How I Faced $20,000 in Credit Card Debt and Won

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Several years ago, I made the final payment that relieved me from a crushing burden of debt that took me three years to pay off. Throughout my twenties, I accrued approximately $20,000 worth of credit card debt. While I was greatly ashamed of it at the time, I realize now that I was certainly not alone. It is surprisingly easy to get into debt. For me, the process was slow and not at all characterized by blow-out spending on big purchases: I accrued my debt one moderately-priced item at a time.

According to Charles Schwab’s 2008 “Parents and Money” survey, 71% of parents agree that the best way for teens to learn about money is from guided, hands-on experience or their own example. However, only 20% of parents actually involve their teens in the family’s budgeting and spending decisions. My parents were not in that 20%, but that was because they were looking to protect me from the nitty-gritty of our finances. Unfortunately, the result was that I was ill-equipped to deal with the realities of a confusing and often predatory financial world. When you’re kept away from the water, it’s awfully hard to learn how to swim.

My problems started when I graduated from college. By August of 2003, I had acquired two major markers of adulthood: a job and an apartment. Since everything was going according to plan, my parents did what most parents do when their children are living on their own and able to support themselves: they stopped giving me money. This seemed like a reasonable proposition to me; I was an Independent Working Woman, after all. Unfortunately, my grip on reality was rather tenuous, and I had completely unrealistic expectations of what life should look like on an income of $28,000 a year. I was both ignorant and, sad to say, slightly entitled. Phrases like “second-hand” and “bring your lunch” were not part of my vocabulary, but “$13 martini” most definitely was.

The low point of my first year out of college occurred in November, when I was two months late on my minimum payment. Attempting to find out when I was going to give them the money I owed them, Chase called me at work. That wasn’t even the worst of it: I actually pretended to be my own secretary to get them to stop calling me. One would think that such an experience would be a wake up call, but not for me! I had already boarded the runaway train. For three and a half years, I lived far beyond my means, usually paying only my minimum payment, accruing hundreds of dollars in interest (my erratic payment schedule had caused my interest rate to skyrocket from 8% to a whopping 23%) and gratefully accepting my increasing credit limits.

Eventually, I realized that I couldn’t continue like this. I was hoping to go to graduate school. I was getting serious with the man I was dating, and we had started to discuss joint bank accounts. My debt was my most burdensome secret and the biggest impediment to living the life I wanted, so I put all but one of my cards in a chunk of ice in the freezer (for emergencies) and set about changing my ways.

From then on, I was a woman on a mission. A frustrating, awful mission. The credit cards I had made money through the interest and fees they charged me. They kept increasing my limit because they wanted me to keep a high balance: the higher my balance, the more interest they’d earn. Trying to get ahead of the interest felt like a Sisyphean task. I was putting almost $700 a month towards my debt, about $300 of which was eaten by the monthly interest.

Frustration proved to be an excellent motivator, though. Dissatisfied with the progress afforded by my day job, I started taking on odd jobs to make extra money—$100 to photograph a party, $700 for a freelance writing job, $50 to babysit. I even went through a period where I considered egg donation (the fear of hormonal injections ultimately put the kibosh on that idea). It wasn’t always steady progress; sometimes the babysitting money went towards a pair of cute shoes. But I kept at it, and eventually, I started to see appreciable results.

In January of 2009, I paid off the first of my three cards. In August of 2009, I paid off a second. A cross-country move derailed me slightly, but by this past summer, I was down to one card, and every month, the balance shrank. I also had an end goal to work towards: my dream to go to graduate school became a reality, and I was determined to be debt free by the time I started my program. I am happy to report that with the last payment submitted in September of 2010, I was.

Have I remained consistently debt free in that time? Unfortunately, not always. Sometimes life gets in the way: an unexpected move, a big medical bill. However, one of my consistent aims is to pay off my credit card bills in full. Overall, I have revolutionized how I deal with my finances. I budget. I have some savings. I have learned that living within my means, even if my means are less than those of my friends, is something to be proud of. I have learned that with money—just like with other things like eating well and exercising— it’s the big picture that counts. Sometimes it’s worth it to splurge—life is short, after all. The key thing to remember is that credit cards are financial tools, not get-out-of-jail free cards. You will always have to pay, it’s just up to you to determine the cost.


Kate Miltner is the Research Assistant for the Social Media Collective at Microsoft Research New England. She received her MSc from the London School of Economics after writing her dissertation on LOLCats, something for which she has been mocked mercilessly in the comments sections of Gawker, The Huffington Post, Mashable, Time Magazine, and the Independent. She has also written about internet culture for The Guardian and The Atlantic. You can find out more about her at

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