Why I’m Scared to Death of Credit Cards

I recently did a podcast with His and Her Money that will be out soon and one of the questions that they asked was “When did you get into debt?”.  It made me think about how my debt story all started and the top three experiences that sum of up the reason why today I am scared to death of credit cards.  

Credit Card to Spring Break, Cancun You Very Much

Like many people currently riddled with debt, it all began when we first started college.  Very few graduate high school and find themselves drowning in debt, college is when the debt starts to pile up.  My first days of college began with a little money saved from working construction in the summer and a new student loan to pay for my college tuition.  My parents had moved away to another state and for the first time I was truly on my own, in a physical and a financial sense.  I was responsible for every cent of my college experience and any mistakes or learning experiences I went through was 100% Even Steven Money, maybe I was just Even Stevie Money back then, as Mr. 1500 Days likes to joke.

I don’t even remember the day I applied for a credit card.   When I was in college, credit cards were given away with frisbees and t-shirts.  Thank goodness the Credit Card Act of 2009, prevents this from happening at college campuses.  If you are looking to dive more into the specifics of the Credit Card Act check out section 301 for the nerds out there.  I remember getting my credit card in the mail with a $500 credit limit.  Of course I only saw this as $500 extra in my pocket, not surprisingly this card was maxed out within a few short months.  When the credit card bill came, I had the option to pay $25 per month towards my bill, I mean are you kidding me that sounded like a great deal.  My thought process was that I didn’t even have to pay all of the money back right away. I saw the credit card had a pretty high or at least now I know it was high rate, in the 21% range, but it didn’t matter those were just numbers on a piece of paper they sent me once a month.  All I had to do was pay $25 per month and I was golden.  Did I mention because I was doing so great with my credit card they even raised my limits, yeah $500 went to $1500 and I was on my way to even more credit card debt.

Can you see how easy it is to get in credit card debt, especially at a young and vulnerable age?  Here are a few things that led me down the path to credit card debt.

  • Applied for a credit card with little to no income
  • Very small outside financial support from my parents
  • Easy to obtain a credit card(s)

During my sophomore year of college a large group of us decided we were going to spring break.  It was all set up, we had 8 college guys ready to make memories and do everything we had seen on MTV, basically have a big party.  The big party cost somewhere in the $800 range, all I had to do was put it on my credit card.  Of course not before having a late charge for not paying the entire balance to the Spring Break travel provider, which made it an even $1,000.  That’s all it took when I was in college to put expenses like  travel, clothes, or going out to the bar on my college credit card, because remember it only took $25 per month to take the Spring Break trip of a lifetime.

As you can see I failed with my first credit card.  Here are just a few general areas I failed:

  • Financial education on how credit cards work
  • Did not pay off my credit card balance in full instead associated with a monthly minimum payment
  • Used it like money I had instead of money I owed

I wish that was the last story of why I am scared to death of credit cards.  Not surprisingly I graduated college with plenty of credit card debt and at this point I was even able to have more than one credit card, because what’s better than being in credit card debt with 1 card, but 2 cards!  The sarcasm is being painted on the walls in green because green is the color of money and all the green I needed to pay back to the credit card companies I owed.


My Brief Career Playing Poker with a Cash Advance  

Immediately after college I did not have a clear direction of where I was heading.  Life is certainly full of obstacles and mine fit the same road map.  During college, I played a good amount of poker both online and in the brick and mortar casinos.  Everyone wants to imagine they win at poker and while my thoughts back then were the same, today I realize if I had been a winning poker player I doubt I would have graduated with student loan and credit card debt.  Over time I did get better at poker, I switched to a more controlled limit poker rather than the no limit poker you will find on TV where you can go all-in with your money.  Limit poker is a game that involves less swings in money because of the betting structure.  It was during this time with little money and not much direction in life, I started to play poker full-time.  Yep, these are the decisions I made at 23, can’t imagine how I struggled with my finances.  

