Cutting the Credit Cord

Recently I have taken a moment of pause, appreciating the steps I have been taking to rid my life of unnecessary things. Steps like a commitment to saving money. Because just four months into my new job, I cleared all of my monthly bills (my day to day living expenses are covered through my job). I paid off a year on my storage unit. Ok, it’s not gone entirely but at least rent is covered for a while. I also paid off both of my credit cards. Hooray! Kudos to me. How lovely is that feeling to know that when I’m too busy scrambling to work out what day it is, I don’t need to work out what the date is as well to see if I’m early or late to pay bills. Unwanted bills at that.

I phoned up the credit card companies and cancelled them. Both operators had the same response.

“Why do you want to cancel this card?” Asks the man on the other end. “You may need to use the card at some other time. Until then you will not be charged any fees.”

I’m not interested. I tell him, “Because I don’t believe credit cards and debt repayments are a good choice for me and I don’t ever want to be in this sort of debt again.”

Both concurred they had to agree.

This moment is a big deal for me.

Like a lot of people I grew up in a family with more kids than money to spare. My parents worked hard to provide us with whatever they could while at the same time instilling in us a work ethic of diligence, persistence and saving for what we wanted – that good things came if you worked hard and saved for them. I got my first credit card out of necessity, as an emergency backup for my first big international trip.

Initially, in accordance with my good ethics, I promptly paid off my credit card each month. But years of living internationally, wiring money manually at Western Unions to my parents who would collect it and then deposit the money into my home bank, or waiting out the days-long international bank transfer time periods, plus the vast amounts of travelling and credit card charges it incurred, and a ballooning overdraft in line with my increasing salary – combined it provided ample complications for my ability to pay off credit each month in a timely fashion. Yet with my high paying jobs, I wouldn’t say I was living beyond my means. Anytime I maxed a card, a few months later when things settled down, I’d be back in the black. However, the tide changed dramatically when I moved home to study and very quickly slipped below the poverty line as an unemployed student. While I cleared my balances a couple of times with steady work over those 5-6 years, mostly I was living as cheaply as I could and there just wasn’t enough money to go around. Credit would be the only way to pay for things I needed like printer ink or shoes to cope with Melbourne’s heavy winter rains. I had so many shoes that leaked that I reached a point where I no longer believed waterproof shoes existed. But that’s another story.

One year my laptop died. I went without through a whole summer but was soon forced to get one of those awful credit deals on a second credit card through a well-known furniture and electrical store in order to have another laptop ready to cope with the new semester and my various commitments. My first high interest card was already maxed, and it wasn’t long before I was using the second card for those extra purchases you need to get by. Financially supporting myself through university was probably the toughest thing I ever had to do, it was a huge strain emotionally. But there wasn’t much of a choice for alternatives; having lived most of my adult life outside of Australia and being broke when I was home in Oz, I had a low credit rating such that even my own long-time bank could offer me no help regarding consolidation loans or any financial relief. Credit was the only thing that saved me, time and again. Much as their minimum payments and 20% high interest rates were killing me.

When I finished uni and spent several months in work without getting even one step on track financially, that’s when the international job prospects became more tempting. Getting out of debt forever? Yes please!

It’s been a different ideology this time, working abroad. Gone are the yearnings to take mini breaks and spend vast amounts of my salary. I have everything I need and the ability to buy it with a regular salary. Frankly, I don’t actually have time to spend money. My job keeps me so busy that I quite happily put aside 80% of my salary to savings.

If I keep it up, I can be debt free in a year. That is my ultimate goal. But for now, I’ll just enjoying having no credit.

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