How I Got Into (And Out Of) $10,000 Of Credit Card Debt At Age 22

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When I was 22, I was £6,000 ($10,000) in debt.

It started with a credit card. As I graduated high school, at 18 years and 3 months old, I went to the bank – on their invitation. This was pre-2008, so before everyone found out money really doesn’t come for nothing, or that borrowing doesn’t have consequences. They gave me a credit card, that day, with a limit of £1,200, and I promptly went and bought a plane ticket to Sri Lanka, maxing it out.

I didn’t know any better.

I didn’t understand how credit and debt worked.

I was fucking dumb.

I thought the concept of “free money” was quite glorious, and so when Amex asked if I wanted a credit card with them, too, I snapped it up. That one had a limit of £1,500. I can’t even tell you what that money went on: clothes, maybe. Dancing, and nights out. It certainly didn’t get spent on anything that I own today, now. That money – and all it paid for – was absolutely ephemeral.

The bank offered a small overdraft, which I accepted, and when I maxed that out I got an account at another bank, who also gave me a credit card. It spiraled and spiraled and before long I had three cards and two overdrafts. No money I earned was my own – it all went on interest.

Blatantly swimming in debts I was struggling desperately to keep up with, my bank suggested I take out a £5,000 loan to pay off the credit cards I had. That way, they said, I could then manage it by making just one monthly payment right to them. Of course, the inevitable happened: I paid off the cards, but because they still sat in my wallet, I gradually started to use them more and more. Before long, they were pretty much maxed out again.

I was in over my head.

In a tale as old as time, I hid from my debt. I did not tell a single living soul how bad my situation had gotten because here’s the thing: I’m not technically an idiot. I’m actually really, really smart. And I thought only stupid people couldn’t manage their money. It never occurred to me that I’d never actually received a financial education: I’d never been taught how to budget, how to manage money in and money out. It was just sort of a given, from within school to family to what I read online, that cash flow was this one single thing: spend less than you earn. I didn’t understand the nuance of it, how good credit and bad credit worked.

I cancelled the direct debits designed to chip away at the money I owed, and for almost a full year ignored that the debt existed at all. I don’t know what I thought would happen. That if I stuck my head in the sand long enough the whole sorry mess would just… disappear?

I was so embarrassed. Mortified. It took a pile of demanding letters from the bank on my parents’ doormat for me to finally admit – in a way that made me sick to my stomach –how out of control the situation had gotten. Mum and Dad sat me down one day and said two things:

  1. They would help me, so I could stop sobbing because it would all be fixed, soon enough.
  1. I’d have to pay back every single penny to them, so that I understood exactly what money – having it, not having it, saving it – meant.

They generously paid off the credit cards and loan, and I was in a position during my university holidays to go and teach English in Italy – a £20 flight from the U.K. I had my room and board covered, and so after an allowance of €50 a week, the rest of my paycheck went to my parents. I had to do that for three full summers to pay back what I owed.

It took another year or so for me to pay off both overdrafts, and then suddenly every penny I earned was mine. Finally. At 27.

Before, I had such a distant relationship to money because it never really belonged to me. Now it does – and it feels great. As my paychecks add up in my account, I’ve finally got the hang of saving forty to fifty percent of what I make, because that’s nothing compared to putting 99% of what I made into paying off debt. I have a savings account for the long-term, a “fun fund” for frivolous adventures and shopping trips, and my current account is there for day-to-day stuff, but I take out my “spending money” every Monday morning and tell myself when it’s gone, it’s gone.

I know exactly where every penny goes, now, and I feel all the wealthier for it. It wasn’t until I took control of my situation – until I asked for help with my situation – that I understood the pressure it put me under. How much it weighed on my mind.

  • jdub

    I’ve been there. Not this exact situation, but I got in wayyyy over my head (about $15,000 over), and just kept ignoring it and dodging calls and making excuses. My parents finally had to sit me down and tell me that I had to deal with it, because it was starting to affect their credit, as my mum had co-signed on a loan for me back when I thought I was responsible enough to handle it.

    They generously paid off everything for me– about $15,000 total– with their line of credit, and I’ve been paying them off $500/month since then. I jacked it up to $600 and have 2 months left, after 2 years and a bit. It feels amazing, and I’m so excited to start fresh and have actual money and be able to make responsible choices that are good for me long-term, rather than the opposite.

  • disqus_FDRppzxtNJ

    You sound like you’re assuming only dumb poor people can’t manage their money.

    • Cortney

      Yeah, I kind of sense that too. I mean it’s a good article and I enjoyed the read, but you don’t have to be dumb to get into debt or mess up your finances. The fact that this blog exists is a testament to that – it can happen to anybody. We’re humans and even the most intelligent of us can fall victim to the instant gratification that comes with credit cards and “free” money.

    • Carly

      I feel like she thought that before and has realized that due to the complete lack of financial education we receive that it happens to everyone.

      ‘And I thought only stupid people couldn’t manage their money. It never occurred to me that I’d never actually received a financial education:’

      Thought being the operative word.

  • Monika

    In regards to teaching in Italy, which agency did you work for? I’m looking to travel to Europe this summer and I wouldn’t mind teaching English during my stay.

    • Laura Jane Williams

      Hi Monika – I worked for a company called ACLE (www.acle.org). Their financial compensation ins’t what it used to be, but it was the experience of my life!

  • I Like Pizza

    It must be nice to have parents who will/can help you, seriously. Yes, I’m envious of folks who have paid off debt that way, but if I had that opportunity, you’d better believe I’d take advantage of it right away. I got in debt for the same reasons, but to the tune of a much higher number (~$50,000), and only in the past year have made any headway in paying it back, and my family can’t help me. You’re right that nothing gets better till you take control of the situation!