The Debt Trap


So how did I manage to get into $31458.13 worth of debt?

Was it just one large stupid mistake of getting a big car loan? Do I have some new swanky Holden Captiva in the carport? Well no, it was a series of tiny little mistakes that ended up being one big fat fuck up.

As I was writing this blog and collating the information for the timeline I just couldn’t believe how naïve and quite frankly how stupid I was. I’m saying to myself “oh god Elli did you really do this!?” And the answer is yes, yes I did do this, over and over again.

I’ve broken down each debt in the timeline of how it occurred. I will apologise in advance for the length of the blog post, and I don't expect many, if any to get through the whole thing however I thought it was imperative that I explain exactly how I got caught up in the nasty world of debt.

The sad thing is I started out with genuinely good  intentions, I believed   I was doing the right thing by getting a good ‘credit rating’


So here it is, me and my dirty laundry…




Personal Loan – For a Car

At the ripe age of 18 I was in the market for a new car. I had initially done the responsible thing and bought a cheap car with my own money from a friend, but the car ended up being so well, fucked  that I had to sell it for scrap metal after one week. Lesson one, never buy cars from friends.

So with this in mind and the fact that I now had NO money and had sold everything I could in a local market trying to gather enough money to fix the hunk of shit my friend sold me I entertained the thought of getting a loan.

I could get one from my trusty old bank. I remember going into the bank and  stating I would like to take out a personal loan for 2 years. I believe the minimum amount was $5000.  I was told I would be better off taking it out for 5 years, just in case something

[caption id="attachment_161" align="alignright" width="296"] Don't mind my friend doing some modelling[/caption]

happened with my job or health  it would therefore allow me a longer time to pay it with a smaller amount. I was persuaded into taking the longer contract.

Lesson two – don’t listen to the lady at the bank. She is employed to talk you into making your shitty decision, even shittier.

So I took out the $5000 loan and found myself a nice little Mitsubishi Lancer. The lancer was $3000 but I wanted to have the bumper and lights covers colour matched too so that was $500, then another $500 on stamp duty and registration and the other $1000 just magically disappeared in a short period of time. This should have been my first warning towards the horrible debt trap.


My First Credit Card

I was now 19 years old and  knew  the ways of the world, so much so that I “knew” that I needed  a credit card to get a good credit rating. Now buying a house was never on  my mind, that goal seemed way too ludicrous and unachievable however I still convinced myself that a credit card was going to benefit my life.

I jumped on my trusty banks website and picked the credit card with no annual fees and a 55 day interest free period. I picked a $500 limit as I knew that I could get this amount paid off every 55 days, after all, I was being responsible.

I remember the day the card  arrived in the mail, I was so excited yet so scared it was this great feeling of now being a REAL adult. Do you truly become an adult until you have gotten a credit card. (kids the answer is yes, do not get a credit card!)

I activated my card and went around to my local Coles and bought some food for a total of $18. I remember being so scared that the card wouldn’t work. Soon enough I was passed a  docket and  had to sign my name. Oh god it worked, I felt so superior as my pen glided over the paper which made my signature.

I went home and immediately logged into my bank and transferred the same amount of money from my savings to my credit card to ensure that it was paid. If only I had kept up that momentum. I often wonder if people do the same thing to begin with and then slowly spiral out of control. Or do they see the opportunity to spend big and go crazy and max out the card immediately – if you have a story please tell me about it in the comments below!

I kept this credit card in check and never paid any interest on it, other than the fact I was building ‘a good credit rating’ the card was rendered pointless as I always had the money in my savings account and more often than not would transfer immediately, If only everything stayed this way, or even better that I knew that I didn’t HAVE to have a credit card and a good credit rating.


The Interest Free Card  Cards

The next thing I decided to put on my credit rating was a neat new laptop. I was sick of having to share a computer with mum, as was she having to share the computer with me. I had seen the big in your face ads on the TV for 24 months interest free at Harvey Norman. It was almost too good to be true.

Now my mother had always told me to read the fine print and if an offer seems too good to be true it usually is. Turns out the interest free is not actually that bad at all, providing you stick to paying it off before the promotional period ends. The purchase itself is interest free during the promotional period but you are slugged with a monthly account keeping fee and heaven forbid if you don’t get it paid in time you will be slugged with a 27% interest for the ENTIRE duration of the loan.

I walked into Harvey Norman with 100 points of ID, signed a few forms and walked out with a brand spanking new laptop. I remember as I was walking out the store I couldn’t believe that I had not given a cent of money yet they had just handed over this awesome expensive laptop. I also remember being vigilant with this and calling the interest free company to find out the payment options which they assured me  they would send in the mail. I couldn’t understand why they weren’t able to give me the information over the phone. They took a good few weeks to send this out, which was a concern as I didn’t want to miss any payments. Looking back now it almost seems like a strategy - perhaps people lose interest in making the payments, or maybe I should just go back and put my alfoil hat back on.

Again I was really responsible with this debt and  calculated the total monthly fee’s  to the cost of the item, divided it by the promotional period less a few months to ensure it was all paid off in time.

Approximately 6 months later I moved into my boyfriend’s dads house and we decided that it would be REALLY cool to have a big TV in our room and we could spend nights watching TV and movies together. We would save SOOO much money as we would be happy to cuddle up in bed rather than spend money being out.  We went out to Truscott Hifi and looked at all the TV’s. We started off with a 17” TV but then for just a bit extra you could get the next size up and so on and so forth. Soon enough we had settled on a 42” TV and a full surround sound speaker set up, because you know, we had to make the most out of all these movie nights we were going to have.

