When I acquired my first ‘didn’t belong to a bank I was with’ credit card it was honestly with the best of intentions.
I have spent most of my employment history on a zero hour contract basis. A zero hour contract is basically a contract where I would be employed by a company on an ‘as and when needed’ basis. I would have no guaranteed contracted hours. Some weeks I could be working 30+. Sometimes I would be given a three week rota with only one shift on it (a short one at that).
This made it impossible to predict an income or even to budget effectively. Some weeks I would be flush, and other times I would be buying a reduced loaf of bread on a credit card as I didn’t even have 40p in my bank account (true story).
So I discovered you could get credit cards through places that weren’t banks. And as I was sick of borrowing money off my boyfriend just to pay my share of the household bills (although he was happy to do it I thought of myself as a parasite during these moments) I decided I would get a new and shiny credit card to use only in emergencies when I had a shortfall in my income.
But then I decided that I ‘deserved’ that new book by my favourite author. I decided I couldn’t possibly wear my current clothes on a night out and I ‘needed’ a new outfit. I wanted some new jewellery and make up to go with the new outfit.
Soon I had maxed out the card, so as at this point I still had a passable credit rating, I applied for another.
And then another.
Until I had 5 maxed out credit cards, increasing bills to pay and was still on a zero hour contract.
I wasn’t afraid of hard work. At one point I had SIX part time jobs at the same time just to try to desperately earn an income.
That is why one thing you will never hear me say is that my income is too low or that I need a better paying job.
Because they wage I’m on at the moment, whilst still entry level, makes me feel like a millionaire.
It’s just that I spend nearly £300 of it getting to work a month, and I spend an almost equal amount of that just on my debt repayments a month.
It’s not my income that’s the problem. It’s me, and my bad habits in the past.
But I have good news.
In 2016 as all I did on 4 out of 5 credit cards was pay towards them each month they started throwing balance extensions my way. This meant my ‘credit utilisation rate’ went down (meaning I had borrowed a small amount of money compared to what was available to me) which meant my credit rating went up!
I get a free credit report every month. It is by no means a perfect indication and the company I go through isn’t the best, but since I am not really applying for anything major in terms of credit all I want is a happy little indicator that I am doing good. And the day the report comes out is a good day for me as I can see the little, probably meaningless, numbers go up.
This means I have better options available for me in terms of credit, such as a nice low rate balance transfer card.
I have been accepted for a new 0% balance transfer card and soon all my credit card debt will be at 0%, meaning when I spend £250 a month on my debt payments, you know that it will all come off my debt.
Previously I was lucky if over £100 of it was cleared from my debts a month.
I got myself into this mess and I don’t mind working hard to get out of it, but will still do things to ease the journey. A 0% balance transfer card is a good compromise, it is still a debt, but one at a better rate.
I know the year is only 6 days old, but things are going well.