By: Robert Hopkins
I remember the first credit decision I ever made that had some consequences. It was a good life lesson that I am able to pass on to my children and others that I come into contact with. I was 18 years old and working in Manhattan. I went to my financial institution to deposit my paycheck, and while I was there I was offered an application for a credit card. I was so excited that I did not even think about reading the information in the packet—I had no idea what I was signing up for. Of course, I probably should have consulted with my parents about it first, but I didn’t. I was approved not too long after I filled out the application.
Once I received the card, I went on a spending spree. I never gave thought to the fact that I was going to have to pay back my debt; all I was thinking about was that someone had given me what I thought was free money. Some may say I should have known better, especially with all of the guidance I had received from my parents growing up, but that was the furthest thing from my mind.
Well the day came when I received my first bill, and guess what I did? I made another bad decision and ignored it. I just put it in a drawer and never thought about it again. I continued using the card, and I eventually reached my limit. Just when I thought my “free money” days were over, I received another letter in the mail saying that I was preapproved for another card. I quickly called and was approved. In no time, I began unwisely spending again and reached the limit on the new card as well.
The collections calls soon began. They were truly eye-opening for someone who thought they had all of this real-world experience. Each time I answered the phone, someone told me that if I did not pay, I could be prosecuted or I could put my family in danger of having to pay off my debts. At the time, I had not yet talked to my parents about the trouble I had gotten myself into, so I panicked. Not once did the collections representatives offer me a way to fix the issue; rather, I kept receiving threats as to what the consequences of my actions were going to be. In one conversation, I was even told that I would never be able to purchase a car or home and would be stuck living at my parents’ home for the rest of my life.
By the time I finally began to make a plan of action, the accounts were almost ready to charge off. I was working and had no reason to not pay the bills, other than I was immature and did not understand the damage I was doing to my credit. After I finally told him what was going on, my father explained to me that I needed to make the payments I owed on these accounts. He helped me budget my finances in order to pay off both cards. The only problem was I had already hurt my credit with delinquency, plus I was only 18 and had no other revolving credit. Therefore, I did not have a way to rehabilitate the damage I had done.
This was one of my biggest life lessons. It took me a couple of years to feel confident enough to attempt applying for credit. I also always had the memories of the threatening calls sitting in the back of my mind.
What finally did help me break out of that fright was working for a credit card company. The opportunity came along when a friend of mine told me about the job. We had spoken about the importance of understanding credit, and he recommended that I apply because working there would teach me the importance of taking care of my credit and how to be responsible. He was absolutely right.
I quickly learned that building good credit is not just about making sure your payments are on time in order to avoid late fees and possible interest charges, but also ensuring that you are not maxing out your credit lines. (It’s ideal to utilize only one-third of your total credit limit.) Although the information I learned mostly pertained to credit cards, it still helped me understand how to show credit responsibility. I realized that just by following these guidelines, I could boost my credit score and get better rates on secured loans such as an auto loan or mortgage.
The one thing that still did not sit well with me was the way in which the collections departments handled their calls. I believed that there had to be a different way to work with the cardholders and not have to make them fear certain consequences. While I did not agree with the collection tactics that were being used, the employees I dealt with were following their department philosophies.
Eventually, I ended up working in a collections department for a bank, which gave me firsthand experience with the cardholders. Unfortunately, there were certain situations in which I was powerless to assist someone the way in which I wanted. To make things worse, I could relate to some of the issues they were going through, but I was unable to help them find solutions to their problems.
Some may call it fate or luck, but I started working in the VyStar collections department after I moved to Jacksonville from New York. I was aware that our members were one of the most important parts of our organization, but I quickly realized that VyStar shared the same philosophies I had when it came to collections. I have been able to work with our wonderful members and offer them multiple solutions when they are in need of assistance. The difference in collections philosophies is night and day when compared with my experience as a young adult and with my previous work experience. Now, each day I leave work, I have a sense of accomplishment in knowing that I am actually able to be a helpful resource for others—not a roadblock.
When I look back on the past and think about what I could have done differently, several things come to mind. The one that stands out the most is the fact that I should have utilized the resources that were available to me at the time. I could have sought assistance through my financial institution or even on websites that offer free credit counseling. Today, it is even easier to get support, especially through your financial institution. The Money Makeover experts at VyStar, for example, can help you pay down your debt and work with you to help increase your credit score. If I could offer advice to my younger self, I would urge myself to seek out assistance, like that offered by VyStar, in order to rectify the situation rather than run from it and make it worse.
So if you happen to find yourself in a situation that’s similar to what I experienced in my teen years, don’t be afraid or hesitant to reach out for help. If you are a VyStar member in need of guidance, call us at (904) 777-6000 or 1 (800) 445-6289. Our financial professionals are here to listen with a compassionate ear, help you get back on track, and equip you with the skills and tools you need to enjoy a healthy and happy financial life.
The content provided in this blog consists of the opinions and ideas of the author alone and should be used for informational purposes only. VyStar Credit Union disclaims any liability for decisions you make based on the information provided.