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3 true credit card horror stories and advice on how to survive

Real people share their real scary credit card experiences from 2020.

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woman looking very stressed at a cafe holding a credit card at a laptop

By Allan Givens,It’s that scary time of year again, maybe more so now with the pandemic still looming. While COVID-19 might be the scariest monster of 2020 the grim presence of financial hardships was definitely still felt. Unemployment hit new records, many businesses had to shut down, and fraud and identity theft were up 20.1% in the first quarter of 2020 with cases of credit card fraud front and center.

We asked a few people to share their financial frights and credit card horror stories of 2020. Now prepare to be scared and educated.

Rebecca Lake headshot
Rebecca Lake
Personal finance expert and blogger, Boss Single Mama

Credit Card Couple Catastrophe

My worst experience with credit cards was a mess of my own making. After getting married, I added my then-husband to several of my credit card accounts as an authorized user. We’d never talked about our credit scores in detail. I only knew he didn’t have great credit so I thought allowing him to use my cards could help him build credit while also making it easier to manage our joint finances.

Fast-forward just a few months later and the balances on those cards had quickly ballooned to more than $30,000 in largely frivolous purchases. My first mistake was not talking about money with my spouse beforehand; my second was adding him to my cards without laying down some ground rules about how they could be used. I got to keep the debt as a parting gift when the marriage ended, and it took me years to pay it all off and get my credit back in shape. The lesson? First, communication about credit and money is everything in marriage. And second, don’t take adding someone to your credit card as an authorized user lightly because you could end up with a huge pile of debt you hadn’t planned on”.

Russ Nauta headshot
Russ Nauta
Owner, CreditCardReviews.com

Credit Card Conundrum

“Several years ago, before banking apps were around, I made a phone payment on a business credit card using the wrong bank account which couldn’t cover the payment. I realized my error almost immediately and called customer service to try to cancel the payment and switch the account. Unfortunately, there was nothing they could do so I decided to wait until the payment was unsuccessful and then pay it with the correct account. Wrong decision.

What I didn’t know was that the credit card company’s system would continue to try to make the withdrawal multiple times if denied initially. The ensuing details were quite unpleasant and resulted in hundreds of dollars in overdraft fees, a negative six-figure balance in my personal account, and hours of time sitting in my local branch with customer service trying to explain what happened.

Fortunately, the account I intended to pay the card balance with was with the same bank so they were somewhat sympathetic, but I was stuck paying some of the fees. Needless to say, after that fiasco, I always make sure that I am both paying credit cards with the proper account and that there are sufficient funds to cover the payment.”

Jennifer Buchholtz headshot
Jennifer Buchholtz
Client, Freedom Debt Relief

The Debt Demon

“My husband and I have been married for nine years. Shortly after we got married, I lost my job. He was making $10 an hour. I was making $9 an hour. It was challenging because you look at some high school kids who make minimum wage who were making more than us with college degrees.

I was fortunate to get another job, but then within that same year, they downsized, and they dissolved my position, so I lost my job twice in less than a year.

For a number of years we were a single income household, as I continued to search for a new job. During that time, it was really difficult to pay our bills and things really did start to snowball. Finally, I was to get two different jobs to make up the difference. But by then we had racked up around $90,000 in debt.”

Additional insight from Michael Micheletti of Freedom Debt Relief

When you are facing a situation where debt is taking over your life, there are financial tools and services that can provide you with a clear path forward – many of these solutions do not require you to take on additional debt but directly address and reduce what you owe. Remember, it took you a number of years to get into debt and it will take some time to get out of debt. What is important to know is that you can manage your debt with discipline and the right partner.

We hope you learned some valuable information from these stories. And to not leave you with frightful financial nightmares, Finder’s very own credit cards journalist and expert, Steven Dashiell has shared his advice on choosing a secured credit card.

Steven Dashiell, credit cards expert at Finder

“Choosing a secured credit card can prove a bit trickier than choosing a standard credit card, as the most important features differ a bit from the norm. To keep things simple, consider these three big factors. The first is the security deposit – all secured credit cards require a security deposit before you can open your account. This security deposit acts as your line of credit, as well as collateral for the provider in the event that you default on your account.

The second big factor is whether the card reports to all three major credit bureaus. To ensure your credit score improves as fast as possible, you’ll want all three of the bureaus – Experian, Transunion and Equifax – to receive reports of your positive credit habits.

Finally, you’ll want to review a secured card’s fees before you take the leap. The goal of a secured card is to safely and efficiently build your credit score. Excess fees, especially uncommon fees like processing fees or activation fees, can cut into your initial available security deposit funds and make paying off your balance each month difficult.”

For media inquiries:

Allan Givens headshot

Allan Givens
Public Relations Manager
203-818-2928
allan.givens@finder.com
/in/nicole-gallina/

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Nicole Gallina
Communications Coordinator
347-677-4931
nicole.gallina@finder.com
/in/nicole-gallina/

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