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Credit Card Debt is for Losers

Credit Card Debt is for Losers

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credit card debt is for losers

The other day, while researching an article about whether to pay off student loans or credit card debt first, Carrie asked our Facebook group what we thought.

Most people gave really great responses, and she included those responses in the article.

I gave my knee jerk response, which was that credit card debt is for losers, and student loan debt is normal and for everyone.

There was a bit of back and forth, especially since it looked like I was name calling, so here’s my controversial stance.

Credit Card Debt is for Losers

For years, I had a huge pile of credit card debt, and I felt like a loser because of it. My credit limit was $25,000 and I was so close to maxing it out that I had stress dreams about lacking money.

It was bad, you guys. I had no job and a $600 minimum payment on my credit card. Plus rent. You can see how I was starting to lose my hair. Even writing about it now, years later, I can feel the tightness in my chest.

I finally broke my silence and told my mom what was going on. Instantly, (bless her heart) she signed up for a credit card in her name: A Discover card with 0% interest for the first 24 months. All I’d have to do is pay the balance transfer fee (which I believe was somewhere near $750, which is small potatoes since I’d been paying more than 20% interest on the credit card each and every month) and of course make payments. She was lending me her sparkling credit, knowing that I wouldn’t get a deal like this with my own. I could already see the light. My only regret was not telling my parents sooner how close to the edge I’d gotten.

The Stigma of Credit Card Debt

If you read enough personal finance blogs, they will let you know that it is not cool to have credit card debt. I’d read so many different versions of the same thing: there is only one kind of person who allows themselves to get into credit card debt, and you don’t want to be that kind.

I didn’t even think I had anything to give to the personal finance world until the end of credit card debt was in sight. In retrospect, I wish I’d started earlier simply to read my thoughts from that era. Because even though I was one of the “losers” in credit card debt, I had valuable insights to contribute. But I couldn’t shake the stigma. I felt like it followed me around. Like my credit card debt was sitting on my shoulders, weighing me down. I am a loser, I would think.

So, when my mom came swooping in to help, I knew that math didn’t matter. Zero percent schmero percent. Who cared? That credit card debt was going to be paid in full well before sunset on the 24th month.

Paying Off Debt Helps Build Self Esteem

After some futzing with my spreadsheets, I had a plan. I couldn’t be stopped. Okay, so I went to a concert or three when I really should have put that $$ toward this monstrosity, but I wanted to keep my sanity (and my friends).

I took on extra jobs, some of which were highly unusual. I stopped using the credit card as a way to pay my bills. I might have missed out on some opportunities for rewards, but I saw it like a bucket of water. If I’m going to the effort to take a cup of water out of the bucket each month, I’m surely not going to add anything back, even a tablespoon. So, debit cards kept me goal-oriented during this marathon.

I couldn’t think about my car loan or my student loan. When you’re in deep water, you just have to start swimming. I paid off the last of the credit card less than 18 months after my mom opened it for me. I was so excited to tell her to close the account! Since I paid it off before my 0% interest expired, I am sure that mathematically I missed out. But psychologically, I was a winner, not a loser anymore.

I don’t think you’re a loser.

Even if you are in credit card debt, I’m certain that you’re a good person. Trust me. You’re probably an even better person than you let yourself think!

Is it stupid to pay a giant bank any amount of interest on your consumption? You bet your britches it is. Financing shoes is not a good plan. But your story is probably different from mine.

Maybe you’ve never carried a balance on your credit card, and you’re thinking about using one of those 0% offers to finance an addition in your house. Who am I to say you shouldn’t do that?

Or, let’s say you’re a young whippersnapper, and your student loan interest rate is ridiculous. Higher, even, than the interest on your credit card. Then, yes, for sure, you do what feels right to you!

But if you start to feel bad. If you are floundering and desperate and can conjure up tears with any amount of thinking of your financial situation, please, join me, and get rid of the one thing that is causing you the most pain.

Even if the math doesn’t make sense.

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61 Comments

  1. Johnny Moneyseed
    Mar 26, 2013 @ 05:02:46

    I remember credit card debt pretty well, and more so that feeling in your chest that you know you can't pay your bills. I've been debt free for a couple years now, and it is pretty amazing. It's crazy that I'm able to take advantage of credit card offers now and not worry about debt accumulating. Probably has something to do with growing up?

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 08:50:13

      A couple years? Holy cow. I can't wait to write that!

      Reply

  2. bluecollarworkman
    Mar 26, 2013 @ 05:09:57

    Generally I think people should stick away from credit cards, obviously. But your mom really helped you out of this mess with the very thing that got you in, credit cards. So I think if people can be smart about it and get help from someone else (someone holding them accountable), then credit cards really can help get you out of debt; and in fact sometimes the credit card debt is better to have than the student loan debt. Although I wouldn't fully know since I didn't go to college!

