I Started to Get Into Debt at 19. – Jon


“Dear Steve,

Hello, My story is a bit different, and longer than most. feel free to edit as you like. Coming out of high school, I had a job with great perks, and really good pay about a year and a half ago. The problem was, that with all these perks and money at the age of 19, I became confident, and (later on) reliant on my credit cards, and overdraft bank account, and deep into debt very quickly.

I was getting daily bills of 5$ after going into my overdraft, and I had to take out a loan to buy (a lemon of) a car, and quickly racked up 3 credit cards with little money to spare. After getting laid off, and deciding to go back to school, I was living on only 1/3 of the salary I once received every month, and struggling.

At the end of this school year, I was fortunate enough to run into some money, and pay off all credit cards. As it stands, I will be canceling the cards on Monday, and will be paying off the car loan (much earlier than anticipated) by the end of the summer.

In my current situation, do you have any suggestions when I get completely out of debt? What impact will my credit score have taken after this time? I have not received any phone calls from my credit cards for late payments, and have never been later than 2 months (overdue, i know) for the minimum payments.

I also plan on removing the overdraft off my account, and the fees associated. I also am not going to carry a debit card, rather just an ATM card to receive a limited amount of funds per day. Do you have any other suggestions to help me limit my funds?

Thanks, your website has proved very helpful. Jon


Dear Jon,

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

Hopefully I’ve answered this in time for you. I would not rush to close your oldest credit card. I’d keep it open to help improve your credit report as you move forward with your life. The longer a card has been open, the more credit score love it gives you.

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You can use it to make purchases and then when you get home, send the payment immediately to the card company. That way when the bill arrives, it’s all paid for. If you have online banking, this is easy to do.

Shunning credit is not the best answer if you want to build the best credit history you can. And a good credit score is beneficial in life. Your credit history and credit score can only be improved if you use credit. Otherwise, there is nothing to score you on.

It is interesting that new proposed legislation would not permit anyone younger than 21 from getting a credit card. It’s a bit shortsighted but in your case it may have prevented some of the debt pain you faced.

The underlying issue here is that you need to autopsy your problems. You’ve already started to do that but I think you need to be honest with yourself about what drives your spending. Is it spending to impress? It seems like you don’t trust yourself with credit if you are going to live on a cash basis.

And by the way, I’d rather see you use a credit card than a debit card. A credit card is a safer financial tool to use if you can get a grip on your spending.

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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