Guest Post By: Bog Of Debt – A 27 year old tackling debt head on and sharing her journey.
When I was able to open my first credit card, I was on top of the moon. The card was entirely for “building credit” or so I told myself. I eventually slipped farther away from the goal of building credit and closer to buying things with money I didn’t have. Then came this offer while I was shopping at JC Penny.
The conversation went similar to this…….
Store Clerk: Do you have our store retail credit card?
Store Clerk: Well would you like to sign up for our retail credit card?
Me: Well that depends….hmmm
Store Clerk: We offer 20% off your first purchase if you’re approved plus there are many deals only valid for our card holders.
What is a retail credit card? A retail credit card is a card offered by a specific store or department store and they offer you special deals and discounts for using their credit card!
Instantly dollar signs started going off in my eyes! I had the cash money for the clothes I was purchasing and my bank credit card was almost maxed out so I couldn’t use that. Then here this lovely sales clerk offering me a chance to SAVE money and purchase the clothes without using the money I had to pay for this purchase. Instead, I could buy something else with that money. How awesome was that! Of course I had to be approved first with a credit check, so I attempted it and was approved instantly.
Nifty, this might be the best first credit card for retail! I saved 20% off my first purchase later learning that I would get that 20% off all purchases that day then left to go to the book-store. I used the cash money I had for my clothes to buy books and thought about that extra bit of money I could save. So back to JC Penny’s I went and I shopped. I ended up spending about half the limit on the credit card that day. (It was a $250 credit limit)
From that point forward it just got worse. Every time I would get the credit card bill for the minimum amount due of $15 I’d send in $30. I would justify the debt by saying that I was at least doubling my minimum payment and that would help me reduce credit card debt. Then, off again I would go to the mall spending more money on that retail credit card.
Eventually, the credit limit on my retail credit card was increased to $1500. I also found out I could use the credit card at a local drugstore when I didn’t have money in my bank account and “needed” something. The word “needed” translated into purchases such as a various pictures and frames. Let’s not forget when they were having a going out of business sale and I needed $200 worth of “stuff”. All this shopping did was put me back at square one, back in debt. I needed to find a way to get out of credit card debt, fast!
Sometimes I would put the credit card down and pay off a chunk of the bill over a period of a few months. Then before you know it, I’d slip right back into that same cycle of buying then making a minimum payment (of which I was no longer doubling but maybe adding $5-$10 extra) and purchasing more stuff. I racked up enough debt on the credit card and when I lost my job it was the first credit card I stopped paying. Certainly not something I would recommend nor the smartest idea I had at the time, but I learned from that lesson.
I look back at my first store credit card and use it as a learning experience in my life. I spent much more than I could afford and it’s costing me to this day to get off the debt train and back to common ground. If I could do it all over again I would walk away from the credit card spending sprees and pay the credit card in full each month. My debt is making me a stronger person through this journey out of the debt hole and I hope I can inspire others along the way.
I now understand how to budget and I wouldn’t make the mistake again of spending more than I earned or could afford. Looking back I didn’t own those clothes or pictures, the credit card company did, something people fail to see. I was buying it from JC Penny at an increased cost to myself simply by paying the minimum payments. Now when I purchase a picture frame or an outfit, I love knowing that it’s mine because I bought it with money I earned and not wished I had by using the retail credit card.
What Credit card mistakes did you make and learn from?
Are you NEW to Canadian Budget Binder?
If you are new Start here!
Do you have a Question for Mr.CBB please click HERE to ask him!
Are you on Mr.CBB’s Blog Roll? Check HERE… if not and you want me to check out your blog and add you to my ever-growing blog roll simply click here and fill out the form. Introduce yourself and lets LINK UP!
Photo Credit: Copyright (c) <a href=’http://www.123rf.com’>123RF Stock Photos</a>
- Money Fights and Money Problems (canadianbudgetbinder.com)
- Why We Want To Pay Off Our Mortgage Early (canadianbudgetbinder.com)
- Rebuilding Life and Finances After Surviving A Divorce (canadianbudgetbinder.com)
- Mr.or Mrs. Money Bags… Is that you? (canadianbudgetbinder.com)
- Reader Question: How Much Debt is Too Much Before You Need To Budget? (canadianbudgetbinder.com)