Are You in Credit Card Debt?

I know this is a sensitive issue, so I want to say up front that both my sympathy and curiosity for those in credit card debt is sincere. This may be an uncomfortable subject to discuss.

I’ve had both the luck and privilege to avoid credit card debt ever since I got my first credit card in my early 20s. Prior to that I only had a debit card, but I learned that I needed to build my credit score by showing that I could use “plastic” money and then pay off that amount when it was due.

That’s precisely what I mean when I refer to credit card debt: Are you unable to pay your full balance each month, thus resulting in your interest rate jumping from 0% to an 15-20%?

A few years ago I learned that this happened to a friend, and it was a scary situation. Once you enter a situation with such a high interest rate, it’s a very difficult cycle to escape.

To me, it seems predatory that credit card companies increase the interest rate so much. What kind of a person makes a business out of bleeding your clients dry? I understand that they incur risks when loaning money to people, but 15-20% just seems too high.

If you’re in this situation, I completely empathize with you. You may be doing everything you can to get out of credit card debt, but 15-20% interest is a big hill to climb. If you’re open to sharing your story publicly or privately (, I’m here to listen.

I meant to have a poll here, but the poll app isn’t working.

16 thoughts on “Are You in Credit Card Debt?”

  1. Thanks for highlighting this topic of capitalist exploitation. I have been fortunate to always been able to pay off the full balance for fear of a 24% rate.

    If you have the time, and haven’t seen it, Last Week Tonight has done several stories on exploitative debt industry. Here is one that highlights how people who are financially stressed can be ruined by annual interest rates of over 800%.

  2. I joined the army right after high school. I got my first credit card right after my 20th birthday ($7500 limit) and hit the limit before the end of that year. In my head I rationalized that I could indefinitely pay the minimum due each month (around $350 if I remember correctly) with ease and decided to have a fun year. Once it was maxed out, I was immediately in trouble. I struggled to make the payments each month. At the time, my bank offered a paycheck loan where you could borrow up to $500 a month if you had a direct deposit set up and they would remove the amount due + 10% from your next deposit. I became reliant on that $500 every month and i was now bleeding an additional $50 each paycheck because of it. Eventually it came to a head. I was out of money and I couldnt afford to pay the credit card bill and I finally broke down and asked my father for help. It was some tough love but he rescued me from financial ruin. Once I got out of the military and started making a bit more money I felt comfortable getting another credit card and have never carried a balance from month to month since.

    • Bro, I had so many soldiers in your position. Predatory lending to enlisted members is insane, and nothing is being done.

      I think we can both agree that no system that respects its customers would give a 20 year old with zero credit history (what, a max of 2 or three years?) a line of credit for $7500. Unless their intent was to get you into precisely the scenario in which you found yourself.

      A $350 a month payment just to stay even is insane. Even worse, they could charge any interest rate they wanted, since they could notify your chain of command of your debt, and then have the Army garnish your wages.

      Still galls me that the military chooses to honor debts from bad actors rather than throwing up the Cpt America shield and challenging predatory lenders to ‘f around and find out’.

      • For sure! I definitely fell pray to a high interest car loan from a used dealership just outside of post while I was in AIT. A tale as old as time. Predatory lending + financially uneducated soldiers, especially during training = a bad time. I learned the hard way.

        • Thank you both for sharing (and for your service). I agree that it is a huge disservice that the armed forces doesn’t have a system for preventing you from getting into credit card debt like that.

        • You are not kidding. You’re like the walking embodiment of the cautionary tale.

          Those car dealerships…and pawn shops, and payday loan stores…are cockroaches around every US base. Once you see one, you know there are ten more nearby that you missed. Just feeding on young servicemembers because the military will always make sure they get paid. I would consider it brilliant if it weren’t so disgusting.

