On September 15th 2015, I cut up my credit card for a season… yes, a really long season.
When I came back into America to pursue residency in 2012 I had no credit. None whatsoever. I’d never worked or paid a bill in this country in any capacity to generate credit or to have a credit score. I previously lived here on an student visa and then subsequently on a business visa – both of which prohibited me from working. (N.B. Not all F-1 statuses prohibit work).
But, 2012 was going to be different; this time I was on a student- exchange visitor status and I could work but only at one designated hospital and for a fixed income.
Without credit, I quickly realized I couldn’t purchase much because I had NO CREDIT HISTORY. You can see why it was important for me to create one. My virtual big brother from medical school, who happened to carry the same passport like I had and was obviously previously subject to these same regulations helped me figure out how to acquire a credit score out of nothing. We applied for a high interest low limit card using my potential income as a resident doctor. It worked and I got my first credit card.
What I didn’t realize was in the process of making purchases and paying them off to build credit, I quickly lost track. I did well for the first year of owning the card; was very responsible with it. But, by my final year of residency I began to live in the future.
I quickly started to live above my means; living in the future of the illusion of a higher income earner. I really wasn’t purchasing any ostentatious goods, but my daily expenses were no longer within my budget and I wasn’t planning appropriately. Before I knew it residency was over and I overstretched my purchases in the last 2 months of it, so much so, I was deep in the red.
Expenditures > Account Balance.
This is when I decided to do better with plastic.
I think being in the red did something for me. It was particularly bad because I didn’t receive a paycheck for 6 weeks and had zero savings from residency. So I added to my debt by stretching my spending limit.
Second Big Problem!
It was a financially irresponsible move and it provoked a great deal of anxiety to live without a financial safety net. I never want to feel that level of anxiety again. So even when I started working after the hiatus all of my first 2 pay checks went straight into undoing the harm I did to my accounts and it’s accrued interest.
You bet once the balances were paid off; I cut up both those cards and vowed not to utilize a credit card until I became more financially responsible.
Fast forward to now; I own one of such cards for travel and specific expenses. I don’t swipe it unless I have the cash waiting in my purse to quickly pay it off or when I want to get travel miles. Oh Hi Delta Airlines 😉
Now, here is my point, if you didn’t get it all along.
– Be financially responsible with plastic (credit cards). If you can’t be (like I once was), then do not own one.
– If you don’t have the money, don’t spend what you don’t have. Be content with whats truly yours.
– Live way below your means.
– Do not borrow from your future.
If you can’t do these things, maybe you should pay off your balance and cut your credit cards until you’re financial lay responsible to own one.