Friday the 13th was a pretty good day for me: I made the very last payment on a credit card I have had since 1996. (Yes, I am old.) I remember how I got that credit card — it was my first, see. A Very Nice Lady from the bank called my dorm room telephone and asked me if I’d be interested in applying for a student MasterCard, special for college students. And so I did. I have to imagine the bank had the telephone numbers for each and every dorm room at my school and they probably cold-called everyone. At any rate, I opened up the account — a modest $500 credit limit, only to be used in emergencies — and my life as a debtor began.
(I’m sure you’ve heard stories like this before or went through something similar yourself. This is America, after all. I am neither interesting nor unique in my past financial problems, but I’m going to write all about it regardless of just how very unremarkable I am. I think it might be helpful for anyone else who is going through the same thing and I know it will be helpful for me.)
I had the best of intentions for my shiny new MasterCard and I certainly did not plan to use it for any frivolous spending. I only charged what I could afford to pay off each month. The first purchase I made that wasn’t immediately paid off was a set of tires for my superfly 1987 Chevy Calvalier. A legitimate expense, I am sure you will agree. (And one sweet, sweet ride, which is beside the point.)
Over the years, of course, my attitute toward the card and toward my spending relaxed: I was a scholarship student working part time jobs around town for spending money, most of which went for things like books, art supplies, gas, and basic expenses. I was 100% financially independent from my parents, and proud of it. This meant, though, that I didn’t really ever have cash for frivolous things like shopping, clothes, or restaurant meals, and as I got more comfortable with charging those things, the bank continued to increase my credit limit to accomodate my habits.
You can guess, of course, that trouble ensued. I used the card a lot when I lived in Germany junior year. I received a modest stipend from my German university to help with living expenses, but my student Visa didn’t allow me to work there, so I put a lot of things on the credit card. When I graduated college and moved to Oregon for my PhD, there was a 6-week period where I hadn’t yet started my teaching fellowship and couldn’t find a job around town, so ALL my living expenses went on the credit card. Ouch.
Throughout graduate school, I wound up opening up other, smaller credit cards here and there and debt just kept mounting. The $800 monthly paycheck from my fellowship was not cutting it, and the spotty part-time summer employment, even with the help of student loans, still wasn’t enough. Unfortunately, I was essentially unwilling to live the frugal, ascetic lifestyle I would have needed to embrace in order to avoid taking on any more debt. And really, who cared, right? As long as I could afford the minimum payments, and could keep charging things, why worry?
(Ahhhh ha ha ha ha ha ha ha ha. Weep.)
Soon enough, though, I could not afford the minimum payment anymore and the card was totally maxed out. Um, oops. At that point I had to figure out some kind of plan of action. Or, maybe instead of figuring out some kind of plan of action, I could, like, maybe just ignore the situation instead? Yeah. Let’s try that. Ignoring the problem (and the letters, and the phone calls) would be just fine.
At some point, things came to a head. I had to actually talk to the bank, on the telephone, like a real grown up lady. I had to look at the actual numbers, instead of squinting at the bills through my nearly shut eyelashes. It was terrifying. There was no way I could see to come correct with this account. The minimum payment alone was more than my rent, both of which were more than half my paycheck. Rent + minimum payment > paycheck. This = problem. Even I, financially challenged as I was, could figure that out.
But when I spoke to the bank, they actually helped me. I in no way expected this, but they made it work. The account was closed and I started a five-year, fixed payment plan, after which the entire balance would be paid off. The interest rate during this period was a mere 3.9%.
I still felt like I’d never get it paid off — the payment amount they set for me was not as cripplingly high as the old minimum had been, but it was still a pretty painful number to think of. Nonetheless, I knew I just had to hold on for five years and I’d be done with it. During that time, I finally figured out how to limit and budget and make my life work with the money I had coming in. It helped that during this time I got a real, post-grad-school job.
Over the past two years, I’ve also been working on paying off another credit card from the grad school years — the second one had a balance only 1/4 as high when I closed it and the payment was only 1/2 what the bigger one was. Coincidentally, I made the final payment to that bank in late December. Between these two credit cards and my student loans, I’d been paying about $850 a month toward debt, all of which was incurred while in college and graduate school. Ouch. As of now, though, I am down to only two things in the red-ink column: student loans (which I’ll be paying for the next 9 years), and dog surgery bills. It feels really good. Damn that dog surgery bill, though! I should have nothing on the books right now except my student loans. But I hope to have them paid off completely by the end of 2012.
What’s interesting to me is that the worst of the debt was incurred and mismanaged during the very same years that my weight balloned up from my healthy size to the fattest I’ve ever been. And then during the same years I spent paying off the debt, I got myself back on track with health, nutrition, and fitness, and I lost 120 pounds.
(Hmm, I’ve shared the amount of weight I lost — should I share the amount of debt I paid off? I’m not sure I feel as comfortable with that number being public. Let’s just say… I could have bought myself a fully loaded 2012 Toyota Prius for that amount.)
I have no doubt that these two things, weight and debt, are connected; after all, they are also two of America’s most-noted problems. We are all overweight and in over our heads with debt, too fat and out of shape to climb out of the hole we’ve dug, or so says the news. I won’t wax on about the nation at large, but I can refer to my own case: quite simply, I had a problem with overconsumption. I was not able to limit or to budget, either when it came to calories or to dollars. I was not able to say no — to another beer, to a basket of fries, or to putting the bar tab on my credit card at the end of the night.
As I write this, however, I have a very managable debt situation and I have maintained my weight loss, give or take five pounds, for over 18 months. This is proof that no matter how big a hole you can dig for yourself, there is always the possibility of climbing back out. In both cases, coming face to face with the numbers, no matter how frightening, is a solid first step.