Surprisingly, I did pretty well playing poker full time, I was making money and paying off credit card debt.  I didn’t account for a few things that you run into every day at a casino.

  • If I won  or lost win money there are other games to play to win or lose money
  • ATM machines are readily available to take out more money (how convenient?!?)
  • If the Bank stops you from taking out money, the credit card company will give you money

I’m going to focus on that last bullet point because that’s exactly what happened.  Money was not important to me, getting that money back was.  If I went to the casino with $200 for poker and lost sometimes I didn’t stop there.  I would hit up the ATM machine until I won all of the money back.  Sometimes this happened and sometimes it didn’t, it’s scary to look back and realize I had no real filter on my money or gambling decisions.  The next step which I am almost horrified to admit was getting a cash advance from my credit card.  According to Nerd Wallet, a cash advance ranges from 2%-5% on the amount of the advance, plus the additional interest rate charge associated with your credit card.  I remember going to the cashier/customer service to have them run my card for more money, it’s ultimately admitting you lost big and will do anything, even pay extra money and a high-interest rate to win back the money you lost.  It’s probably a good time to say if you have a gambling problem please consult the National Council on Problem Gambling or call 1-800-522-4700.  Honestly, I don’t know if I had a gambling problem, but I very well might have.  I know for certain I had a credit card debt problem and playing poker 6 days a week for 8-10 hours a day was not helping.

I played poker full-time for a little over 3 months, I can say for a fact that my credit card balance went down during this time.  It’s not something I am proud of but it’s true.  My late night binges on poker actually made me a few dollars, but the wild swings of money and control are nothing to mess with.  I rarely if ever go to a casino today, I have other ways to make money in an entrepreneurial sense and it satisfies any gamble that lives within me.  

I can also say for a fact that a credit card advance is one of the most dangerous ways to use a credit card.  The upfront fees and higher interest rates is just another way credit card companies make money from the consumer.

Meet my Emergency Fund………My Credit Card

Sometimes funny things happen in life.  I was not far along out of college and working my first real job, I had even been promoted to a supervisor position.  What life changing moment was next… well it was a beautiful young lady who I had been dating long distance for almost a year.  Everything felt right so I had to find out if she was the one for me.   I saved up a month or two of my wages and headed to meet the future Mrs. Even Steven Money?  But wait not before I bought one of my worst financial mistakes, the Mercedes Benz or the Benzo de Lorenzo as I used to call it.  Nothing can go bad with this picture, even though I’m sure every one of you can see the train coming right at me.

I drove down to Florida, putting everything on my credit card.  I even made a few stops to see friends I had not seen in a few years, because why not I’m rolling in money!  I arrived in Florida without a care in the world and as I continued my job search in Florida I didn’t have any prospects.  (This was during the heart
of the US Financial Crisis with layoffs happening every day)I was running out of money quickly, so quickly in fact that I had to use my Emergency Fund or what most people call a credit card.

I struggled for a little over a year trying to make ends meet with side hustles, part-time jobs, online poker, and applying to every job I could.  That didn’t stop me from racking up hundreds and even thousands in credit card debt.  In my mind I had no choice, I put myself in a position to fail and that’s just what I did.  At around the year mark, I was faced with very few options.  I was at the point where I could literally drown in credit card debt and stop making payments or I could move back to the Chicago area where I had a guaranteed work from my days caddying for Michael Jordan.  I had to go where the work was and that was Chicago.  I would like to tell you that everything worked out in the end, so I will.  I married the future Mrs. Even Steven Money not long after this financial fiasco.   It cost me thousands of dollars in interest and credit card payments and to this day it makes me downright terrified of owning a credit card.


trainpic (3)

Sometimes you don’t see a train coming right at you.

Reading each story again I can see the train wreck coming right at me, but back then I had no idea how to stop it from hitting me head on.  I have learned so many lessons along the way from my credit card experiences, it’s very hard to think that I would do well with a credit card in my hand today.

