First, I admit I was stupid!
I'm 24 years old now, new to the forum and new to the U.S. (has been almost 7 years). My parents back in Hongkong has a decent income (approximately 2-3M USD annually), that's why they can afford me to study oversea when I was 17. When I first came to the States, I uses cash for everthing until I had my first bank account opened few days later with BoA and had my debit card. When I was in college, I do not have a SSN, so I don't have any credit card, and my parents were offering me about 40k for living expenses, so my life is quite easy when I was in college. However, after I graduated 2.5 years ago and got my first job at a construction company, my parents cut me off! And my father save a 500k USD fund in HSBC, but I'm not authorized to touch it until I turn into 30s. I was earning 55k at the first year of my job, the first couple of months were fairly OK due to I still paying cash and filing all my SSN stuff. At this time, I have ZERO debt.
At that point, I am pretty sure I live a good life above the average, and have half million waiting for me. However, I almost end up screw my life after I got my first Chase Freedom. I got 100USD statement credit when I spent some money in 3 months. Then I thought I may "earn" some money by applying CC and get signin bonus. Then, the second, third, forth, fifth, sixth, and so on. In one year, I end up with 17 CCs and a Paypel Credit account. I don't really familiar how the credit card business works, so most of time, I just pay the minimal amount due to no interest for the first year, not due to I can't afford full payment. Later on, I just signup for autopay for minimal amout for all my accounts and never login again. Until two weeks ago, the friend, who recommended me to sign up more CCs to earn more, was brought to the court by Amex due to 96k unpaid debt. I was really scared, and I just read more about CC terms and I was shocked. Then I pull out a calculator out of my bag and login all my CC accounts and calculate how much I owe them. I was carring overall almost 130k plus a lot joking interests. I felt I was only one step away from my friend. I was trying to figure out a way to payoff all my debt at once in the next two days. I have about over 40k saved during college that I only used for emergency event (eg. last time I used it was becasue my dog broke her leg and I pulled out 4k for her surgery). I also have about 50k stock investment, which I cashed out at the secound day I found out I might in trouble. Finally, I got all my cash in hand, which is 90k. I'm still missing 40k!!!! I'm good at math and I calculated that I will take me about two (If I cut all my expenses) to five years to pay it off by my current income. I had no hope, then I called my parents and told them the entire story. My parents were aggree to bail me out of that 40k hole, but they said if this happened again, they gonna just sit and watch how I screw up myself. After then, I just use cash for everything and throw away all my cc so I wont use them. I have concluded why I was gotten into this situation and how I walked away from it.
How I screw myself:
1. I was stupid, very stupid, like an idiot. I start to use something that I don't know the cost of.
2. I had a friend that has bad financial concept, I opened up so many cards and use them on a daily basis.
3. I setup autopay for minimal payment, and never look back again.
How I fixed it
1. I had emergency funds, this is really helpful
2. I had some investments, although I loss some money when I cashed out my stock
3. My parents had the ability to help and they are willing to help.
Final word: I would say I will never use credit card again if I don't have too (like booking flight online), I do not need to save money by spending more.