          I had a kid buy a brand new Dodge Charger within 30 days of returning from deployment. (We call it re-deployment in the Army, despite that obviously meaning deploying AGAIN…because you can’t tell the Army how to use their words! *sigh*)

          Idiot drove drunk, plowed it into the BRICK ENTRANCE SIGN to the base and totaled his car within a week of purchase.

          So while he’s in the hospital, command gets a notification that he had defaulted on his loan (missed a single payment because he was in traction in the hospital) and they were officially requesting that his wages be garnished. Which is when we found out that private first dumbass had signed on to a FORTY PERCENT LOAN.

          Because he had no credit history and his parents (wisely?) wouldn’t co-sign a loan. But at 40%, you basically pay 2.5 times the total cost of the item. He saw how much extra he made while deployed, and thought he was going to pay off the principal early and reduce the interest.

          Instead he got several article 15s, was charged by civilian police on several counts and came within an inch of a Court Martial. (I think the hospitalization softened the JAG a little.)

          The only guidance we were ever told to pass to our soldiers after that was to require that they clear it with their chain if they were to make any major purchases within 60 days or re-deployment.

          Not nearly sufficient.

  3. I have an unsurprisingly long response to this post, but I hope it may assist others.

    I am in my 40s, and have never had an actual credit card. I made the mistake when I was 18 (and living on my own, so no parents to smack some sense into me) of getting a cell phone. Ostensibly for the convenience, but mostly because it was awesome. But this was the mid-90s, so cell phones were still 4lb bricks with an 8 inch antenna…making ‘awesome’ a subjective analysis.

    I worked as a busboy/dishwasher/server in two restaurants and naturally failed to consistently make my payments. The third time my payment was late, they shut down the service and sent me to collections. After that, I was unable to secure a credit card with anything less than a 29.99% interest rate.

    For over 20 years.

    I also moved around frequently (for work, then the military, then work) and wound up getting charged for three different internet and cellphone service devices that I had turned in to the company when I moved. But as you can imagine, it took a while to receive notice, so these unwarranted debts (I still had the ‘equipment received’ statements) were handed off to collectors before I was aware of them. Finally, my ex-wife left me with about $1k of debt on a secured credit card she had opened in my name.

    And THEN the fun began.

    Even though I proved I had returned two of the devices and had those debts eliminated, and even though I contested the credit card charges…it didn’t matter. In the credit card case, the bank no longer had the debt, so they really didn’t care. The creditor was more than happy to offer me a ‘reduced payment’ solution, allowing me to pay off the 1k for less than $300.

    But once a year, all of these debts would pop back up on my credit report. Over and over, for more than a decade.

    Because the dirty little secret is that your ‘debt’ is just a line in an Excel spreadsheet with an amount and a social security number. So if the person you speak to at the bank/creditor/collector doesn’t get rid of your name everywhere, then when they sell that spreadsheet to the next shady collector, your debt and soc sec get submitted along with everyone else.

    The greatest thing I ever did was get a credit monitoring service through USAA, which provided me a report from each of the three bureaus once a month that listed all of my credit activity. It was a world-altering experience to see all of the things that affected my score, the businesses claiming I owed money…etc. The service was since migrated off of USAA and is now offered (still for $13 a month even 10 years later!) through Experian. I highly recommend it to anyone struggling with their credit as a means to monitor and improve your credit.

    Which brings me to the final anecdote.

    About six years ago the credit card my ex-wife used was finally rolled off of my debts, which gave me a credit score of 633. Just good enough to buy the first new car of my entire life. I secured the loan through USAA (I’m a vet, and they really take care of us) and was provided a cashier’s check to simply buy the car from the dealership based on the pre-negotiated price. (Internet is amazing)

    The salesman was cool as hell, and everything was going without a hitch until the he came back with his manager. The manager wanted to know if I would be willing to use one of their banks if they could get me a better rate. I said “sure, if you can find a rate better than 7.24% for the life of the loan, I would gladly use your bank.”

    Oh dear lord, if I could only go back and smack my stupid, stupid mouth into silence.

