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Money Mistake Monday - The I Applied For Too Many Credit Cards Syndrome.

Posted by david | December 10, 2007

Photo by k9ine.

There was a time when I think I had every credit card under the sun - reward cards, store branded cards, miles cards…you name it, I probably had it. And the scariest part of that was that I was a college student barely making $4.00 an hour - part time! But yet the credit card companies didn’t care, they approved me for any and all cards that I applied for on and off campus, and by the time I graduated I had a wallet full of maxed out credit cards. Good thing I was starting a real job right out college so I could pay off all that debt.

Yea, right.

If only $16,000 per year was enough to pay off $38,000+ in credit card debt in record time. Of course, in reality, there was no way I was going to pay those cards off that quickly and I was destined to carry that load around for a long time, while interest piled itself on the cards. And while I did try to juggle all those cards and all those minimum monthly payments, it was not the only problem I was causing for myself. I was also killing my credit score!

My credit score as of a few months ago was at 790, but back then it was at around 600 or a little lower, which is not a very good score. Granted, I had not missed any payments or anything, but owing that much money on that many cards was definitely not a good thing and it showed on my report. Luckily, I suppose, I was not going to buy a house or a car anytime soon (not on $16,000 a year at least) so I did not think it was that big of a factor - but what if I had needed to borrow money for some reason? There is no way that any bank would have given me money…I owed more than twice my annual pretax salary to credit cards! And what did I have to show for it?

Nothing, really. Credit cards bought me food, beer, gasoline, stereo equipment, CD’s, movie tickets, date nights - all things I should have been watching my spending on, but hey, they were practically free with credit! But once I got out of college and had to really start paying them back if I ever wanted a place of my own, the damage was already done and it was very painful.

People talk about the one piece of advice they would give to a high school or college student, and mine would be this - stay the hell out of credit card debt. I know it seems like you will be able to pay if off when you get a real job, but the real world costs a lot more money than just rent and you won’t be making as much money as you think you will be making. Credit card debt sucks, believe me, and it took me years and years to pay it all off. I still get nervous when I see a balance on my cards for the month because of our regular spending - it’s not a good feeling. So stay away from credit card debt, trust me!