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We all have regrets — money regrets, that is. But, like all mistakes, we wouldn't be who — or where — we are today without them. In our "Money Fails" series, real people share how they bounced back from cringeworthy financial slip-ups, what they learned along the way and why they're the better for it.
"Just put it on a credit card and pay it off when you get back!”
That's what my then-boyfriend's dad advised me as I set out on my first international trip.
Phil had spent his 20s backpacking around the world, returning to New York only for short stints to make some cash and do it all over again. He settled down eventually, but only after wanderlust had run its course. I wanted to be just like him (minus his uncanny resemblance to Richard Dreyfuss, circa “Jaws”).
I’d only used my credit card to fill my ‘98 Buick LeSabre up with gas. I come from cautious stock — my dad still spends his Saturdays scouring Price Chopper for the best deals on deli meat — so I didn’t plan on following Phil’s advice.
I also didn’t plan on falling in love with New Zealand. The people were friendly, the waves broke left and there was an endless supply of free beer. To top it off, my boyfriend dumped me, so I had no reason to go home. But, New Zealand was expensive.
(The author, center, as a surf instructor in New Zealand.)
I remembered Phil’s advice. Wasn’t this the once-in-a-lifetime experience he warned me about? Shouldn’t I live it up?
I began putting all expenses on my “emergency” card (a quarter-life crisis is an emergency, no?) that had 0% APR for six months. "I’ll be home by then," I thought. "Everything will work out."
Wrong. Back in New York, I had no place to stay. I got an apartment with friends, but because we had short credit histories, the landlord demanded two months’ security deposit. I had to borrow money from my dad, and purchase a few big-ticket items, like a bed and a dresser, with the credit card.
Then, the 0% APR ran out. My minimum payments ballooned from $25 to $150. The interest alone was over $75 each month.
Credit card debt was a vicious cycle. I could only pay the interest each month, so I never made a dent on the balance. All my cash was going to payments, so I was never able to save. When an unplanned expense cropped up (did I mention I drove a ‘98 Buick LeSabre?) I couldn’t cover it, and had to use the credit card again. Before long, I was in more than $10,000 of debt. I had to make changes, fast.
I transferred my credit card balance onto a new card with 0% APR for 18 months. I had to pay a fee, but it was preferable to interest payments. I got a full-time job writing copy for an advertising agency and a side gig bartending. My days began at 9 a.m. at the office and ended at 3 a.m. mopping up tequila.
Slowly, the hard work paid off. I made enough money bartending to pay my living expenses in cash, and dedicated my entire paycheck to my debt. I even met my fiancé while bartending one night!
I finally paid my debt off with my bonus this year. It took five years.
If I had to relive my 20s (please don’t make me), I’d follow these rules:
1. DON’T make purchases on credit you don’t have the cash for. If you don’t pay it off within that billing cycle, it’ll cost you more with interest.
2. If you can’t break your credit card habits, cut them up and spend only cash. Paying for things with physical bills forces you to limit spending and makes each purchase more real.
3. If you can’t pay off your credit card balance in full, don’t beat yourself up. We’ve all gotten carried away on $15 cocktails and been surprised by the bill (no? Just me?). DO adjust your budget accordingly and pay the whole balance in the next billing cycle.