Like many before me, I acquired my first credit card when I started college – offers started coming in the mail shortly after registering for my first semester. I had no established credit, so I had a low limit. I trusted myself to be responsible with it, and vowed not to be that person, who was reckless and lived beyond their means. I’d heard enough horror stories to know I didn’t want to go down that road. I tucked that first credit card into my wallet, behind my debit card, to use only in case of emergency.
The change from keeping it as a security blanket, to using it for spur-of-the-moment splurges happened all too quickly. I initially managed to keep up with my balance, paying in full, because I knew only paying the minimum monthly balance wouldn’t get me very far. But it slipped away from me, and once I lost my grasp, the payments became less and less manageable. I was fortunate that my limit wasn’t too high, or it could have been much worse.
I was working full-time as a department manager at a retail store, and rooming with my cousin while attending classes. I wasn’t able to receive any federal grants because I was still considered a ‘dependent,’ and my mom’s husband made too much money for me to be considered for financial aid, even though neither of them paid for my education. So I was trying to pay tuition for my classes out-of-pocket, using the income from my full-time job. I was barely keeping my head above water, and my credit card quickly became a crutch.
I came across a solution while trying to bail myself out of the mess that became of my first credit card. It was a long time ago, but I came across something that recommended literally freezing your credit card in a container of water. Aha! It was perfect for me. This way I wouldn’t be able to just whip my credit card out of my wallet in a moment of weakness – it would be safe at home, and I would have to wait for it to thaw before I could use it (the ice obscures the numbers). While waiting for it to thaw, I could think through the purchase – was this really something I needed to buy? Will I be able to pay for this next month? Is the purchase worth putting myself in more debt, and possibly damaging my credit?
It worked well initially, but being that I was 20, and had the financial goals, and mindset that came with being a 20-year-old, it didn’t last long. I kept thawing the block of ice. Soon enough, the card was maxed out and I couldn’t keep up with the payments. I decided a more responsible decision would be to cut up the card, set up a payment plan, and stay away from credit cards until I could be more accountable.
Looking back, there are a lot of financial decisions I would have made to avoid these mistakes. I would have budgeted more carefully, made wiser purchases, and applied for more scholarships. Nine years later and climbing a mountain of student loans, I am working on restoring my credit (which has also been damaged by my divorce). I’ve opened my second credit card to rebuild my credit. As soon as I noticed my old habits creeping back up, I knew it was time to pull an Elsa and make sure my credit card was frozen. It was time to try the freezer trick, and this time, actually vow to stick to it. I’ve put all my recurring monthly bills on the credit card – internet, car insurance, and phone – and set them up for automatic payment. Every month, I pay off the monthly balance. If there is an emergency, I will thaw my card. But, hopefully, all will run smoothly, and it will stay frozen.
I’ve come along way since buying rounds for my friends on that first credit card. I have a 401(k), and plan to purchase my first home in 2-3 years. I now have a daughter, and I want to have a space where she can have sleepovers and a treehouse. I have a monthly budget that I closely monitor and do my best to stick to. Not only do I recognize my financial weaknesses when they arise, but I am actively working on them. I highly recommend freezing your credit card if you are someone who struggles with using it on impulse – it belongs in your freezer, not your wallet!
Joy has been financially independent since she was 18, and has been through all the ups and downs that come with it. She is a single mother to the best five-year-old sidekick anyone could hope for.
Image via Flickr