Credit card horror story hour with Jessica from AFFIL

So, here at AFFIL, one of the things we work diligently on is raising awareness of the evils of the debt trap - how late fees and high interest rates can lock you into a cycle of debt that can overwhelm you. This is a particularly sore subject for me because I, myself, got sucked into the debt vortex at a very young age. Here's a little tale of how that shiny piece of plastic can be the bane of your existence for years to come:

I was 16 and on my way to my future - not to mention a total know-it-all that thought I had the world on a string. I was due to start classes at the local community college in a month and was stressing out over the fact that I hadn't received my Pell Grant funds yet. I knew if I didn't pay the $200 tuition deposit by the deadline they would auto drop my classes and I would end up waiting in that miserable open registration line at 6am the day before classes started - a nightmare of chain-smoking, gum-smacking, 18-yr. olds, just itchin' for a good reason to go back to juvi (I'm from a small southern town rife with kids that simply do not have enough to do).

That afternoon I received a magical envelope in the mail - You are pre-approved! Moi? Pre-approved? A magical word to a 16 year old that no one seems to approve of. All I had to do was sign my name on the dotted line and mail it back in the postage-paid envelope and I would have me a shiny new piece o'plastic with a $500 limit! You better believe I sent that bugger back just as soon as I could get it in the envelope. A week later I had my golden ticket.

I think this is where I should mention that, at the time, I was a hostess in a local brewery and made $5.50/hr. working 20-30 hours per week. I lived with two friends, paying $300/month for rent and about $100/month for utilities. I didn't have a car, but did spend around $20/week on the bus. Surely, I didn't have enough disposal income to merit being pre-approved for a credit card...oh, but apparently I did.

What was the first thing I did with my new plastic card, fabulously decorated with a hip art deco design? I paid my tuition deposit. And when the first week of classes came around and my Pell Grant was still no where to be found, what did I do with my little plastic friend? I bought $250 worth of books. Then I went out for sushi.

When my Pell Grant showed up, I still hadn't gotten my first credit card bill, so of course, it was the farthest thing from my mind - I paid the rest of my tuition, my rent, and bought some crap for my apartment. When my very first credit card bill came around I was buried in books, had cut back my hours at the restaurant, could barely pay my rent and was eating Ramen noodle on a daily basis. My payment was late. The $39 late fee pushed my balance over the limit. I was charged a $39 over limit fee...and it was all down hill from there.

In the first year or so after getting the card I would pay the minimum payment every month. Every month I would be charged another $39 over limit fee. Sometimes I would have a slow week at work or have a particularly high electric bill (summer in NC is cause for lots of AC), causing me to be late and adding another fee.

By the time I was 18 my credit card bill for that shiny $500 limit was over $1,000. As time went on and life got more expensive, I did the stupidest thing I could have ever done - I just completely stopped paying on my credit card. I felt like I was just throwing good money after bad, and I was sick of it, so I simply stopped.

In the meantime I had gotten two other cards - one with a $500 limit and another with a $1500 limit. Both had similar fates - tuition, books, replacing the head gasket in my boyfriend's car after breaking down and getting stranded in the mountains of TN. Oh, and my personal favorite, B of A using my credit card as overdraft protection, which meant cash advances with 29% APR automatically charged to my credit card if my bank account so much as slipped $.50 cents into the negative. All of them I tried my hardest to pay on time, but simply gave up when it came down to rent or credit card bills.

Fast forward to now. I am 24. I am a savvier consumer, a bit of a politician, somewhat more fiscally stable and responsible, and work in a place that has taught me tons about consumer credit and the cyclone of debt banks want you to fall in. I don't have an open line of credit. If fact, I probably won't be able to get one for years (though I still get "pre-approved" offers in the mail). I paid off one of my $500 limit cards last year to the tune of $2,342. The other two are in collection. I make regular monthly payments on the other $500 limit card. The balance is currently around $900, and I estimate I have paid well over $2,000 to them over the years. The third card is the $1500 limit card with B of A - the balance is currently $2,867. The collection agency refused to negotiate a settlement with me, so now, again out of stubbornness and a little bit of apathy, I have cut off communication with them, though I receive a letter threatening a lawsuit from them every month or so. They have yet to file suit.

Heed my warning young college students: it is not free money, and you will not have anymore money when the bill comes than you have in your pocket right now. Credit card companies are not your friends. Just say no.