Credit Card Debt Full Of Forgotten Items

The following exercise will be enlightening to those deep in credit card debt, entertaining to those not in debt, and a cautionary tale to those too young to have experienced it. If you are in the former category, like me, I encourage you to hunt down your most recent credit card statement, or simply lookup your credit card balance online.

How Much Of Your Debt Can You Itemize?

Now that you know how much you owe, set aside five minutes, grab a sheet of paper, and brainstorm all the things you purchased with that credit card. How much of the outstanding balance can you account for? 50%? 75%? 100%? Your answer is probably indicative of your relationship with credit cards. The lower the amount you can account for spending, the higher the chances your spending is out of control.

A Credit Card Debt Audit

I’m fortunate that I’ve been able to whittle away at my credit card for some time now, and am finally seeing the light at the end of the tunnel. But even as the balances decrease, memory of the purchases made to run up the debts fail me. Well, there was the vacation we took in 2007; back to school clothes for at least a year or two; the occasional car repair; and the new bedroom furniture we just “had to have.” That represented about 70% of my remaining balance, and I’ve paid it down over the last year!

The other credit card charges were mostly forgotten living expenses. Expenses charged because we were living beyond our means. Sure, we had our share of legitimate emergencies, health scares, and educational expenses associated with my dream of completing a degree. But to justify accumulating debt for these reasons is to make excuses for our lack of financial planning. We should have had an emergency fund in place. I should have saved for school and paid cash.

I guess the lesson learned from this exercise is that the things that we “just had to have” probably could have waited, because only a year or two later I can’t even remember what half of them were! Sad. The rest is accumulated interest and probably the occasional fee assessed before I got my act together.

Armed with this information I can do two things: I can sell as much of the stuff I bought as possible and apply proceeds to my remaining debt, and I will no longer charge impulse or lifestyle items on my credit cards. I keep exactly one card in my wallet for emergencies, and I promptly pay it off immediately in the event I have to use it for car repairs, a replacement appliance, etc. Never again will I find myself wondering where half of my credit card debt comes from. Never again!

Comments

  1. Thanks for the great post. I agree with Lynn that stuff really isn’t that important. What’s the point of having more clutter that you take years and years to pay off because it was on your credit card?

  2. For years I held on to the very first purchases that I put on a credit card, thus the start of my credit debt. When I paid off my debt, I threw out that tank top and skirt that I “just had to have.” Great post! I will gladly take money in the bank over more stuff.

  3. This was a great post! I very much identify with the “what did we actually purchase to run up that kind of debt?” feeling when credit cards have soared in the past. It can be a very hopeless feeling not to have a clear sense of where your money or debt went to. We have made it a point to start itemizing where our monthly spending is going (we dont’ use credit cards right now but can still benefit from this with debit card purchases)…and feel much clearer and intentional about our spending overall. Thanks for the post.

  4. When most of the credit card balance consists of my wife’s truck, then yes, I know what is on the cards — it hasn’t been forgotten. And we still use it regularly; the truck I mean, not the card. :-)
    We transferred the remainder of the loan so I could take advantage of a %2.99 APR on the credit card while saving 7 percentage points over her initial auto loan. Plus it gives us the added benefit of having the title free and clear as well giving her reduced insurance rates from driving a paid-for vehicle.
    There are a few other things on the card, but I still have them and use them to this day. I’ve long since broken myself of that “put everything on the card” habit which is just another way of saying to yourself that you CAN live outside your means. It’s just not possible for very long and it pains me to see others doing it.

  5. I don’t have any credit card debt anymore, but my high point was about $10000 credit card, $30000 student loans. And I can remember the very first thing. I got a credit card when I went to college and bought an instant camera and film for maybe $100. I shudder to think how much I really spent on that camera (and of course I had the debt for far longer than the camera).

  6. When I was single I would look at my credit card statement like I was waking up from a night of drinking “What did I do??” Disposal income led me to buy hundreds of dollars of stuff that couldn’t be accounted for later on. Had I only knownw then what I know now. . .

  7. My $6,400 in credit card debt is all from attorney’s fees…at least I know that for sure! The rest of it- a little over $30,000- is all from my hubby: his car, his student loan, a personal loan he took out for his ex that she won’t pay back, etc. It’s a good thing I walked into this marriage without any debt of my own- he’s got enough for both of us!

  8. The cards are paid off, but I’ll be paying for years those lunches & dinners that we ‘paid for’ with student loans. I kick myself now, but all you can do is move on, get a plan, and enjoy the process of paying it down for good.

  9. @Savvy Stepmom…you took on all his debt? YIKES. For sure, there is a place in heaven awaiting you (in 100 years or more).

    Imani
    ~I vote~

  10. One of the best things I heard on the tv was that this generation is actually depriving our children in a different way. By giving them everything they want we are depriving them of a balanced life. One thing I try really hard to do is to go into a store and leave without buying anything. My kids are shocked but I re-emphasize the fact that we don’t always have to buy something. We recently sold our boat and paid off our line of credit with the sale. As I was playing with my daughter in our backyard today I thought to myself “I’m so glad that debt is off my back.” Just a couple of things to chew on.

  11. I am so grateful not to have that debt any longer but I am dismayed to think of how much that debt from the past cost me for my future. I wonder how much (invested in a 401K) 20 years ago my Chanel lipsticks, shopping vacations (that’s a vacation from work where all you do is visit malls and shops within a 2-4 hour drive of my house), junk from the ‘discount’ stores and the rest of my ‘must haves’ really cost me. That is, it isn’t just the price of the item and the credit card interest but the lost investment opportunity.

    Sigh….

    All I can do is move forward.

    Great post!

  12. This is why I now leave my credit card at home.
    It’s just too easy to walk around and charge those everyday leaving expenses … they can rack up pretty quick!

  13. this month i ran into a bit of an emergancy, so its the first im i’m ever paying intrest. i’m living on ranmen noodles for the next month to insure that it doesnt happen again :(

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