    Because that scumbag used my verbal consent to run 15…FIFTEEN credit checks on me with different loan operations. If I hadn’t already secured the loan through USAA, I would not have been able to buy a car for years, because the next day I received a notification of a change in my credit score. That little stunt the manager pulled dropped my credit from 633 to 545. Just because they INQUIRED about my credit.

    There is, however, a decent finale to this story. The last of the ridiculous debts for equipment I had returned finally rolled off this month. A sum total of $239 that I had already paid once, and was still haunting me. But no longer. I am now officially debt free, and I discovered the most horrifying thing of all once that debt was removed.

    My credit score of 620 (that I had dragged it up to since the car dealership debacle) suddenly jumped to 730 in all three bureaus. A 110 point difference…all over a two hundred dollar collection that I had ALREADY PAID, even though it was a charge for equipment I had ABSOLUTELY returned.

    This past week, for literally the first time in my entire life, I was offered credit cards with an APR less than 24.99%. I have literally never seen paperwork with anything below that.


    Let me share the secrets of acquiring good credit (aside from avoiding being targeted by collections agencies).

    1) You need to have more than one bank account. For some reason, this reflects well. But only if they are older than 5 -or in some cases 10- years old. So open accounts now. Savings accounts that have no fees are perfectly good.

    2)Get credit cards. Even if they have 24-29% APR, get them. But don’t really use them. It’s a test of will, I know. Buy something small and slowly pay it off. It’s ridiculous, but they don’t like to see you with NO debt and they also want you to use less than 30% of your total available credit. However, it looks bad if you have ZERO debt. Absurd, I know.

    3) Do not apply for credit outside of the two or three things you need to make #2 work. It will crush your score by 5-9 points per inquiry. And credit companies have ‘breakpoints’ on scores. A 650 is an acceptable score, 620 is not good. If you’re hovering near a breakpoint, one sinlge inquiry can knock you down to bad standing for 8 months to more than a year.

    4) Get a credit monitoring account. It allows you to see precisely what is causing you problems. Even if you only use it for a month and cancel, the amount of information you receive is worth dramatically more than you pay. The added benefit of the monitors are that they alert you to your social security # being used/queried/sniffed by any entity. It’s a solid safety net if you have any concerns in that regard.

    Sorry for the extended comment, but I truly hope I helped someone.

    • Thank you for sharing this–I’m absolutely sure your comment will help someone. I think it’s great advice to get a credit card and never use it (or use it once a month for a small payment and pay it off that month).

    • I do not carry any debt at this time, but that is NOT the way it went for most of my adult life. I was raised to believe that if you don’t have any cash, just ‘put it on the plastic.’ My father always had creditors calling him.

      My first credit account was at a jewelry store where I bought my soon-to-be husband’s wedding band – I was 18. I worked at the mall and got paid weekly. I soon had a credit card for several individual stores. Every week when I cashed my paycheck, I’d make my rounds to all those stores making a partial payment. It worked out great! I started getting pre-approved credit card offers in the mail. I think I was probably around $3500 in debt at the time (late 80’s).

      Then I got married and moved. It took a couple of months to find a job, so I got behind. Then the creditors started calling demanding that I pay all my arrears immediately. Well, if I didn’t have $10 for my payment, I damn sure didn’t have $30. So I just ignored them and stopped answering the phone. I got a job and was able to pay some things off. Others I just left to twirl because I was already in hot water with them. Paying them wasn’t going to get me out of hot water.

      Fast forward a few years later when I got divorced and moved back in with my mother. I didn’t change back to my maiden name because I knew if someone asked for me by my maiden name, they were probably a collector. They would outright lie about who they worked for – like one said he worked for the sheriff’s department when he was a collector trying to get payment for an outstanding fix-it ticket. The internet was in its infancy. It would be several more years before I had a computer and internet access.

