My Credit Card Debt Is As Bad As Substance Abuse

I now, embarrassingly late in the game, see credit-card debt as a problem for many that is nearly as pernicious as drug and alcohol addiction. This shouldn’t be a surprise—there is such a thing as Debtor’s Anonymous, and the same cycle of abuse, denial, and inertia that accompanies habitual substance abuse is what drives my credit-card use: “I’ll quit drinking (racking up debt) next month, after the holidays are over”, “I’ll limit myself to five beers (purchases) a week,” etc.

Where once my goal was to quit drinking by the time I was 30 (a goal I eventually achieved more or less on time), now my goal is to be free of credit-card debt by the age of 40. I still have trouble believing the first of these goals would be easier to accomplish than the second.

But I’ve punched all the numbers (balance, APR, days until July 12, 2016) into various online debt calculators, and the numbers they spit back at me are grim. Even if I halted all credit-card purchases, I would have to hand over nearly half my monthly salary to Citicard for the next 2.5 years, and that’s not feasible.

The trap here is that, seeing how dire my situation is, I’m tempted to say (as I’m sure many others are) “screw it, who cares” and keep spending, maxing out my cards. That’s more or less been my attitude for the past several years. But since I’ve been married and become at least partially responsible for someone else’s financial solvency, I’ve resolved to navigate something of a middle way, a plan similar to what Logan has been documenting on this site. I have actually been successful in not using my highest-balance, highest-interest credit card, and I’ve transferred some of its balance to a new card that’s interest-free for the next 18 months. I will not use this new card to buy anything, and I will be assiduous about getting as much balance off my old card as possible. I will pay down my smaller retail cards most aggressively, since they have small balances and high interest rates. I am also doing a fairly good job of only buying what I can afford with real money, but that’s hard to do during the holiday season, and whoops I also just bought myself a new bike, because biking through Minnesota winters is crucial to my mental health.

So yeah, I realize I have some work to do.

But my new plan is better than the fiduciary equivalent of binge-drinking myself to death. Ultimately, I lay a great deal of blame at the feet of our country’s financial system and the morally hollow, predatory lending practices of credit-card companies. I know I got myself into debt, and I take responsibility for that. But why was it so easy for me to do that? Why am I still solicited by new credit cards almost daily, with my terrible credit? On a larger scale: Why have I not had a full-time job in nearly 10 years? How did I accept as the norm a life where I cobble together multiple part-time jobs, each of which barely pays a livable wage, one of which is at a prestigious institution of higher learning and requires a masters’ degree? How can paternalistic financial advisors keep a straight face while telling me to “set aside” a little money each month that I now use for “lattes” and “movie tickets” when my entire salary is a probably a tiny fraction of what their second home cost?

My indignation and resentment of that naïve privilege masquerading as sober-eyed advice is what causes me to paradoxically and self-destructively spend more and rack up more debt, much as once upon a time my solution to problems caused by my drinking was to, illogically, drink more. But I’m working on it.

 

 

Jake Mohan lives in the Twin Cities. He is on Twitter

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25 Comments / Post A Comment

Meaux (#943)

Sigh. Yep, I know exactly what you mean, with the using a bad behavior to comfort yourself over your bad behavior. I wish you the best of luck in your quest! I have my own credit card debt quest that I’m embarking on, so thank you for posting your goal, as it’s motivating for me as well.

To anyone struggling with debt, please please please contact these folks: http://www.takechargeamerica.org/

Even if you don’t consolidate your debt, they are amazing at helping you figure out how to get out of the hole. I can’t recommend them enough.

I was in the exact same boat: depressed about the amount of debt I had, and the only thing that made me feel better was to go shopping. I wasn’t making enough to support my debt and my shopping habit, so I needed to make a change. 6 years after the fact, I am consumer debt free and my credit score is phenomenal.

WayDownSouth (#3,431)

@Michelle Pittman@facebook well done Michelle. Excellent news

viewfinder (#5,201)

Jake,

This is a pretty important insight. Our behaviors have fundamental biological basis which make changes difficult for many people to make lasting changes.

Substance abuse occurs often because the drug of choice makes us feel good through producing neurotransmitter that enhance our feelings of well being. Over time, as a coping mechanism, this stops working because more and more of the substance is needed to produce the same amount of neurotransmitters.

