In the black community talking about credit and financial matters has been a conversation that for too long has been regarded as "personal business." If you grew up in a home like mine, credit and money management weren’t talked about at all. I learned about credit and finances by watching family members struggle to pay their bills or save to “make moves" strictly in cash. Come to think of it, the only thing I was ever taught about credit, was that it was  "a trap" designed to keep “us” in debt forever and therefore warned to stay away from it. Good credit or dare I even say, excellent credit was a myth that is only attainable if you’re rich and/or white.

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As a result, I grew up like a lot of my peers, suffering from anxiety about my credit. I assumed that I’d spend my life saving money to pay for things in cash and that good credit would never be obtainable. The alternative was to work hard enough to become rich which would then open the doors for me to “get” good credit.

 

I grew up thinking I couldn't have anything or do anything unless I had the money in my bank account to pay for it outright. But how would I ever accumulate the money to pay for the things I wanted, if by the time I saved enough for one thing, there was always a NEED for something else? A new tire, a large deposit for an apartment (because I had bad credit) or a new (used) car because my transmission went out. At 23 years old, I found myself broke, in debt, living paycheck to paycheck and I didn't even have one credit card. But let me be clear, I did dance with credit cards early in my youth, and fell right into "the trap" just like my parents told me I would!

 

Picture this, the year was 2001, two months before my Freshman year of college and I went to the mailbox only to discover a shiny new credit card from a major bank with a $500 credit limit just for me (this was back in the day when you used to randomly receive credit cards in the mail). I couldn't believe it! Some bank just graciously "gave me" a credit card right before I was set to start school. As far as I was concerned, God had answered my prayers! Now I could buy all of the things I needed for my dorm and a few things I wanted. Within 2 months I had maxed out the card and I found myself impatiently waiting for them to increase my spending limit. In the meantime, I had received another card with a $300 limit ("Thank You Lord!") and what do you know ... I maxed that one out too! While I waited for these cards to magically reload, I failed to send them the $20 minimum payment due. Because in my mind, "what was $20 going to do?" At the time, I literally thought the $20 payment was more of a suggestion. By the end of the first semester of my Freshman year I was $1,200 in debt including late fees and interest. Unbeknownst to me, I was also about to have two (additional) collections on my credit. (Did you catch the word additional? That's a story for another day.)

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I was young and naive, but on top of that, I was completely IGNORANT!

I had no idea that I needed to make at least the minimum payment on my credit cards each month and that maxing out my credit limits was a bad thing. After receiving continuous harassing calls from the credit card companies that sent me cards I never asked for, and numerous letters threatening to sue me and report me to the credit bureaus I vowed to never use credit again. More importantly, I was DONE with credit using me!

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Fast forward several years later, I was working in an industry that required me to travel and stay in hotels often. Hotel accommodations were often paid in advance and I would be reimbursed for travel and meals. However, I was still responsible for incidentals and I’ll give you one guess what they needed from me to guarantee my incidentals. Ding, Ding, Ding! You guessed it! A credit card! While some hotels let me pay on my debit card (which sometimes required a minimum $200-$500 hold until check out), others wanted $50-$100 cash to be put down (per night of my visit). Those expenses start to add up, especially for someone already strapped for cash between pay days. I had to figure out another way. I began researching credit card companies for people with bad/no credit and found that my best option was to get a secured credit card with a $500 limit that could potentially transition into an unsecured card after 12 months if I used it responsibly. I made a promise to myself that I would only use it for my work-related hotel stays and I’m proud to say that I was able to keep that promise.

 

I eventually added another $500 to the limit because I felt a credit card with a $1,000 credit limit just sounded better, and on top of that, I liked the idea of it being somewhat of a savings account. I used my secured credit card responsibly for 14 months and one day I received an email from my credit card company congratulating me on my excellent payment history and that they had not only made my card an unsecured credit card and refunded my security deposit, but they had increased my credit limit by $500! I was so happy that I wanted to see if another credit card company would approve me for an unsecured card and sure enough another bank approved me for a $750 credit card. So there I was, a professional woman in my 20's with $2,250 in credit at my disposal ...