      Fast forward two decades later when I am back at Mom’s again taking care of her. She used to send me to the store all the time with her credit card. That was fine til she came home one day announcing that she’d gotten one of those fancy new cards with her photo on it. Well, we didn’t look alike! The signature I’d mastered back in school when “mom” signed off on my homework. So she ordered a copy of her card with my name on it. That translates to adding me to the account. I didn’t realize the gravity of this until my mother passed away. I didn’t have to turn in my card or even close the account – just switched it into my name. So now I have a credit score I did not earn. I possess a credit card that says I’ve been a customer since 1979 (I was 9 yrs old). I, too, have USAA and have used them for buying my first new car. I didn’t finance through USAA because I now qualify for zero-percent loans on certain models of car. I distinctly remember the salesman asking me if I knew my credit score (I did) and he came back awhile later stating that it was about 40 points lower than that. Now you’ve got me wondering if he ran my score after all those inquiries and lowered it in so doing.

      I recognize that I was/am extremely fortunate to have had parents that helped me with necessities (new tires, new vacuum, etc.) when I needed the help. That said, things could have gotten a ton worse if I’d maxed out all those cards. The preapproved cards offered me a limit that was inconsistent with my ability to pay. Even USAA sent me one under my maiden name. I crossed out the last name and wrote in the new, lied about my income (I wasn’t working at the time), and ended up getting a card with a $5k limit. I never used it, and the account is still alive.

      Funniest thing about my credit report today: I’ve gotten dinged for having two car notes paid off. Huh? A car loan is not a credit card and is supposed to be paid off by a date certain. I don’t know why that should knock my score down because the accounts closed when they predictably should have.

      The biggest contributor to the credit score aside from payment history? Percentage of your credit limit used. Like you said, they want you to use less than 30% of your credit limit. I accidentally made a payment early – at the ‘magic’ time when the credit report gets pinged. All of a sudden I had a credit score of 817 (just for that month, mind you). Now it stays pretty normal except for taking a dip after Christmas or after a vacation due to the higher balance. You won’t get dinged for having zero balance. You get dinged for having zero accounts. I only have two credit cards – my BofA (from 1979) and the USAA card (that’s never seen the light of day). The more accounts you have open all over the place, the greater risk of fraud. Also, you’ll take a credit score hit when you finally close some accounts so the bills and ads are less annoying.

      I monitor through Credit Karma’s free version. They don’t care how many accounts you have; they don’t like to see accounts close, and they don’t like to see you with a high balance even if you pay it off every month.

      • Sara: Thank you so much for sharing your journey through credit card debt and credit ratings, and I really appreciate your insight about credit scores.

      • Not gonna lie, you had me in the first half.

        I was so certain you were going to say that you inherited a mountain of debt on your mom’s account that you had never known about. VERY happy for you that she took care of those cards. Rare occurrence indeed.

  4. When I tried to go to college right after high school, I was unable to gain any type of financial aid since I didn’t have any credit to my name, which was when I got my first credit card. Growing up, my family didn’t have the best financial support/background, so when I got it I was determined to use it only when needed/emergencies. For the most part, everything was great, I was able to build my credit super well and I am proud of everything I accomplished.

    2020 was a rough year for me with my credit card. When I was furloughed from my job, I ended up using my credit card to help support me until I found a job. This put me into extreme debt and no matter how much I paid monthly (even extra) I felt like I wasn’t going anywhere. Indeed, my credit score dropped, not to a bad point, but less than what I hope. This past month, I was able to take out a personal loan to consolidate my debt giving me a manageable payment along with an end in sight.

    I continue to use my credit cards, but only for the purpose I originally got them for. They are much better managed (paid off each month) but I’m not going to lie, it was hard, it still is to a degree. Like I always say to myself though, there is a storm, but they don’t last forever.

    • I’m sorry you got caught in that cycle, Josh. I can’t imagine how it feels to be paying as much as you can and still not going anywhere.


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