I previously used credit responsibly. The period in which I did not use debt responsibly is something I am still digging out of, and I am now trying to share my mistakes and my corrections so that others may learn from them without making them.
For many years, I was a responsible user of credit. Always paid off in full. No balances. I did not care about my APR, because it did not matter.
And, then, things changed. The major change occurred after I completed my professional certificates. My computer that was my source of job ads was about to die and I did not have enough saved to buy a computer outright. I had previously been a responsible consumer of credit and felt comfortable taking out a 0% APR credit card for the purchase.
Around the time that it absolutely needed to have a zero balance to prevent an interest charge for the entire balance that had ever been on there, my gig income temporarily dried up.
It sucked. I felt ashamed. But I did not stop using the card. The company kept upping my limit. I kept getting close to the limit. I kept feeling shame.
During this time, I opened my LLC, and it took nearly a year before it received money from a client and not from my personal bank account. I used my credit cards to keep me afloat while paying my personal bills and my business expenses. Parts of my credit card debt, subsequently, were sensibly acquired. That business is an investment in the life I want.
Fast-forward to the present.
This year had the potential for significant travel. My credit card debt existed, but my credit score was in the great range according to my FICO score. I applied for and received a rewards card with an 0% introductory APR. I put away both of my other credit cards, and focused on only using this while trying to pay the other cards down. I “earned” the 40000 bonus miles within the Rewards Card’s timeline. I purchased two round-trip tickets with the miles so far.
I still had the debt and the APR on my highest balance was high, and it frustrated me. I applied for a loan from Earnest to cover most of the balance at an interest rate that was half of the APR. I then threw two full paychecks and some of my savings at this credit card debt.
Now I have two years to pay off the Earnest loan and one remaining credit card balance. If you use my link when you apply, your rates are not impacted, but my balance will be impacted.
To sum up – I made mistakes, I took out a loan to pay off some of those mistakes, and I am now throwing lots of money at my mistakes to take control of my life.
Small steps count.
Have you been able to change your use of credit cards for the better?