I associate being in credit card debt and getting out to being an alcoholic who has not had a drink in years.  You wouldn’t tell an alcoholic to go in a bar because they have a drink special or that everyone at the bar is responsible and only having one or two drinks.  No, you would advise the person to stay away from the bar and stick with what got you to this point,  for me that’s staying away from credit cards.  I worked my way out of debt over the years using my debit card and cash, which is what works best for me.  Will I ever get a credit card again?  I don’t know that answer for sure, but I know that I will be scared to death the entire time.

24 Responses to “Why I’m Scared to Death of Credit Cards

  • After a history with credit cards like that I can see why you would not want to go anywhere near them. I was very similar to my approach with credit cards too, just focused on minimum payments, and not thinking of the interest rates or long term affect they were having on my financial picture. If used just like an other tool, paid in full each month, only used when you already have cash, you can take advantage of the reward the credit cards offer.

    • EvenStevenMoney
      2 years ago

      As you can probably imagine I take a pretty firm stance against credit cards, I understand they can be used for good, I’m certainly not there as they are pure evil.

  • Great story. I think its a similar story with todays youth and student loans. It’s quite easy just to pull out +$100k in student loans…just sign on the dotted line! Mrs. Budget did just that, signed on the dotted line and is now paying for it. Yikes!

    Luckily, Mrs. Budgets and I never had credit card issues.
    Mr. Budgets @MrandMrsBudgets recently posted…Life Isn’t All About The MoneyMy Profile

    • EvenStevenMoney
      2 years ago

      At least with a student loan you are getting an education, I feel like with a credit card I was getting clothes and trips to Cancun, probably both things I didn’t need. Cheers to no credit card issues!

  • I remember my first credit card and the t-shirt that came with it (t-shirt has long since disintegrated), credit is just too easy to get and use. When you’re young and don’t really have a clue, it’s easy to rack up debt and fall into that hole.
    Jim Wang recently posted…If You Aren’t Breaking Up, Screwing Up, and Leveling Up In Your 20s, You’re Doing Something WrongMy Profile

    • EvenStevenMoney
      2 years ago

      Yeah I’m 100% sure I don’t have any of the stuff the credit cards gave me. The hole is easily dug for credit cards and the shovel is usually very small to fill that hole back in.

  • I’ve always feared credit cards! Not sure why though. I got my very first one about a month ago because I couldn’t rent a car without. Just going to use it only if I know I have the cash to back it up.
    Vanessa recently posted…Over the Garden WallMy Profile

    • EvenStevenMoney
      2 years ago

      Love Afro Pig! It’s crazy how much a credit/debit card is needed in today’s world. It almost seems illogical to not be able to get a rental car because you don’t have a credit card. I know you can go with other companies, but just mind boggling to me.

  • I’m so glad that before I got a credit card my dad told me to treat it as if it’s a debit card – only spend what you have in the bank account. Best advice ever.
    Tawcan recently posted…The endless chaseMy Profile

    • EvenStevenMoney
      2 years ago

      That is great advice, I think I saw some of the same activity I previously did with what my parents did, not that it is an excuse. It certainly didn’t help.

  • Thanks for sharing your story. Credit cards are scary and no one actually warns you about these things. One of the reasons I never had a problem with credit cards is because my mom did. She got into major credit card debt. Her father paid the bills when she got married and told her never to be stupid again. My mom still knows very little about money, but she raised us knowing that you ALWAYS use a credit card like a debit card. If the money isn’t in the account, you can’t have it!

    • EvenStevenMoney
      2 years ago

      Just like Tawcan, some of the great advice sticks with you! Use that credit card like a debit card. Our parents have an influence on our decisions certainly early on, it’s great to catch some of the good advice.

  • I didn’t get my first credit card until a few months out of college. I started working at a bank (I still work at said bank), and decided I was an adult and got a credit card. $500 limit. No t-shirt. I feel ripped off. I didn’t use it much. I didn’t really start using credit cards until I got married, and then we racked it up. And pretty much paid the minimum balance. Looking back, it’s pretty lame how much we paid in interest fees.

