Tuesday, 12 March 2013


Credit cards taught me an important lesson even if it was a hard one to learn.

When I turned eighteen I promptly received my first credit card offer in the mail.  It wasn't from my bank but was from an independent credit company who probably automatically sends every new eighteen year old a pre-approved card to suck them into their high interest trap.

I was fresh out of high school, hadn't gone post-secondary and didn't have a well paying or even full time job.  Of course I was elated to get a credit card with a limit of $500.  Within the first couple months of having it, they raised the limit to $1,500 without asking me if this was a good choice.  After a couple more months the limit was raised even higher to $2,500.

A teenager with a credit card limit of $2,500 is a recipe for disaster.  I was unable to keep up on my bills for my phone so I channeled those payments into the credit card.  It quickly got used up and I was relieved to receive a second pre-approved card in the mail from another independent credit company with a limit of $1,500.

I kept up with the minimum payments and lived with this debt over my head for years, but I was never able to put a dent in my debt because I simply didn't have enough extra funds to surpass the high interest that accumulated on each bill. 

With the wisdom of a head-strong teenager, I decided to apply for a third credit card (fortunately the limit never exceeded $600 or so) and I proceeded to use that to keep up with certain expenses while paying the minimum on my two other cards.

As these things go, I inevitably fell behind in payments with every card, which is surprising considering I was working part time in a minimum wage job.  I had multiple calls all day and on weekends about my payments going to collections etc.

In reflection, I fell into this bad situation because I was impatient and wanted immediate gratification. I wanted a credit card so that I wouldn't have to wait and save up money to buy something.  This, I believe, is a major issue with our society as a whole and the "buy now, pay later" motto has permeated our thinking.  It is now considered normal to have thousands of dollars of debts throughout the majority of our lives.  Partially this is because of the costs of post-secondary education, but also because we are encouraged to buy what we want immediately.

I have always been an impatient person (thank the Lord I have a wonderfully patient boyfriend) and my financial situation reflected that. I was reckless with my spending, living in the moment and not considering what my future would look like. Not only was I $8,500 in debt with my credit cards, I also had a $12,000 loan for my car hanging over me.  

If I had been in medical or law school, the debt would have been a bit more understandable because I would have been working toward a future of a better job, but these costs and this debt was incurred simply from me living a life style that I could not afford.

Ten years later I am very happy, yes thrilled, to report that I have paid off ALL of my debt, down to the last penny.  My car loan is gone: I paid the last payment off this month. My credit cards are gone:  I paid the last one off in January....and my credit score is very low due to the settlements I was forced to make with three different collection agencies.  

When I went to my bank to speak to them about getting a mortgage in the next five years, I was told that because of my bad choices made in my past it was going to be extremely difficult for me to broker a good mortgage and I would have to have a large down payment to offset my poor credit history.

Now I am living with this poor credit score and bad history but I am happy to acknowledge that I have learnt my lesson! It was something my parents tried to drum into my head over and over and over again while I was younger...don't buy anything (other than a house), unless you have the money to completely pay for it.  My dad practiced this principle even when buying cars!  We always had pre-owned vehicles but my family was free of debt.

Debt is a yoke around our necks that we are far too comfortable with.  Debt is a chain (or chainS) that we have enslaved ourselves in.  Freedom from financial obligation is a beautiful thing. I know that I will have to eventually get another credit card and will slowly build my credit score back up, but I now know the truth... What we want, material things that we desire, will be there weeks or months later when we have the money.  If they aren't, we aren't meant to have them.

We are called to be wise stewards of our money.  From now on, I will be asking my parents their advice because I should have listened to them ten years ago! 

I hope you find your freedom one day too, because it's such a great feeling!

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