Tips For The Unrelenting Creative: I Blame Oasis For My Credit Card Debt

Hi everyone,

This week, I’m trying out a long-form essay for the newsletter instead of 5 short tips. At the end, I also list a few action steps to help you think about using credit.

I’d love your thoughts as I’m still working through a few tweaks with the weekly newsletter.

As always, thank you so much for reading!

Oasis is the reason I had over $38,000 in credit card debt when I turned 30.

That’s right, I blame you, Oasis. You and your “explosion onto the English Rock scene” in the mid-90s left me with only one clear choice; I had to purchase (What’s the Story) Morning Glory. Purchasing CDs was not a new endeavor for me, by the time 1995 rolled around, I already owned well over 100 CDs. The distinction with the Oasis album is that it was the first purchase I made with a credit card.

In 1995, the year I entered college, I couldn’t walk more than 100 yards without bumping into a table of people working for a major credit card company. Their hope was to “help” students like me successfully open their first credit card. Shortly after I arrived on campus, I signed up for a shiny Visa credit card with a $500 credit limit. The people helping me sign up for the card promised that it would help me build credit so that when I made a big purchase like a car I would be in great shape to get the best interest rates available. This all made sense and I felt like if I made good decisions with the card, it would help me in the long run. The problem was that I couldn’t make good decisions if I had no idea how to manage money.

In the beginning, I was responsible. I would charge something and immediately pay off the card before the end of the month. For months, when the end of the month came around, I had a zero balance on my card. My responsible spending paid off, by the spring of 1996, Visa had raised my credit limit to over $5,000! Imagine what a 19-year-old who never received financial literacy training, wasn’t working, and loved material things like CDs did with a credit card that had a $5,000 credit limit?

This set up a vicious cycle: The credit card gave me a false sense of financial stability even though I wasn’t making enough money to pay it off. Having a high credit limit and a (fairly) low balance allowed me to transition the use of the card to wants instead of basic needs. To be clear, I acknowledge that I should not have been using a credit card at all but my money management ignorance allowed me to spend freely.

I don’t remember making any huge purchases with the credit card, but I did treat it like an extension of my bank account. I started using it for everything: Going out with friends for dinner and a movie, wooing my girlfriend, purchasing books to read for fun, and even putting gas in my car.

I made some money through a work-study position on campus, and my original plan for those funds was to save up that money to spend on necessities like food and supplies during the summer when I was performing at music festivals. Instead, that money went to make minimum payments on the card. When summer came around, I had to use my credit card to make food and supply purchases.

If you’re not familiar with the life of an aspiring artist, the summer months are not time to relax, they are the time when you seek opportunities to continue to practice your art. I spent every summer between 1995 and 2002 participating in some form of Summer Festival. All of the festivals were between 6-8 weeks in length. My professors told me that this was an opportunity to get ahead and really dig into honing my craft. While that was mostly true, it was also a time when I piled on an absurd amount of debt. While the typical college student spends their summers working and saving for their next year in school, I—like so many of my peers—spent my time in a practice room, not making money.

When I turned 20, I made the stupid decision to join the Columbia House Record Club, a popular mail-in music club that originated in the 70s. On paper, the plan to join looked simple: sign up for free and they would send me ten CDs of my choosing. After that, I needed to purchase 4 additional CDs over the next year and my obligation to the company would be complete. I loved music and was eager to build my collection of CDs so the idea of purchasing four additional CDs over twelve months was not a big deal.

The problem with the club was in the fine print. There were all kinds of hooks that caused me to spend more money. First, CDs regularly cost $20-$25 each, far more expensive than if I had gone to a local record store for the purchase. Second, you had to “opt-out” by mail on their monthly picks. Guess who has always been HORRIBLE at responding to opting out? That’s right, the guy who added probably 15 CDs at $20 apiece to his collection. Finally, the worst part was that all of the charges were on my credit card. I probably spent well over $1,000 on CDs by artists I didn’t even like. By the early 2000s, I had over 1,000 CDs, most of which were purchased on credit.

My relationship with my credit card spiraled out of control. At the peak of spending in 2007, I owed over $38,000 to credit card companies. I carried credit card debt every month from April of 1996 until May of 2017 when I finally managed to pay off my last card. I was 40.