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 08:51:56

      Yeah, clearly credit cards are not the problem, or if they are, they can be the solution as well. It's not like the credit card itself grew legs and walked over to the money pit!

      Reply

  3. Pauline @ Reach Financial Independence
    Mar 26, 2013 @ 05:11:08

    Wow that is a heavy burden to carry. But whatever the amount and how big of a mountain it may seem, you can get rid of your debt and that's the good part. Yes it will take time and won't be fun every day but if you tackle it you'll get there. And you are living proof!

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 08:53:57

      Thanks, Pauline! Next thing you know, I'll be coming to you for investing advice, and end up with my own coconuts!

      Reply

  4. moneybeagle
    Mar 26, 2013 @ 05:20:02

    A lot of people I know have had or still have credit card debt, and at some point all of them have had some regret about having that debt. On the other hand, I've never met anyone with no credit card debt who regrets that decision.

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 08:54:42

      I agree with you — those without credit card debt don't seem to be missing out on much. Unless they don't use credit cards at all, then they have a lower credit score than they should!

      Reply

  5. MakingSenseofCents
    Mar 26, 2013 @ 05:38:23

    I've never had credit card debt, and I guess I've always been scared away from having any because of the money problems that my mother has had.

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 08:55:28

      Well, young whippersnapper, I didn't have any until I was just slightly older than you, so you're not out of the woods yet! However, I never earned nearly the amount you're earning, so I'm guessing our stories won't be the same.

      Reply

      • MakingSenseofCents
        Mar 27, 2013 @ 08:58:02

        Haha well I hope we never have any! I do believe that the fact that my mother was so BAD with money that it has taught me to be much more careful with mine.

        Reply

  6. Kurt@Money Counselor
    Mar 26, 2013 @ 06:37:39

    "Financing shoes is not a good plan." Perfectly put Kathleen!

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 08:55:48

      Thanks, Kurt! Maybe that should have been the title — not something so abrasive!

      Reply

  7. Kasey
    Mar 26, 2013 @ 06:48:14

    I once owed $38K in CC’s. It was awful but thankfully only took a few years to pay down plus I had locked in fairly low interest rates. I now have a CC sitting at almost $8K but it’s interest free for 12-18 mo and I have no issues with it as I will pay it off before then. I do think this will be the last time I allow myself to get a CC up that high again. I definitely don’t like the weight on my shoulders.

    digging-my-way-out

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 08:57:14

      Oof! I am so glad you won't do it again! It's freeing to get that weight off your shoulders, believe me! I felt better than I did when I lost ten pounds!

      Reply

  8. @SavvyFinLatina
    Mar 26, 2013 @ 06:56:02

    I have never had credit card debt because I have always been scared of it. Debt overall sucks. The only people making money are the banks, definitely not you.

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 08:57:50

      Agree wholeheartedly. Debt can be a useful tool, but not unless you're sophisticated enough to handle it!

      Reply

  9. John@Debt Advice
    Mar 26, 2013 @ 07:02:30

    "When you’re in deep water, you just have to start swimming". Never a more accurate phrase. I've had credit card debts and it's horrible. You do feel like a loser and worthless. I lost my job and had nowhere to turn. When I calculated up all the interest it the debt had been repaid but I still owed £30K.

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 08:59:09

      OOOF that is so much, even with your funny little dollar sign, but I'm guessing it's double $30K! I think we do ourselves a favor by never forgetting what that feels like.

      Reply

      • John@Debt Advice
        Mar 29, 2013 @ 03:55:04

        Haha You're right, it's about double $30K. Although we spell 'favor', favour ;-). We live and learn.

        Reply

  10. Jordann
    Mar 26, 2013 @ 07:08:02

    Bravo!
    I've never had credit card debt, besides maxing out my $500 limit credit card in university, but I definitely think that the people who've managed to pay theirs off have a unique level of bad-assery that I'll never achieve.

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 09:00:05

      It's not worth it, kid. You can sit on your money, even if it's earning a measly .5% interest and know, without a doubt, that you're better off than someone who's making payments on something that costs 23% interest.

      Reply

  11. FrugalRules
    Mar 26, 2013 @ 07:08:43

    Wow, that is awesome your Mom did that! That said, I remember all too well that feeling you describe so well. It was like a piano was sitting on my chest and it was all I could do to take short breaths. I felt so much like a loser because I was the one who created the debt by making silly choices to finance things that had no real value. It wasn't until I cam face to face with the problem and recognized what I was doing that I finally was able to come up with a plan to knock that sucker out. It was not easy, but I am so much better off now because of the experience.

