Updated: Oct 1
My name is Christina and I am a debt-oholic. It all started my first semester in college.
I was walking to class minding my own business, when I happened upon a display table and some smiling faces advertising MBNA credit cards. The nice people at the table asked me if I had a credit card, and I said no because I was only a few months past my 18th birthday. They proceeded to extol the benefits of these magical cards. There were reward points, a low variable interest rate, and they were giving away free t-shirts! I was hooked!
At 18 years old I was approved for a $500 credit limit.
At the time that was a huge amount, but it was manageable. If I maxed out the card I could pay it back within a few months. However, I didn’t know that the credit card company would raise my credit limit at their discretion. The worst part was that when I saw each credit limit increase, I celebrated it! I was adulting! I never considered how much trouble it would cause.
Over the next four years my credit limit went from $500 to $12,000!
Imagine your 22 year old child living on their own in another state (I went to college in Florida), with a $12,000 credit card. Frightening, I know, because I used up every penny of that credit limit. I went shopping, treated friends to dinner, rented cabanas on the beach…you name it I bought it!
This created some really bad habits that lasted into my thirties.
If I didn’t have the cash to make a purchase, I felt compelled to reach for that credit card. It was an addiction. I couldn’t say no. Today, at 39 years old I am finally able to say that I am credit card debt free! I had to make some commitments to cut out things I didn’t need, and I needed support from others in my life to help me curb the spending cravings.
Here are two rules that I share with all my clients.
I want everyone to remember these for yourself and I ask you to teach your children.
Rule #1: Call your credit card company and tell them not to increase your credit limit without your permission.
Rule #2: If your credit limit is high enough that it would create a financial burden to pay it all back, lower it! Call the credit card company and tell them to lower the limit to an amount you choose.
In this new year it is time to take control of your access to credit. It is also time to ask for support. Click here to book a free strategy session. You can also read more of my posts on the Me Next Year blog page.
Christina Gatteri, CFP
Certified Financial Planner
Warwick, Rhode Island 02886