Gather round kids, because here’s the moral of the story (Morning Glory): It took me over 20 years to pay for the purchase of that Oasis CD in 1995. (Thanks a lot, Oasis).

Here are the lessons I learned when I used credit cards:

  1. The more debt I had, the less flexibility I had to take risks and pursue the things I really wanted to do. Credit card debt didn’t seem to be a big deal in my 20s but in my 30s it prevented me from making major career and life decisions.
  2. Debt is crippling, humiliating, and painful to confront, so much so that I stopped caring about how much debt I was actually piling on each month. I remember sitting down in my basement on a cool spring day shortly after graduation and confronting the thing I feared most by compiling all of my debts into one spreadsheet. As painful as that exercise was, it truly helped me take steps to confront my spending habits.
  3. It took me just over 12 years to get into debt and it took me almost 15 years to get out. When I made my last credit card payment, I hadn’t used a credit card in almost 10 years. Some of this debt was unavoidable, but most of it was not necessary to take on in order for me to achieve my life and career goals.
  4. If you have credit card debt, the time is NOW to get your shit together and pay it off as quickly as possible. I came up with a detailed plan to pay off my credit cards and it took me about 15 years to tackle this debt. Make a plan to take care of this now!

Thinking about taking out a credit card? Here are my thoughts.

One of the quickest and easiest ways to get in a financial bind is when you use credit cards to support your livelihood. Otherwise known as consumer debt, purchasing things on credit places more burden on you to make more money each month in order to service the debt you have. Here are some things to consider when trying to decide whether or not to take out a loan or get a credit card.

  1. STAY AWAY! My strong recommendation is that you stay away from this kind of debt at all costs and focus on purchasing everything with cash.
  2. Take out a credit card only if you can pay it off completely each month. The way that people get behind on their credit cards is when they fail to pay the total balance of their bill. If this happens, they are subject to high-interest rates and end up paying more for purchases in the long run. Interest rates for credit cards typically sit between 12%-18%.
  3. Building your credit history/score is not a reason to take out a credit card. Many people argue that building your credit score will enable you to receive more favorable rates when you go to purchase a car or home. While this is true, it is not a reason to take out a credit card. Again, the ONLY reason I would recommend that you take out a credit card is if you know, without fail, that you can pay off 100% of your balance each month. Otherwise, don’t do it. If you are truly intent on building your credit score through a credit card, one suggestion here might be to have one credit card and have one of your fixed payments attached like your cell phone. You can then automate the process of having your card paid off in full each month.
  4. Rewards programs are not a reason to take out a credit card. Yes, it’s true that credit cards have all kinds of rewards programs to entice you into using their company but my sense is that you’ll spend FAR more money over time in pursuit of those miles than you would if you simply used cash or a debit card. The credit card companies figured out the psychology around this a long time ago and they’ve figured out every way to make this work in favor, otherwise they wouldn’t be pushing the incentives so hard.

How to Tackle Your Credit Card Debt

Digging out of debt can be some of the hardest work you’ll ever do. It takes discipline, attention, and consistency. It also takes time, but the process of getting out of debt is actually quite simple. Here is some quick advice on how to tackle your Debt.

  • Step 1: Collect all of your credit card statements and place them side by side on the table. If you don’t receive paper statements, it is important to physically print them out so you can easily compare information.
  • Step 2: Make sure you are able to make the minimum payments each month on your debt.
  • Step 3: Build up $1,000 in savings for use as an emergency fund. This way, if you have to take a last-minute trip, or your car needs repairs you can dip into your emergency fund instead of charging your credit cards.
  • Step 4: Tackle loans with the highest interest rates first (credit cards included) — For those of you who have more than one loan, I recommend that you find the loan that has the highest interest rate and pay that note first, then move to the next loan. Alternatively, you could tackle the smallest loans first, because who doesn’t love to see a loan balance hit zero! This is called the snowball effect.
  • Step 5: Make sure you have a way to chart your progress so that you can keep your eye on the prize!

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Nate Zeisler is the Dean for Community Initiatives at the Colburn School in Los Angeles. He envisions a world where students majoring in the arts have a clear path to a sustainable career, where creative minds are empowered and inspired to rule the workforce, and where access to the arts is not just for the privileged few, but for all.

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