Certain activities impact the production of neurotransmitters such as dopamine. People with low levels of dopamine are prone to excessive shopping, gambling, and drug and alcohol abuse.
Your insight is crucial because the behavior cannot change unless the underlying biology is addressed as well. Diet, exercise, stress management techniques all help. In some cases, medication may be necessary.

I agree that environmental factors set many people up to succumb to abuse and destructive financial habits but diverting attention and efforts to those issues as paths for recovery is ultimately fruitless and in many instances counterproductive as they increase frustration and levels of stress. It’s difficult to find the solutions or techniques that will work for us as individuals. My battles with alcoholism and financial profligacy have thought me to respect all who choose to fight the good fight. Sounds like you are well on your way. Good Luck to you and know that the fight can be won.

AitchBee (#3,001)

When people write about debt (at least on this site), the “But why was it so easy for me to do that?” question seems to come up a lot, whether they’re talking about consumer debt or student loans. I’m not unsympathetic to the complaint (banks are predatory, and they don’t care about your wellbeing, and they want your money, that’s why), but I’d like to know more about what alternatives people are proposing.

dotcommie (#662)

@AitchBee For starters, one idea is requiring lenders–of all stripes–to verify borrowers’ ability to repay the debt they provide to them. Crazy idea! There are general thresholds about what levels of debt should be affordable to people that vary by the type of debt–for example, you shouldn’t be spending more than a third of your income on housing. For credit cards, verifying ability to repay is actually the law now (it was part of the Credit CARD Act of 2010). Lenders need to verify your income before offering you a credit card or extending your credit limit. It’s not perfect, but it’s a start.

Mae (#1,769)

@AitchBee From what I understand, the current system is the result of aggressive deregulation of the lending industry, starting in the 70s, set in force by a Supreme Court ruling that decided that national banks could not be subject to state anti-usery laws. (The first link is the Wikipedia article on the Supreme Court decision, the second is an article claiming it was responsible for the subsequent bonanza of easy credit and rising bankruptcies):

http://en.wikipedia.org/wiki/Marquette_Nat._Bank_of_Minneapolis_v._First_of_Omaha_Service_Corp.

http://www.fdic.gov/bank/analytical/bank/bt_9805.html

So, one answer might bring back regulations that limited interest rates on personal loans and credit cards. Income verification is another option. Also, repealing the “Bankruptcy Abuse Prevention and Consumer Protection Act” (thanks, Bush administration!) would make it easier for people who have been victims of predatory lending to declare bankruptcy and get on with their lives.

@AitchBee When I was in college, I was a few hundred dollars short of paying my rent. I went to my credit union to ask for a small loan (where I was a member). They wouldn’t give me a loan but instead told me to sign up for a credit card and take a cash advance on that card.

Obviously this is a TERRIBLE idea. And that’s a credit union, who are supposedly the “nice guys” of banking. I’m not saying that I shouldn’t have been smarter than to fall for this, but I was 19 years old, afraid of what would happen if I couldn’t make rent and I took the bait.

I don’t know what the solution is, but stopping that kind of behavior is a good start. It’s possible that the credit union didn’t realize that this was going to be a terrible life choice for me. Maybe the starting point is educating high school students about what money really is. And then taking it a step farther and requiring a class for anyone taking out a student loan.

WayDownSouth (#3,431)

@langedangereux yes, it’s an terrible idea. I’m appalled that the credit union person suggested this to you.

WayDownSouth (#3,431)

@dotcommie it’s an interesting idea. The logistics of verifying the ability to pay would be significant because credit cards are just unsecured personal loans. Banks now check home loan applications thoroughly (or they should), but people still default. I don’t know how you could do this for credit cards.

JakeMohan (#3,423)

That something I wrote was illustrated with a photo of Deacon Claybourne is probably the highest honor I’ve ever achieved. Thank you.

