The American Dream: All the Credit Cards!
By: Brandon R
Tags: Dave Ramsey, Credit, Budget, Credit Cards, Finance

Photo by Sahand Hoseini on Unsplash

As I drove to work Monday morning, (Name Brand) energy drink in hand, I listened to a personal finance podcast on my 45-minute commute into the office. As I listened to them, I began to reflect on my own financial situation. I had a six figure job, we had a beautiful house, our kids were involved in several extracurricular activities…the only thing missing from our perfect American dream was the white picket fence! Yet, in the background of it all we had substantial credit card debt and little in actual savings or investments. What happened?

Comfortably sitting in my Mid-30s now, I suppose the easy cop-out would be I was raised wrong. No one talked to be about finances when I was a child, so it is their fault…right?

Well, I am sure we can all agree that at some point we all need to take responsibility of our own lives, and so of course we need to dig into this deeper. Looking back at my adult life, I can confidently say the tides of negative financial irresponsibility (if we want to give it a name) occurred when I was just turning 19. At the time I had a stable job in the Military and a little bit of money in the bank. I received an assignment to move overseas, and a friend mentioned I should get a rewards credit card to get the points on the flight I would be taking. I did not even know what he was talking about, but with about an hours’ worth of research I had not only found but applied for an American Express Delta Rewards Credit Card! I think we can all see where this is going.

Photo by Mark OFlynn on Unsplash

There I was, 19 years young and a Credit Card in hand with a $20,000 limit! Yes, you read that right $20K! American Express gave a 19 year old kid his first Credit Card with a massive limit. At first it made sense, I did get a bunch of introductory points and subsequent points for the flight I took. This would later allow me to get a “free” ticket to travel back home and see family. And it is this mindset, the greatest marketing tool of our time (some might argue)…Credit Card Rewards.

If we look at this from a technical standpoint, it makes sense. If I need to spend my money, why not use the American Express and reap the rewards…free money! While this is technically correct, in practice it rarely works that way for many of us. Speaking from experience, telling my 19-year old self to use the $20K limit Credit Card wisely is about as effective as telling a cow to watch how much they eat. Looking back, it took me about 1 year before that card was effectively maxed out and I was paying the minimum balance just to ensure my credit score remained high. At a great interest rate of around 15%, I really showed them who was boss!

It was not long, I found myself spending all my cash and paying the minimum on this card that I was coming up short each month. Let this reality be enough for you to not want to make this mistake, when I go to swipe my card at the grocery store checkout (everything is bagged and ready to go at this point) and the little machine says my card is MAXED OUT! Yikes!!!

You might say, well that was it right? No more careless spending for you…well, I wish I could tell you I cleaned my act up. Instead, I just got more Credit Cards. At one point I was rotating as many as 10 of these magic pieces of plastic just to keep the lights on. Keep in mind, there was not one thing I could point to that cost me so much money either. I was not spending a ton of money on cars, and with a family we rarely went out to eat and never went to bars anymore. There was not this one big glaring bad guy I could point my finger at, unless I looked in the mirror.

Do not worry though. As I write this today, I have discovered the root of my problems and have been effectively working to clean this mess up. The problem, you ask? CREDIT CARDS! You think you might be winning with the rewards, but reality says otherwise. What ends up happening, you just start making all these microcharges and do not think twice. $20 on Amazon this morning for a blender on sale, a few bucks extra on gas because you didn’t want to drive the extra mile to the cheaper gas station, $3 dollars on your morning coffee, a $15 dollar recurring subscription to some random Music streaming service you probably hardly ever use, and the list goes on forever until suddenly you have $60K in unsecured debt and you are looking back in shock and awe!

So how did I start this journey to debt freedom? Remember that friend who mentioned Reward Credit Cards to me so long ago? Well, a couple of years ago I was at work and another friend mentioned a name as we had a general conversation about the marking and finances, Dave Ramsey. I will save my story about Dave for another article, but I will say he is a genius and a saint for what he does. He has developed a solid program for getting people out of debt, the baby steps, and driving them towards financial peace. If you have read this far, I will leave you with this: If you have no debt, keep it that way. If you have debt, look up Dave Ramsey today. You will not regret it!