    Luckily, this only went on for about two years before I came across the FIRE community and we paid off our cc debt within 4 months. Haven’t paid on interest since. And we use our CC almost exclusively for purchases (points!). We just pay in full each month, no sweat.

    I think CC can be daunting, almost like you have no control over them. But if you keep up on your spending habits, and make sure you can pay in full each month, I think they’re brilliant.

    • EvenStevenMoney
      2 years ago

      Don’t worry the t-shirt wasn’t that great, I promise!

      Yeah I’m still scared of the credit cards, but I read so many FIRE and travel hackers using them, it will be tough to deny in the future. I feel like I have my spending under control, but I’m in the mindset don’t fix what’s not broken…….write that down:)

  • Yikes! I’m not scared of credit cards, I’m using one right now to earn travel rewards, but I can see how you would be. At least you are at a point now where you realize your mistakes and are headed in the right direction.
    Cat@BudgetBlonde recently posted…I Hope My Kids Never Make These 3 Financial MistakesMy Profile

    • EvenStevenMoney
      2 years ago

      Yeah I think knowing what I did wrong is the best part of what I went through with credit cards. It allows me to not follow these same actions in the future, regardless of using a credit card or not, so many items I failed on with my finances.

  • You wrote this about MY college experience with credit cards, right?! How did you know???

    So apparently those companies roped a lot of us in the same way. Glad to know that those practices are now banned. It’s shocking how much credit card debt I had coming out of school, and continued to rack up in my early 20s. I feel kinda nauseous just thinking back on it all.

    It makes total sense that you’d be scared of credit cards now, and the good thing is there’s nothing that makes them critically necessary. I got to a point where I now trust myself with the cards, but that was only after refusing to use one for multiple years while I got my debt paid off and learned to think about spending differently. It was debit cards only for maybe five years, or possibly longer. You’ll know if you ever want to use them again, and if you never do, then that’s great too. All that matters is that you righted the ship and set yourself on the path to success, not what type of plastic you use (or whether you use plastic at all).

    Thanks for sharing your story!
    Our Next Life recently posted…Adjusting Our Goals // Rolling With the Market PunchesMy Profile

    • EvenStevenMoney
      2 years ago

      Haha. Yeah I hated that CC company for so long…..still due, jerks.

      It’s funny credit cards are used so often with different purchases and in some cases with hotels and cars, it can be in your best interest to use a credit card. It helps to have a lot of the bank, which is what I’m working towards!

  • Your road to credit card debt sounds a lot like mine….apply for credit card, max it out, pay the minimum payment. Then get another one…rinse/wash/repeat. BAM credit card debt. We don’t have much credit card debt these days, but I don’t especially like using them either – it’s a slippery slope from paying it all off each month to paying through the nose in interest.
    Brock @CleverDude recently posted…What Happens When I Don’t Sign My Credit Card Receipt?My Profile

    • EvenStevenMoney
      2 years ago

      Yeah Credit Cards are the slippery slope if handled poorly, which it sounds like we both did. Still Scared of them!

  • Credit card companies really do make it so easy to borrow a lot of money and just pay the minimum without really realizing how much it can cost you. I know before I met my husband he didn’t think twice about carrying a balance on a credit card. Since I waited until I was about 25 to get my first credit card, I’m very thankful to say I’ve never had credit card debt. We do use our cards for the points and extra protection and pay them off when we get the statement. That being said, I do have to admit that I spend more when using my credit card than when paying cash, so that’s not good!
    Jessica recently posted…Should I Get My Real Estate License?My Profile

    • EvenStevenMoney
      2 years ago

      It sounds like you guys make a good financial couple, which is great. I know everyone says that they do not spend more money with credit cards than with cash, based on statistical evidence they agree with exactly what you said, paying cash does limit spending. It’s an interesting financial behavior to look out for and try to curb when possible.

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