Ellie (#62)

I don’t want to sound disrespectful, and I am very sympathetic to the struggles of those who struggle with financial management, and I think it’s great that the author of this piece has a plan for paying off the debt and not incurring further debt. However, the statement that “Ultimately, I lay a great deal of blame at the feet of our country’s financial system and the morally hollow, predatory lending practices of credit-card companies. I know I got myself into debt, and I take responsibility for that. But why was it so easy for me to do that? Why am I still solicited by new credit cards almost daily, with my terrible credit?” really bothered me. Blaming credit card companies for making it possible for you to make poor decisions doesn’t make sense to me, at least not in what sounds like a situation where the person has access to good information about what makes financial sense, and the spending is not necessary for life and health. There are some circumstances where I think it makes sense to regulate things that make it easy for people to make bad decisions (for example, the fact that teenagers can’t legally buy alcohol, because they are very likely to make bad decisions about using it, or when kids can’t buy soda in school vending machines; hell, I agree with the soda tax) but credit card advertisements to a well-educated person doesn’t fall into this category to me. I realize that not everybody has access to resources about good financial management, but I think that not spending money you don’t have is pretty intuitive.

andnowlights (#2,902)

@Ellie Thank you for wording this more respectfully and politely than I could have.

wallrock (#1,003)

@andnowlights Seconded.

Mae (#1,769)

@Ellie One of the reasons predatory lending has been so successful, though, is that easy credit stepped in just as wages were beginning to stagnate and fall 30 or so years ago. I don’t know the particulars of the author’s situation (it sounds like a lot of his debt was for discretionary consumer purchases, so maybe this doesn’t apply to him), but most consumers a) are not well educated about the risks of credit cards, and b) have few financial reserves, both of which make them vulnerable to aggressively marketed credit.

Eric18 (#4,486)

@Ellie Amen!

nnlsbin (#5,447)

@Ellie i agree!

JakeMohan (#3,423)

You’re absolutely right, Ellie: It makes no logical or financial sense to blame credit card companies for my own spending patterns. That wasn’t my intent with this piece, but I can see how it could be interpreted that way. Rather, my point, which I probably didn’t convey clearly enough, is that logic never entered the equation when I was accruing debt, just as it was on permanent holiday when I was drinking: most addicts aren’t operating out of rational self-interest when they continue to abuse themselves with drugs and alcohol—that’s why sheer willpower often isn’t enough to overcome addiction. My efforts to curb my spending and pay down my balances recall, in a disturbingly visceral way, my early struggles to quit drinking.

Notice that I did say: “I know I got myself into debt, and I take responsibility for that,” and I don’t lay the blame for MY behavior at the feet of the financial-industrial complex. I know exactly how I got myself in debt. I made a lot of stupid decisions and remained willfully ignorant about the machinations of APRs, late fees, and all that fine print on my monthly statements.

Perhaps “blame” is the wrong word. This is a hard dynamic to articulate, and that’s one reason addiction is so insidious: our preferred poisons, being “cunning, baffling, and powerful,” elude logic and language, so the struggle to overcome addition is compounded by one’s inability to comprehend and talk about in a rational way. So let’s set aside the question of blame, to whatever extent possible.

Here’s a more straightforward way of putting it: I believe the system is broken, and other comments here have explained very clearly how the lack of regulation and ardent pursuit of more customers have allowed credit card companies to put more people in debt. If I am misinterpreting you, Ellie, I apologize, but it sounds like you disagree with that—that you believe we have enough regulations on credit card companies and financial-services industry already. Maybe that’s where we part ways.

Another source of the bafflement I was trying to convey in my piece, is that I wasn’t being entirely accurate when I referred to my credit as “terrible.” My credit score is still amazingly high, so by that metric, at least, my debt situation is not a problem in the eyes of the financial system, but by my own metric, I feel like weeping when I look at my credit-card balance. And still I get emails from the cards I DO have telling me I have all this unused credit, and why am I not using it? Get out there and spend! It seems fucked up that some of us have to work so hard to resist the siren call of big debt. But then, I suppose credit is just another product that corporations have to advertise, so of course they’re going to go after their most lucrative market, and yes, I guess I am the sucker who swallowed it whole.

There are efforts to educate consumers about debt and spending, to hold banks more accountable, to increase regulation and oversight, to protect vulnerable consumers. But those efforts seem outgunned by a culture that values acquisition and wealth so much, and a financial industry with the most money and the best lobbyists. I blame myself for my debt, but I blame … what? the cosmos? the Man? for creating a culture where so acquiring so much debt is so normal, and “not spending what you don’t have” is, for a depressingly large slice of the population, impossible.

Ellie (#62)

@JakeMohan Thank you for responding at such length!

