs, one at Old Navy. The credit card company bumped up my limit to $20,000.
Living My 20s in the Red
The debt didn’t worry me. At 22, I decided would be just like my mother and live my life in the red. Looking back on it now, I realize I was rationalizing self-destructive behavior. I was blaming the universe for my own decisions. But I also have compassion for that younger me. I had never had a good, financial role model—I didn’t know another life.
In 1996, I started graduate school at Hunter College in Manhattan, taking out $13,000 in student loans to pay for a Master’s in social work. My 20s became a blur of debt. I was working two or three jobs at a time just to pay my credit card bills. I was juggling multiple credit cards, moving debt whenever I would get a 0% interest teaser offer. By my late 20s, I owed $50,000 in student loans and $25,000 in credit card debt.
I also smoked, drank too much and gained weight. On top of that, I found myself in a bad marriage (I had even paid for the $8,000 wedding on my credit card). I paid my $1,200 attorney fee for the divorce with a credit card, too. But what difference did another thousand dollars make? I could never live the life I really wanted anyway because I had this albatross hanging around my neck. I was a slave to a big, red number that just kept growing and I didn’t feel able to control it.