Since this is my first post, I’ll start at the beginning. As a freshman in college I got my first credit card, with a limit somewhere around $400. I remember my first purchase: A rocking chair. Yep, I took on debt to look geriatric at 18. It wasn’t the rocking chair that did me in; it was the rush of being able to buy anything I wanted without paying for it. Within a few months I had blown past the limit on the card and was completely unable to make the minimum payment with my $4.50/hour job. My parents bailed me out and I was hooked. I immediately began charging the card up again.
Though I managed to always make my payments on time, I was steadily accumulating debt. I was paying for college completely on my own, so I would take out a student loan at the beginning of the semester, pay down some of my credit cards with the cash, and then spend the rest of the semester piling the debt back onto the cards. By the end of graduate school I had no idea how much I owed, but I felt confident with my new professional job and salary. I rewarded myself with a new pair of $500 high heels (a fact which I am now mortified to admit).
Then it all came crashing down. My student loans came due. I would get my paycheck and sit down to pay bills, but my paycheck could no longer cover even half my monthly debt service. I was unable to sleep and petrified to tell anyone, especially my then-boyfriend. Finally I buckled under the stress and confessed everything, bawling my eyes out in the middle of the night. He gave me an ultimatum: get rid of the debt or we were through. We had been dating for 6 years and were deeply in love, but he knew I had a serious addiction. The threat of losing everything saved me.
For the first time ever, he made me write down all my credit card balances and the corresponding interest rate. The amount was staggering: over $17,000 in credit card debt and about $140,000 in student loans. My interest rates weren’t too bad, due to my timely payments all those years and a low federal interest rate.
I threw myself into debt reduction mode. I put all my credit cards into a box that my boyfriend hid. I wrote a list of all the people I was hurting with my debt on a piece of paper and put it in my wallet where my credit cards had been. I ranked my debts by interest rate and began paying off the highest card. I called my student loan companies and asked them to reduce the payments. I called the credit card companies and asked them to lower my interest rates. I quit spending money. And it was HARD. It went much deeper than being denied a few splurges at the mall. I had linked my self worth to my net worth, and with credit cards I had felt rich. Now I felt worthless and lost. I had to change every aspect of my life and it felt like I was losing everything. Thank God my boyfriend was there to support me. He helped me get through the really rough times and gradually helped me see more clearly what I had done.
With the new lower payments, I was able to use the extra cash to pay off my highest rate store cards first. With each card paid off, more money was freed up to pay down the next card. Today, my credit card debt stands at $14,800. I have paid off 16 credit cards and have 5 remaining. I haven’t used a credit card to pay for anything in over a year. My student loans are down to $136,000. Every month when we pay bills we record our current debt on a spreadsheet in Excel and track our debt reduction with a graph. It feels great. But the real reward came this Christmas, when my boyfriend showed he trusts me again by asking me to marry him. As for the ring? We saved for months, he paid cash, and it’s beautiful.