During college and my early 20s, everyone seemed to own a credit card. Everyone else was racking up points, getting bonuses, and working on their credit score. But, you know what else the majority of them were racking up? Yep, you guessed it, credit card debt.
With student loans already lingering like a cumbersome, heavy-breathing dragon on my shoulders, I was terrified of even the slightest chance of piling on more debt. I stuck to a good old debit card with overdraft protection (which as a side note, if you don’t have turned on, go to your bank account and flip this on so you never pay another $35 overdraft fee). While not the most popular approach, this forced me to always spend less than what I had in my bank account, which became the foundation for how I budget today.
There were lots of challenges to not having credit cards. A lot of people thought I was nuts when I told them about not having a credit card because I wasn’t building my credit or getting airline points (where’s the fun in that?). To be extremely honest though, the hardest part was to have Instagram and social media constantly bombarding my feeds with unrealistic expectations on how I should be living in my early 20s. Fancy brunches, beautiful clothes, extravagant trips, etc.
But being fresh out of college, I was definitely not making the type of money to afford that lifestyle, and it is never worth sabotaging my future to convey a false image for other people. The temptation was so strong, that I know if I had opened a credit card, I would have been hit with that 18-24% interest fee on stupid charges and I’d probably still be paying it off years later.
No, it’s true I was also not building credit, but I also was not (and still not) in the market for a house anytime soon, so it was not enormously detrimental to my life stage. I have since been able to build great credit.
Never forget, credit card companies pour millions of dollars into trying to get you to open another credit card. Every month we see enticing offers all over the web, but don’t forget they make a TON of money off of your interest payments. Do not open a credit card unless you can pay it off in full and never pay a cent of interest. Once you are in a position to use a credit card and pay it off without incurring fees, there are many benefits of carrying them. I’m a fan of the Points Guy and the many ways they explore credit card benefits.
Be Warry Of Credit Card Debt
These are some alarming facts about credit card debt:
- The average credit card balance was $6,506 in 2018.
- Total revolving consumer credit debt reached $1.057 trillion in March of 2019.
- Can you guess all the types of fees credit cards can snag you with?
- Annual Fees
- Late Payment Fees
- Balance Transfer Fees
- Foreign Transaction Fees
- Cash Advance Fees
- Over-limit Fees
- Returned Payment Fees
If you or a loved one are carrying credit card debt, first – take a deep breath. Second, come up with a plan and stick with it to eliminate credit card debt and stick with it!
Check out additional topics to make personal finance SLIGHTLY EDUCATIONAL on our Personal Finance page.
