When my credit card payments equaled my mortgageI had a blast in my 20s. I graduated from college, got a job, bought a house, bought a Jet Ski and bought a lot more junk. It was awesome — until it wasn’t anymore. Before my wife and I decided to have a baby, I was skating through my 20s using credit card after credit card. From the outside, we probably looked like we were doing well, but in reality, we were drowning in debt — well over $50,000 in credit card debt alone. Worse, I was never clear on how badly I was doing. I didn’t have a budget, and the minimum monthly payments weren’t bad — or so I thought.

Since those payments were spread out over so many cards, I managed to avoid looking at the big picture for a long time. I just logged into my different banks and made payments, moved on and spent more. In retrospect, it’s embarrassing, but you can’t change your past.

Then one day I threw all my minimum payments on a whiteboard — and I had to take a step back. The total overwhelmed me. I was paying nearly the same amount in minimum credit card payments each month as my mortgage payment.

I realized I needed to change, and move on from the “stupid spender” phase of my life. It was time to take control of my urges to buy shiny new products and start getting down to the business of busting debt. I set out on my journey toward credit card debt freedom as the market and economy crashed. While the economic turmoil didn’t help me, it did help cement my resolve. My first step was figuring how how to pay down the cards.

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8 Comments

  1. It seems like one of the things that many personal finance bloggers have in common is that at one point they made some horrible financial decisions. I think there is something remarkable about surviving all of that debt rather than just never getting into it in the first place.

  2. It’s terrifying how we can dig ourselves deeper and deeper into debt without realising the full extent of the damage we are causing ourselves. I think that because we’re not educated on how debt and interest works, and we’re not brought up to talk about our finances, we misuse our credit cards.

  3. My parents experienced this and it has made me so much wiser. I’m careful not to run up debt now. One simple mistake could trigger it!

    Jay

  4. I totally agree with your thoughts on debt repayment methods… “which you pick almost doesn’t matter. What matters is that you actually use one and stick with it.” So true! Self-motivation and the desire to just pay it down is what’s important.