Credit Cards Hurt My Credit | Payday Loans Gave Balance

Running From My Credit Card Nightmare

Credit cards wiped me out...

I’ll be honest with you. My history with credit cards was nothing to write home about. In fact, it was downright scary.

I’d been irresponsible. When I was young, I thought that money was easy to come by, as my parents seemed able to buy me most anything I wanted. All I had to do was put on the right sad face, pout and scream. Sometimes I wish I could go back and do my childhood all over again, if for no other reason than to give my parents a break.

Didn’t they teach me the right things?

OK, you may be thinking that my parents didn’t set proper boundaries for me or establish firm guidelines for behavior. You’d be right.
Once I reached college and was in a position to begin establishing my own credit, I took the reins with furious glee… and promptly drove my financial wagon off a cliff. A clean credit report was the last thing on my mind.

It seemed so easy. Credit applications covered campus like flood waters. In my bookstore bag, at the cafeteria, in the mail, left on my doorknob – everywhere. I saw friends buy snowboards, new clothes, video games and grub at the local taco shop anytime they needed it.

Just whip out the plastic. So simple, yet so dangerous.

What I didn’t realize is that compound interest compounds very quickly. A few trips for food, a few more for fresh threads and one late credit card payment quickly amount to a very large bill. I needed credit fixing, and I needed it bad. Payday loans helped me when I was in dire straits, but I needed a complete financial makeover if I was going to avoid this happening again.

So I changed my ways. I avoided binge spending and worked hard to make my payments and patch things up with my creditors. Once I showed them that I would use my credit responsibly and make all of my payments on time, my credit report history was on the way back up.

What to do with those cards…

Once I had my cards paid off, a thought crossed my mind: would I keep all of them? I didn’t really need as many credit cards as I had, but I didn’t want to damage the credit I’d worked so hard to rebuild after my brush with the bill collector grind house.

Here’s what I found out via Fair Isaac, the company behind credit scores. If you’ve had a card for a long time, it carries more weight. Luckily, that wasn’t the case with me. Secondly, how much of the total available credit you’re using is important. I had two credit cards with $1,000 total credit. One card was paid off, while the other carried a $300 balance.

I held on to one

OK, I fibbed, I still use that card after paying things off. Since I have a handle on how to repair credit now, I’m comfortable with that.

Anyway, I figured it would be safe to cancel the card I’d paid off. I’d been told that it wouldn’t damage my score, but it also wouldn’t raise it. However, by canceling that card, I’d still have a $300 balance, but my total credit line would be only $500. Thus, I’d be exceeding the 30 percent limit and damaging my overall credit score.

Thus, I didn’t cancel the paid off card. My plan is to keep things under control and use both cards to build my credit score. My credit check is thankful for it! And remember how I told you I got payday loans to help when things were at their worst? You can do it to, if you need!

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