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?
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