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One Girl's Debt Confession

Nicola Graham
Nicola Graham

I’ve got a nasty secret. One of those kinds that I’ve been silently ignoring hoping it would go away without too much hard work. My nasty secret is debt and unfortunately due to compound interest (ie paying interest on top of interest), it certainly doesn’t go away easily! So today I’m bringing my cards out of the closet and beginning a quest to get rid of debt ASAP!

Confession One: Store Credit Card

Earlier this year my old laptop died. So I got a new one. On my Q Card for three months interest free – sounded like a good deal. I said to myself I’d pay it off in three months. A seemingly good plan, but it didn’t happen. Now to air my dirty laundry, I have $1400 remaining to pay, most likely at a high interest rate - I’m too scared to check….

Lesson to be learned – Don’t fall into the same trap as me. Interest free periods are fantastic, but make sure you pay off the balance before the period is up.

Confession Two: Credit Cards

Credit cards are definitely handy for buying online, going overseas and the odd emergency. But they are an easy debt trap that many fall into. Me included. The thought that constantly rings in my head when I use my card is “ I’ll just put it on credit and pay it off next payday in case I need the cash for something.” Good in theory. Unfortunately, the paying it off at payday part didn’t happen that often.

My other great idea was to take up a GE Credit offer I got in the mail offering me no interest for six months if I transferred my credit card balance to a GE credit card. Ok so this was a great idea, but unfortunately I didn’t pay that off either, so it soon turned into a bad one. And to shame myself further, I also continued to use my previous credit card. This had a near zero balance post-transfer and I soon began to clock it back up. So I now have two credit card debts.

After the 6 month interest free period was up I panicked a bit. The interest rate with GE was almost 25 percent - crazy! So I transferred my credit balance again to BNZ who had a special balance transfer deal of 6.5% interest. Phew. Now I WILL pay off the credit card in 6 months. Promise!
Now I have two credit cards totalling $3100.

Confession Three:

I’m sill nursing a student hangover – aka an interest free overdraft. If I could turn back time, I would live a much less luxurious student lifestyle (less new clothes, less Sunday brunches, among other things…). I suspect this could have avoided the $1400 interest free overdraft I got.

The bad thing is I actually can’t even remember what I got the overdraft for, let alone why I extended it two times. Now I’m a graduate, the overdraft is still interest free, BUT not for too much longer. How depressing to think I have to earn $1400 to have a $0 balance in my bank account.

For all the students reading this, here is some advice I wish I’d taken - only get an overdraft in an emergency and have a plan in place to pay it back.

Grand debt tally

Total calculation of debt = $5,900 (Not including my student loan, but that is a story for another time)

Calculating the almost $6000 total gave me a wake up. A scary one. Sure it’s not as much as some people’s debt, but for me and my salary, this is a lot! This blog will track me getting out of debt as soon as possible and hopefully help you with what I learn and achieve along the way!

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