Credit cards are great right? When you see something you need, you can have it. No need to wait – if you don’t have the cash that’s fine!

Buy now, pay later. Except some of us don’t pay later. And that’s when a credit card can turn into a major money leak.

For many years I had an embarrassing secret. I had an unpaid balance on my credit card, and I was paying interest on it. Every year, the unpaid balance would get a little bit larger – and eventually I had multiple credit cards, with multiple unpaid balances rolling over, earning interest, month to month.

I hadn’t accumulated the debt because I was broke – in fact I had a reasonably high salary, working in IT. But this actually made things WORSE. Because I knew that I could become debt free in a relatively short period of time, the debt never worried me too much.

I can now see that reason I had this credit card debt was because I had really poor financial habits. I was a spender, not a saver. I liked to ‘live in the now’ and was quite impulsive with my spending decisions.

These are the mistakes I made that caused my credit card to become a major money leak:

I had a budget, but it was too basic

Sure, I’d plan for the basics – the rent and bills would always get paid – but my spending on non-essential items wasn’t budgeted. It was totally unplanned, so this was when the credit card would be used.

I wasn’t in the habit of saving

I had never really learned how to save money – or learned what happened to money when you saved it. Compound interest was a concept I didn’t learn about until I was almost 40! I know…

I had never bothered to educate myself about money

I could easily sit here and blame my parents – wasn’t it their responsibility to teach me how to manage my money? Or I could blame my teachers – isn’t school supposed to teach you everything you need to know about life – including money?

Sure, that would have helped. But I’ve been an adult for ah, a few years now, and I had a choice to educate myself, in the absence of a decent financial education. For many years I chose not to – it was ‘too hard’ or ‘did my head in’. Silly excuses that costed me in the end.

I framed credit cards wrongly from the beginning

This is the worst one. I thought that having a credit card was a badge of adulthood. A gold card was even better! Ah, such a status symbol! Again, I know…

Thankfully – yes, there is a happy ending here! – I’ve since turned the tables on this money leak. A few years back I chose to cut up all of my credit cards and store cards. I consolidated their balances onto a personal loan, which is the only debt I have now, and it’s shrinking quickly.

But I also put a number of strategies in place to help me stay credit-card free. Here are just a few:

  • Keeping a comprehensive budget that forecasts more than a year into the future
  • Tracking my actual spending until I truly understood where my money was going
  • Implementing a ‘clutter to cash’ cycle (which even helped me to start a business)
  • Having short-term savings, long-term savings, an emergency fund and investments – oh how things have changed!
  • Reading personal finance books, blogs and websites… and I enjoy them!
  • Getting schooled on consumerism. Once I understood what it was, and how it was driving my spending decisions and habits, it was immensely easier to make better decisions.

This spender is now a saver!

If you’re struggling with credit card debt, Sorted has some excellent guides to get you started:


Peti Morgan is a mum of one from Wellington, who runs the blog The Leveraged Mama, where she shares tips and strategies to earn more and spend less in motherhood-friendly ways. Peti is passionate about helping mums and families struggling with debt to find financial freedom without having to work full time.



Comments (6)

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9:45am | 8 Jun 2021

Looks like Candice now understands financial saving

Gravatar for White Colored Ragnir

White Colored Ragnir

1:11pm | 12 Nov 2018

Sailing sailing Jumping off the Railing! Drinking Drinking and the Ship is Sinking!

Gravatar for Melissa


6:34pm | 6 Nov 2018

Great tips! I'm not quite on top of my credit card debt so working on that now. I think tracking where the money is going is the key thing I need to do!

Gravatar for DM


5:01pm | 6 Nov 2018

So true on credit cards being status symbols or badge of honour. It's like an act of rebellion to not have one.

Gravatar for CH


9:51pm | 2 Nov 2018

Great article! Thanks for openly sharing your experiences - a number of your points very much resonate with me! I got my first credit card at the age of 17 when I went overseas as an exchange student as a way for me to pay for things I needed overseas and my parents to pay the bill each month. That worked well. It was once I came back home to NZ and kept the credit card that it started leaking money as you say. I had tried to cancel it, but the bank had 'advised' me to keep it open as it would be much harder for me to get another credit card as a student should I want to in the future so 'best' to keep this one I already had!... My credit card story then followed a very similar route to yours, and I buried my head in the sand for a long time about it and didn't bother to educate myself fully about money either. I am proud to say though now I am credit card debt free, and while I still have a credit card it is only used for ease of paying for things, and is paid off in full each month.

Gravatar for Janine


5:11pm | 2 Nov 2018

I cut up our credit card about a year ago and it was the best thing we ever did. We have a rainy day fund now instead which we (try) to keep at a minimum amount. I'm keen to check out some of the calculators and things on here too now to keep us motivated to reduce our mortgage debt. Great article thanks for sharing so honestly, it seems like this is a hidden topic that is not talked about enough. YOu've nailed it!