My Credit Card Debt As A College Student

Credit card debt as a college student

Like many people, I've made quite a number of money mistakes and getting into credit card debt as a young college student was one of them.

I was about 18 or 19 at the time, away from home with a part time job on campus that paid me $116 dollars every 2 weeks (the only job I was allowed to have as an international student). Fortunately, my parent's paid my rent and tuition, but my responsibilities were paying my phone bill and buying my own groceries which consisted of two simple items - Ramen noodles and Coke. Whatever I had left over was for me to spend anyhow I pleased. So after I paid my phone bill each month (~$30) and bought enough Coca-cola and Ramen noodles to survive every two weeks (~$40), I was actually fine until...I wasn't. (How i survived on this hideous diet I don't know).

At the time that I was in college, every major event or job fair always seemed to have an agent (of the devil) from the credit company with a booth set up decorated with balloons, offering free t-shirts and pens if you signed up for a credit card.

"I remember being lured over to one such booth where the lady told me I could get up to $2,500 of free money!"

I remember being lured over to one such booth where the lady told me I could get up to $2,500 if I only filled out this one form and I wouldn't have to pay the money back anytime soon plus I'd get this amazing t-shirt with the credit card company branding on it (to wear where?).

I immediately called home to tell my mother about the "basically free" money  I was being offered at school. Her response? "What could you possibly need in your life that you need to buy on credit?"

Well the next fair came around with another booth and another agent and again I was lured over by the freebies and supposedly free money. I explained to them my mother didn't think it was a good idea and they were like "but your mother never has to know - we can send your statement directly to your on-campus address", and with that I immediately signed up and was approved for $2000.

I cannot, for the life of me, tell you what I spent that $2000 on or how I spent it but I can tell you I maxed out that card very quickly. When I received my first statement a few weeks later I was perplexed. 24.99% interest on what? I had sleepless night for days thinking about my newly acquired debt and the fact that I didn't have a clue how I would pay it off.

To cut a long story short, I ended up having to tell my mother what I had done and then I had to use my meager savings and all of the spare money I earned and to pay it off (plus interest). As little as the $2000 seems now, thinking about it everyday caused me a lot of stress and it took me a several months to pay it off but I certainly learnt a worthwhile lesson.

At the end of it all my little savings was gone and I ended up paying back the $2000 plus 24.99% compounded interest which was way more than anything I purchased on the credit card was worth. Stupid.

Moral of this story: Credit card debt sucks if you don't have the means to pay it off in it's entirety each month.

Got credit card debt?

We've all make mistakes and maybe running up a credit bill is one of yours. Or perhaps you failed to plan and had to rely on credit for some important circumstances in your life. That's ok. Now it's time to make some changes.

Step 1: Forgive yourself for your mistakes
Step 2: Create a baseline emergency fund of $1000
Step 3: Create a plan to pay off of your credit card debt ASAP. See my post on methods to pay off debt HERE.

Your ultimate end goal should be to never carry a balance over and have a fully funded emergency fund of 3 to 6 months of living expenses.

When it comes to your personal finances, Ignorance is not bliss. It comes back to bite you in the ass eventually. Educate yourself about all your current debt and know the interest rates. Give yourself peace of mind knowing you have a plan to pay off your debt over time, and vow you are done with credit card debt once and for all. 

Bola Onada Sokunbi