I actually do agree with you that there should be more regulation on credit, lending and debt (more than just credit cards – home loans, financial crisis blah blah blah) and that the behavior of credit card companies actively encourages people to buy more on credit and therefore incur more debt. I also definitely noticed that you said that you take responsibility for your own debt. It just doesn’t strike me that credit card companies’ ardent pursuit of customers is super relevant to one person incurring a lot of debt. I would expect a company to want me to buy more of their product, even if it’s unhealthy! It seems to me like this is sort of like expecting junk food companies not to encourage you to eat as much of their product as possible. Because of capitalism, stuff that is bad for us is going to be marketed to us. I think a reasonable person can be empowered to make the right decision. I don’t have any trouble with the argument that credit card companies should be more regulated in what kind of credit they can give people, because in the aggregate it makes it too easy for people without access to good information to make poor decisions. It just doesn’t follow logically to me that “I have a lot of debt, therefore credit card companies should be more regulated.” I kind of feel like if some people can manage to stay out of credit card debt, and they do, then it must be technically possible. This is assuming that the credit cards aren’t being used to purchase items that are actually necessary for the support of life, like food, shelter, clothing, and reasonable extras that contribute to human happiness without being incongruous with a relatively frugal lifestyle. I don’t think you alluded to what exactly you tended to rack up credit card debt by purchasing, but elsewhere on this site a lot of people have alluded to having credit card debt due to eating in restaurants, going on vacations, buying clothes etc. But meanwhile there are a lot of people who don’t use credit for “unnecessary” purchases; they make “unnecessary” purchases (like clothing for fashion not necessity, or more expensive grocery items) out of money that’s already in their bank accounts.

So in short, I agree with most of your points, and very emphatically with the point that the culture we live in makes consuming very attractive. I think it would be great to make some larger points about the deleterious effect consumer culture has on people’s lives. (I just read a book, “Shiny Objects,” on this subject.) I just think that comparing debt to a habit-forming drug, where the spending is so compelling that the average person is likely to fall prey to it, is not the most accurate portrayal, and I would strongly disagree that “not spending what you don’t have” is impossible for a large percentage of people. With this, I don’t mean to refer to people who live below the poverty line and can’t afford a baseline lower-middle-class lifestyle without using credit cards to cover some items, and I’m leaving student loans out of it. I don’t think that people deserve to live in shacks and eat bread and water if they happen to make minimum wage. I just don’t think that there is a great defense for knowingly living beyond your means by using credit cards, despite predatory lending.

NoReally (#45)

The laying the blame part, that’s like being an addict who hasn’t been to any meetings yet.

jake70 (#1,867)

Why don’t you just try to grow your balls back?

“Where once my goal was to quit drinking by the time I was 30 (a goal I eventually achieved more or less on time)”

Sure, binging like a teenager on a regular basis is pretty pathetic, but why would you vow to quit drinking by 30? Sad.

And for fuck’s sake, if you’re going to blame the banks for your credit woes, at least man up and stick it to them. Tell them to fuck off, live without credit and unplug for 7 years, and come out clean—or, just write whinging articles like this one.

DebtOrAlive (#5,233)

@jake70 Why don’t you just try to not debt/addiction shame people?

As in, really, what purpose does that serve other than to make yourself feel better about your (likely tenuous) financial situation? The Billfold is one of the few places I break Internet Rule #1 (Never, EVER, read the comments section.) because the members are almost always thoughtful and empathetic.

If you need a template, see Ellie’s comment/criticism above, which I completely agree with but is written not to shame or browbeat Jake. Please don’t ruin it for the rest of us (Read: Me).

@jake70 haha, wow, you suck. No reason for me to elaborate on this.

Glasses (#5,573)

Eh, I think that (a) lending practices are irrelevant to this situation and (b) some commenters are being too harsh.  

The 90s were full of optimism and prosperity.  The uber-super-achievers who came of age then believed that we could do anything we put our minds to.  Many of us knew that we could likely succeed at almost any path we tried.  The future was wide open and greatness was assumed.  Yes, this is privilege.  But it could also be crippling.  I look at us now and see a cohort of young people where a disproportionate number really struggle (or have struggled in the past) with some type of self-handicapping, perhaps stemming from a sense of being paralyzed by our own future possibilities.  Anxiety, depression, substance abuse, overspending, etc.  When you spend your childhood being told by your teachers and pretty much your whole community that you are brilliant, you end up feeling like everyone expects you to grow up and be a brain surgeon/astronaut/rock star.  If any of that is relevant to Mr. Mohan, he ought to be gentle with himself.  He’s not the only one.  “Giftedness” is not always a gift. 

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