Credit Card Advice - You Can Learn a Lot From a Rich Girl

November 7, 2023

Credit Cards

Driving home from the bar one evening, my friend Marilyn confided in me that she was afraid. In six months, she would be graduating from grad school and her parents were going to cut her off financially for the first time in 26 years.

Marilyn works twice a week (8 hours total) waiting tables to pay for pot and shoes, but everything else from her rent to her groceries has been paid for by her parents. Marilyn, at 26, doesn’t know how to balance a checkbook and has no idea what a gallon of milk costs. On top of that, she managed to secretly charge up some credit cards to the tune of $12,000 and that debt alone was overwhelming her. She couldn’t imagine what it would be like when she had to pay all of her own bills, plus the credit card debt. She fucked up big time and rather than admit that to her parents (who amassed their wealth through careful, responsible investments) she was desperately confiding in her older friend hoping for a magic solution to her problems.

I suppose she came to me because I’ve been there. If any of you consider me obnoxious and self important now, you should have known me when I was in high school. At that time, I hadn’t ever had to struggle for anything in my life. Everything from material things to academic achievements were mine without the slightest bit of work or effort on my part. So when I sat in my high school physics class and the theories being taught did not instantly become clear to me, I turned up my little nose, crossed my arms, and refused to learn the material at all because it was obviously beneath me. Physics was beneath me. This was my response to a challenge that required more than a few seconds to accomplish.

This was also my mentality when I began college. Unlike Marilyn, my parents cut me off financially the day I graduated high school, but that didn’t matter because I was able to maintain my style of living through credit cards. I applied for 11 of them and used them to purchase things like lattes, kegs of beer, and plastic Jerry Garcia bear beads to decorate my apartment. I thought credit cards were free money and in six months, I had maxed out every one. I would have gotten more, too, if my credit at that point wasn’t in the shitter. But it didn’t matter because I really had everything I needed at that point.

It was just….the bills…..eleven of them on top of all of my regular bills. I was having a hard time keeping track of them. I’d lose them, forget about them, and then I’d come home at night and find out that my electricity was turned off. Again. But instead of sitting down and working out my financial situation, I deemed all the credit card bills too hard and inconvenient to manage, so I decided to quit paying them. In true spoiled brat fashion, I refused to so much as open the bills for a solid four months.

You all know what comes next, don’t you? Oh yes, the phone calls. Vicious phone calls from angry creditors at all hours of the night who refused to be ignored. I had never connected a human face to my debt, so I was stunned when this happened. And when I opened one of my bills for the first time and saw that the balance had almost doubled? Well, you could have bowled me over with a feather.

So I sat down with all of my bills and a calculator and struggled to figure out the damage. I didn’t understand simple concepts like interest, over-limit fees, late fees, or annual membership fees, so it took me a while. The end result was that if I put forth every spare cent of my spending money towards paying this debt, I would be free of it in 24 years. The rarified microbiologist is in a bit of consumer debt right now and he describes it as one of the most soul crushing feelings in the world. Sitting there with my bills and the knowledge that I had sold a quarter of my life into slavery for some plastic beads, I couldn’t think of a more apt way to describe it.

In the end, I went to some pretty extreme measures and paid off my debt in 3 months. I cut up all my credit cards and foolishly thought it would improve my credit situation. Little did I know that paying the bill doesn’t turn a bad debt good again. The only thing that would fix my credit was for me to learn to establish new credit responsibly. It took me over four years to quit making rookie mistakes. To date, it was the most difficult thing I have ever forced myself to accomplish.

Marilyn is not quite like me. She has a lot of pride, but not enough to force herself out of her comfort zone. Knowing this, I advised her, “Better to ask your parents for help now when it’s only $12,000 and not really a big deal than to have to ask them for help later when it’s gotten completely out of control.”

If this was just a cautionary tale for young rich snobs, then I wouldn’t bother telling it. The problem is that the middle class are making these same credit mistakes without the safety net of wealthy parents to fall back on. We are sending our children out into the world without any idea of how to manage credit, balance a checkbook, or devise and follow a feasible budget. We are doing this not out of maliciousness or desire to see the future fail, but because we don’t know how to accomplish those things. Because of this, we are cheating ourselves and our children out of retirement.

I’ve spoken to a lot of college kids lately who regularly spend $200 for a pair of blue jeans. When I ask them how long it takes for them to earn that kind of cash, the answer usually falls in the realm of a week or so. At this point, I will stress that not even the very wealthy spend an entire weeks worth of salary on one article of clothing. College kids disagree because they’ve seen wealthy people wearing more expensive clothing than their jeans. So I explain that while they may wear more expensive clothing, that it doesn’t constitute a week of their salary. Normally, they earn the price of expensive jeans in an hour, often less. On the off chance that the kid understands the picture that I’m trying to paint for him, he expresses shock that I would suggest he should never spend more than $8 (his hourly wage) on a single article of clothing….or alternatively buy significantly less clothing. But most of the time, the idea that they might be living well above their means only confuses them and they just stare at me blankly.

My Mother in Law, who is respectably middle class, will die in debt and the worst part is she rarely buys anything for herself. Every Christmas we go over to her house bundled up in sweaters and jackets, swathed in a layer of blankets because she can’t afford to turn the heat up. But everyone will be plowed with the presents that she couldn’t control the impulse to buy. It pains me to see and I just want to say to her to please take back the bracelet and the sweater and the gift certificate and the 20 presents you bought the children that will most likely be donated to charity without them ever playing with them because they have so much already and please, turn your heat up. Seeing her live her adult life with some semblance of physical comfort is more valuable to me than any present she could give.

I guess what I’m trying to find out is why the fuck are we doing this to ourselves?

Is anything that you own worth living paycheck to paycheck for? Is the extra square footage and the swimming pool and the new car worth it knowing that something as little as a traffic ticket can screw you up for the month? Is a playroom full of toys for the kids necessary when all you’re doing is teaching them that mindless consumer excess is not only normal, but the key to happiness?

You know what makes me happy? Not being a slave to the things I want to buy. But hey, that’s just me. I also plan to retire early and I feel that I’ll be pretty alone in that endeavor unless I can convince a few now to come with me later. There are legions of people who are going to come face to face with the hard, cold reality that their debt doomed them to a life of dependency on a job at Walmart passing out smiley face stickers and shopping carts. They will find out, too late, that the things that they had to own cheated them out of retirement.

I hope the plastic beads are worth it.

Check out Violent-Acres Blog for more like this…

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