The Sweet Taste of Debt
- Steve Scalici, CFP(r) Treasure Coast Financial
- 2008 21 Mar
It was a hot September day in 1991 when my life changed
forever. I was a freshman at
on my way to an 11 am class. On my way
to class, I came across some people representing Citibank credit cards. They were nicely dressed and to top it off,
they had big smiles that invited you to engage them in conversation. They were offering a free candy bar if I
would fill out an application for a credit card. I didn’t see any harm in it, especially since
I was very hungry. So, I dutifully completed
the application and chose a Kit Kat bar.
It was a good Kit Kat bar and momentarily helped me fend off the hunger
pangs I was experiencing at that time. Little did I know what that “free” Kit
Kat bar would ultimately cost.
About six weeks later, I received a plastic card with my name engraved on it; I had never felt so powerful. I caressed the raised letters slowly as I felt my name and the expiration date. “STEVEN G SCALICI 10/93.” Over the next few months I actually handled the card responsibly. But, then something happened that altered that pattern: I got a girlfriend. In an effort to impress her, I was buying dinners and gifts I couldn’t afford. Two hundred dollar purses for her and nice dinners became the norm. I was literally changed overnight. I had a credit card and I could buy anything I wanted. Try and stop me!
It wasn’t long before I maxed out the $500 limit I was granted. I remember the embarrassment of having to pay cash at a restaurant when my card was declined. Surely this was a mistake! Didn’t they read the expiration date on the card? The card was good until October, 1993 and it was only February, 1992. They explained to me that their machine said I had reached my limit. How did I spend $500? I remember being worried that there was no way I was going to be able to pay the balance off that month. But, alas, good news would arrive in the mail. I received my bill and for the first time I noticed that I wasn’t required to pay the balance in full. If I wanted to, I only had to pay $10 of my balance. Even as an 18 year old, I knew that wouldn’t be smart so I sent $250. I validated my decision when I realized that it would only cost me about $3 in interest for the month.
Unfortunately, I wasn’t a quick learner, so over the next
several years, I learned some painful, but valuable lessons about credit cards.
First of all, in the beginning, I told
myself that I could stop spending, but I quickly learned that I couldn’t. I was hooked.
And that my friend is how they get you.
I had experienced the sweet taste of spending money I didn’t have. The sweet taste of the Kit Kat bar lured me
in and the sweet taste of spending trapped me in a new world that I couldn’t find
any way out of.
Another lesson I learned was that if you pay your bill on time (even if not in full), they will increase your limit. The next step was $1,000. Then, it was $2,000. After maxing that out, they finally got smart and stopped raising my limit. But, this is and another bank sent me a credit card. I had finally arrived, hadn’t I?
To make a long story short, I graduated college with $8,000
in credit card debt and $12,000 in student loans. I owed $20,000 for an education that cost me
about $14,000 total. How did that
happen? I bought things I didn’t need,
to impress people I didn’t know, with money I didn’t have. In the end, it took me four years to pay that
debt off. Being a recent college grad,
and having such a large debt to pay off had a great impact on my financial
freedom since I had to focus all my surplus income to paying off the debt. Proverbs 22:7 says “Just as the rich rule the poor, so the borrower is servant to the
lender.” Speaking from experience,
truer words were never spoken. Ultimately,
that Kit Kat bar cost me about $8,000 in credit card expenses and
If you are reading this and thinking that you too have sold your financial freedom for a Kit Kat bar, I want to encourage you that it is not too late. When we look at our physical bodies and find we’ve eaten too many chocolate bars we go on a diet. Decide today that you’re going to go on a financial diet. When we diet we consume fewer calories than we expend. The same is true with a financial diet; you have to spend fewer dollars than you earn. You also have to exercise, and in this case, you may need to exercise restraint from impulse purchases. The good news is, you can get out of debt, but it takes hard work and the long term decision to change your financial lifestyle. Start today.
Steve Scalici is a Certified Financial PlannerTM with Treasure Coast Financial. He is co-host of God’s Money, which can be heard on the internet at