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 09:01:12

      My mom is pretty awesome! YES, the piano on the chest, just sitting there. Not malicious, but heavy. You have to grow strong and just keep chipping away at it, but the feeling of no longer being a loser, and instead being a bona fide grown up? WORTH IT.

      Reply

  12. krantc ents
    Mar 26, 2013 @ 07:50:17

    Good luck, I am glad you are doing something about it. The credit card is not the problem! It was the out of control spending. I hope you are doing something about that.

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 09:02:14

      Actually, my story is a bit different. I wrote a check from a credit card to invest in someone's business. It wasn't shoes and takeout for me. Spending hasn't ever been my problem, but I do know now that I'll never invest money that doesn't belong to me!

      Reply

  13. Joe
    Mar 26, 2013 @ 08:12:23

    You came a long way since then. Luckily, we never had credit card debt. I guess we were always frugal and we had good income. Your mom is a saint. :)

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 09:03:36

      Yes, my mom rocks! I remember telling my friend who worked at Intel about the pickle I'd gotten myself into, but she couldn't understand. We were the same level of frugal, but her income far outpaced mine (especially when mine was zero!).

      Reply

  14. alwayshungry4
    Mar 26, 2013 @ 08:50:06

    That's awesome of your mom to do that, and more awesome of you to lay the debt down to rest within 18 months. I wish I found the PF community sooner since its effects have been motivating in getting rid of my debt, but better late than never and I have every intention of keeping it off. Great post!

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 09:04:24

      I'm glad you're here! I agree, this community really does help keep you on the straight and narrow. Especially when you have your own blog with readers that you don't want to disappoint.

      Reply

  15. Pamela
    Mar 26, 2013 @ 10:16:44

    The sermon I preach to students in my home buying class is that debt is not a necessity. People do manage to live debt free or to get out of debt.

    I'll definitely share this post with my students.

    As for what works–I hate debt. But I'm not a strong saver. So when I need to make a large repair on the house, a roof or furnace, I borrow the money and pay it back quickly. If I could save the money in a few short months the way I pay off the debt, I'd be better off. But I'm not wired that way.

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 09:05:31

      Thanks, Pamela! You know what? MOST people aren't wired to save. We're so comfortable with paying x amount here, y amount there, and whatever, that we just don't end up putting x and y into savings when we can!

      Reply

  16. Debt RoundUp
    Mar 26, 2013 @ 10:39:20

    Credit card debt is the devil! I felt inadequate when I was under such a mountain of cc debt. I felt better each and every month that I made a bigger payment to cut down that debt. I know what you mean about feeling like a loser.

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 09:06:10

      Inadequate is the PERFECT word. Like you're not really allowed to be in the grown up club because you were a credit card loser.

      Reply

  17. Newlyweds ona Budget
    Mar 26, 2013 @ 12:29:45

    I feel very similar to you. I think it's because we look at credit card debt as frivilous spending (consumer debt = bad) but whereas student debt is good because at least you achieved something out of it, and in most cases, it's unavoidable. I know for a fact that I wouldn't be where I am today if my college degree hadn't opened up doors for me. My parents couldn't afford to pay for school, so it was all up to me. How much money can an 18-year-old make?

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 09:06:41

      Or, even worse, how much money can a 22-year-old who didn't spend time in college make?

      Reply

  18. Canadianbudgetbinder
    Mar 26, 2013 @ 14:49:41

    I've never had credit card debt that I haven't paid off in full at the end of the month. In do know lots of people that do have credit card debt and it can be a struggle to pay off. The reason is the revolving door because of the dependency of the credit card as an income source when it's not. I believe anything is possible so anyone with debt with determination can get rid of it.

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 09:07:33

      I believe that, too! Although I also believe that the person digging their way out of debt absolutely MUST believe it's possible to get out, cross that line, and start building wealth.

      Reply

  19. Budget & the Beach
    Mar 26, 2013 @ 15:43:11

    ha ha I've so been a loser before, but that's OK, I wasn't happy with myself either. Glad you paid it off before the interest!

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 09:08:08

      Here's to not being losers anymore! It's amazing what being free of credit card debt does for my self image! That, and straightening my hair. :)

      Reply

  20. plantingourpennies
    Mar 26, 2013 @ 16:27:39

    It's kindof a long story, but when I graduated college I was kindof "gifted" about $5K in credit card debt. It freaked me out so much that I paid it off instantly – so I definitely understand where you're coming from.

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 09:08:48

      Wow — I'd love to read that story! If you want to swap guest posts, please let me know!

      Reply

  21. Carrie
    Mar 27, 2013 @ 06:35:40

    Oh yes, I couldn't agree with you more Kathleen! I've been there too, with credit card debt hanging over me and all the other experts saying "just pay it off every month and earn the rewards". That's a bunch of BS! At least when you're trying to get out of debt. Like you mentioned, there's no point taking two steps forward and one step back, while you're trying to make progress. When and if you're finally out of credit card and can manage it properly, that's totally up to you, but until then I say stick to debit cards!

