How I Dug Myself Out Of Deep Debt And Depression
Like many young people heading to college, desperate to claim independence and responsibility, I thought getting a credit card was the way to do that. The summer between my freshman and sophomore years of undergrad, I got a credit card with a $4,000 limit and 32 percent interest rate. I had only secured a work study job that paid about $ or $8 an hour.
Yes, I know.
I had no clue what I was in for.
The results of that poor decision landed me in about $7,000 worth of unnecessary credit card debt and a deep battle with depression. I mean, DEEP. It wasn’t until about 3 or 4 years later that I actually started doing the work to get myself out of the hole I had dug. It wasn’t easy, but it was rewarding. I am by no means a financial guru – still learning. But here are some of the lessons I learned that served me well:
1. Talk to your creditor. No matter who you borrowed the money from, they want it back and if you show that you WANT to get it back to them, they will assist you. Whether it’s lowering the monthly minimum payment or getting you on a fixed payment plan to catch up – your creditors will work with you. So, please – WORK WITH THEM.
2. Pay more than the minimum balance. I made the decision to sacrifice for many months in order to pay down my debt. If the minimum was $30, I would forego eating out that month and pay $100. Not only did this lessen the time it took to pay down my debt, it taught me how to budget and stay disciplined with my spending habits.
3. DO NOT MAX OUT YOUR CREDIT CARDS. Especially if you have more than one. Maxing out to the limit is never a good idea. Leave yourself some slack just in case and pay your credit off each month. My general rule of thumb is to use less than 30 percent of my credit card maximum. This looks good to credit bureaus and allows me to be able to pay off my card in full each month it is used with no problems.
4. If you want to use a credit card to build credit, try a credit card that gives rewards or cash back for certain purchases. Some credit cards give as much as 3 percent to 5 percent for purchases made with select retailers. Who doesn’t want to get money back for purchasing everyday things like gas and groceries?
5. Take advantage of special promotions and free activities/events. Cable providers, certain teacher’s unions, and even your bank offer discounted and sometimes free admission to movies, Broadway plays, museums, festivals, etc. – not mention discounts on a variety of products and services. Visit the websites of any or all of the different programs and unions you’re a part of. You’d be surprised how much you can save by simply asking about promotional options.
La Truly is a writer, college professor and young women’s empowerment enthusiast. She mixes her interest in social and cultural issues with her life experiences to encourage thought, discussion and positive change among young Women of Color. Follow her on Twitter: @AshleyLaTruly and check out her site: http://www.hersoulinc.com.