Life 101: Money Matters — Why I Cut Up My Credit Cards

BU Today asked a group of young alums how they made it through the obstacle course of everyday life — like working, budgeting, and dating — when they left BU behind and entered the real world. In this four-part series, we share their stories and tips. Check back tomorrow for Karie Frost (COM’00), Roberta Halloran (CAS’03), and Marisa Hudy (CGS’02, CAS’04) on making new friends, online and in the real world.

Click here to read Part One: "How I Survived My First Job — and Found My Amazing Second One."

After I graduated, money was a constant stress; a constant obstacle. There were so many times I was filled with complete and utter panic, wondering “How am I going to pay the rent? How am I going to make things happen for myself?” Eventually, I realized that every year millions of people graduate, and, like me, they worked at Starbucks full-time and have other part-time jobs. They make it work — and I could, too.

My biggest mistake was paying my credit card bills late throughout college. Because my parents got all my credit card statements, I had to wait until they mailed them to me. I never felt it was a huge priority to pay everything off; I didn’t really understand how negatively that can affect your interest rates and debt. Now I’m paying for that in terms of trying to improve my credit.

Everyone tells you, “Don’t get credit cards — just don’t do it — or just have one and use it only for emergencies.” But even though you know you shouldn’t use them, you still do — and, to be honest, having credit cards when I wasn’t making too much money offered a buffer zone: if there was something I needed to do, like fly home, I’d use them and deal with it later.

I really got caught by signing up for all these store credit cards from places that give you a discount when you open up a credit card. You say to yourself you’ll never use the credit except to get the initial money off — but then it’s there, waiting to be used. I had to cut up all my cards when I realized how much I’d spent — and I’m still paying them off …

Now, I keep track of everything. I have a huge Excel spreadsheet that I use to keep track of my credit card payments, and I do all my banking electronically to keep track of how much money I have. Online banking is my best friend when it comes to making sure all the bills are paid on time. Every monthly bill I pay is set up to be paid automatically. It really takes the stress out of it.

I’ve also gotten used to calling up the credit card companies and working out payment schedules and rates. You can’t be passive! Student loans are another big deal — I made a forbearance request to delay paying them back for the first year because it just wasn’t financially possible for me. Then I consolidated everything, and so far I’ve stayed on top of that.

I have friends who went through similar financial problems after college, and they’re also getting back on top of their money. It’s a relief to me that I’m not the only one who went through it. I have other friends who’ve never had a credit card, but that’s actually another kind of problem, because now they have no credit history. So I’m actually glad I went through everything I did.

Two years after graduation, I’m being more proactive about my own finances. You have to learn to get to that point, either from learning from your mistakes or being smart in the first place. All that stuff your parents tell you about paying everything on time? You don’t really think about it as being important — until you have no money and no credit. It’s something I’ve learned to respect.