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 09:09:25

      Agree wholeheartedly, Carrie! Thanks for the question that sparked this post!

      Reply

  22. Happy_Homeowner
    Mar 27, 2013 @ 06:56:07

    Excellent post–love the bit about how terrible it is to finance shoes; that's certainly a way to kick some people in the butt! I was a CC loser for far too long, and I'm so happy those days are behind me!

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 09:09:51

      RIGHT? And knowing that you'll never go back is at least as satisfying as being out of it in the first place.

      Reply

  23. Matthew Allen
    Mar 27, 2013 @ 10:40:06

    The only controversial thing I saw in this post was the title! Everything else was just awesomeness. I especially liked your analogy for taking teaspoons out of a bucket. I might have to use that one on my site, if that’s okay?

    I’m actually one of those weirdos who doesn’t really care that I have a little bit of credit card debt. I’ve paid it off before and I’ll pay it off again. The only difference being that I have a plan this time.

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 10:58:36

      Sure — the general rule is that you can use anything you find on someone\’s blog, as long as you link to your source. It helps everyone!

      Reply

      • Matthew Allen
        Mar 27, 2013 @ 11:14:17

        Haha.. Thanks! I know the general rule. I do it all the time! To date I’ve only had one blogger ask me to remove curated content from their site, even though I linked to them!

        I’m always on the lookout for good credit card stories to highlight. I’ve already saved this one in Evernote for future use. I’ll let you know.

        Reply

  24. AverageJoe
    Mar 27, 2013 @ 12:12:52

    Do I like this post? You bet your britches I do!

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 12:32:30

      Let me know when that phrase accidentally enters your lexicon.

      Reply

  25. FinancialBlackSheep
    Mar 27, 2013 @ 12:28:59

    I completely wiped out all of my debt, because any thought of it made me want to cry. It was like I was chained to someone else and they got to call my life shots. Now, I get to say what I will and won't do even if some credit was good and some was bad. Nothing, not even credit card promises of rewards can ever take away this feeling of being completely and utterly free from all debt. I might just start traveling once a month, because I can. :D

    You aren't a loser, your credit card debt was the loser and it was bringing you down. :)

    Reply

    • Frugal Portland
      Mar 27, 2013 @ 12:41:44

      I love that — I might travel just because I can! I might pick up and move, just because I can!

      Reply

  26. iheartbudgets
    Mar 27, 2013 @ 12:44:47

    I was in CC debt once. It sucked. I had a 0% card, but still, it was pretty lame that I didn't have the money to pay it off. Before that, I had only let me balance revolve once and paid CC interest, and NEVER AGAIN. Screw CC interest! Thanks for telling it like it is. CC debt is usually a symptom of a deeper issue, but like you said, it's doesn't mean you ARE a loser, just that CC debt IS for losers :)

    Reply

  27. Holly@ClubThrifty
    Mar 28, 2013 @ 03:10:25

    A lot of us have been there! I despise credit card debt and I was actually a loser when I was in it. Not anymore!

    Reply

  28. @TheHeavyPurse
    Mar 28, 2013 @ 09:45:25

    What a fabulous mother you have – although I suspect you already knew that. I've been blessed to not experience what you went through, but every day I talk to people who carry that same weight on their shoulders and it shows in how they physically carry and refer to themselves. I'm glad your mother was there to support you. It makes a huge difference to not only have someone in your corner but also know you're actively eliminating debt.

    Reply

  29. Untemplater
    Apr 07, 2013 @ 21:20:12

    We've all made bad decisions with money at one point or another, or perhaps many. What's important is realizing when we have a problem that we need to fix and giving it our all to turn things around. Sounds like you have a sweet mom. I'm glad she was able to help you!

    Reply

  30. Tushar
    Apr 08, 2013 @ 05:18:08

    Credit card debt can definitely be scary, and it's an experience that I hope most people don't have to go through. It certainly does teach a valuable lesson along the way, though. You're not a loser for having it, you're a better person for it after it's all over.

    Reply

  31. KC @ genxfinance
    Apr 08, 2013 @ 06:17:04

    It's really a pain knowing that you owe that much, not to mention scary. I can imagine those sleepless nights. But way to go for your mom. They are our life-savers. When you have no debt, the peace of mind it gives is just so liberating.

    Reply

  32. [BLOCKED BY STBV] How to Save Half Your Income
    Jan 23, 2014 @ 07:03:14

    […] “old enough to know better” to have taken on in the first place. For me, it was my big dumb giant credit card debt, so even when that got transferred to a 0% for 24 month card, it was still my highest priority, […]

    Reply

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