I said that I had an interest free card but didn’t have it on me, soon enough without realising I was now signed up to a new interest free card. I know, how did I not realise!? Well… I actually thought they were finding the details for my other card. So when I received the extra card in the mail I was pretty shocked, but never the less I now had TWO interest free cards.


The award points credit card

“I’m getting a new kettle with my award points”

“You’re what “ I asked

“My award points, from my credit card” said Jae

AWARD POINTS – what the hell is this. A girl at work was telling me about the purchase she had made with award points off her credit card. Points!!! You mean I could earn money whilst spending it – hell freaking yeah.

I looked into my credit card and realised that I did not have an award card and to get one I would need to change the card and would be up for an annual fee.

Oh, but the beauty is you can pay for your annual fee WITH your award points AND get shiny new items for the house. The work colleague assured me that I’ll end up accumulating enough points to cover my annual fee. So click click click and I had ordered my first awards points card. Soon enough it arrived, the crisp envelope was in the letterbox and you could feel the card in the envelope, wait it was two cards. One was a standard credit card and the other was an Amex, I did the responsible thing and cut up the Amex immediately. I sat down to read the letter that came from the bank and almost died when I saw the credit limit. When I had requested the card it hadn’t asked for a limit and I naively assumed that it would be the same limit as my current card…..

The bank gave me an $8000 limit. I could not believe it as I huffed and puffed under my breath about this is how people get into trouble with debt. I had no idea that I was huffing and puffing about my pending future. I had every intention of reducing the limit and I swear that is the truth, I have no reason to lie to you. I whole heartedly believed that I was going to reduce that limit back to the $500. I remember telling people how ludicrous the bank was. Weeks went by and I had somehow gone over the $500 limit. Soon enough I was $1000’s in debt and I don’t even know how it happened.


Beacause one loan personal wasn’t good enough let’s make it two

My car was turning out to be a hunk of crap and that’s because I literally NEVER had it serviced, ever ever ever. I sold my car however I still had

[caption id="attachment_169" align="alignright" width="241"] The Corolla that I bought to replace the Lancer[/caption]

money owing on my previous personal (car) loan so I took out ANOTHER $5000 loan to buy another car and pay out my previous loan. Things were rocky with the boyfriend and by this stage we were living in the home that he owned with his mum. My bills were minimal as I just paid for the actual bills while he paid the mortgage so I was getting a pretty sweet deal. We didn’t want to break up but living together was not working. We decided that we would stay together but I would move out. I remember the first rental I looked at was $180 per week. I walked in, held back tears and walked straight back out. To me, it was going to be worth paying the extra money for a nicer place. I ended up finding this uber cute arty apartment close to the beach for $250 a week. So $500 a fortnight which was a third of my income. That paired up with a personal loan and crippling credit card I was really starting to feel the tight grip of these financial decisions. I needed a roommate to split costs.



My boyfriend decided to go to Europe, I couldn't afford to as I was now paying rent, a personal loan and the crippling credit card. I thankfully still somehow had the mentality that you don’t get loans for holidays. I was devastated because he still decided to go and it broke my little heart into pieces. So I did what any Scorpio would do and plotted a revenge

[caption id="attachment_145" align="alignleft" width="254"] Jess and I waiting to board for my first overseas holiday[/caption]

holiday with my best friend. We decided to go to Bali. This was going to be my first overseas holiday and I was so excited. But I had all this debt. The big hefty credit card bill along with my new personal loan for my existing loan and replacement car.  I remember telling Jess ‘look I can afford to save to go to Bali if I can get a … BALANCE TRANSFER of this credit card because it is killing me with interest, there was no way I was making my money back with points, I was paying a high premium for those points with all the interest I was paying. I went to a different bank and organised a balance transfer, however due to the credit card balance being so big they could only do a partial amount. 

Then I went to another bank and fought my way to get another balance transfer approved  as I was initially declined by them but the guy really fought for me and got another balance transfer for the remaining amount. Life was good. I was getting myself back on track. With 2 credit

[caption id="attachment_143" align="alignleft" width="293"] We were quick to make friends during our time abroad[/caption]

cards on a 0% interest rate wooo hoo. I really thought this would be ‘new mindset new life’ and that I would soon get myself out of debt. I called Jess back and told her we could book Bali as I could now afford to save for the holiday.



I reduced my CBA card from $8000 to $2000, you know just in case. I was then able to put my flights and accommodation onto my freshly cleared CBA card.

I did actually save the spending money for this holiday and not use the credit card but it was at a sacrifice of not paying off my debts..





I had been paying off the 2 balance transfers, my personal loan and the credit card I had freshly maxxed out. I really felt like I was drowning in debt. I finally got one of the balance transfer cards paid off but my second card was now incurring interest so I did ANOTHER balance transfer to ANOTHER bank with a 0% card.


The consolidation loan with a little extra

I was adamant that I was going to get myself out of debt this time. I just had to consolidate everything into one. That was the way to do it. So I applied for a few loans from various banks and was denied, though finally one came through. I took out a 10k loan to cover my debts and there was 1 – 2 thousand left over for just in case, seriously by now you would think that I was going to learn my lesson. I paid out the two balance transfer cards and my initial credit card. Again I didn’t cancel the initial card but put it aside. I paid out the initial balance transfer card, but stupidly did not cancel it and held onto it for an emergency


The car and consolidation loan

[caption id="attachment_183" align="alignleft" width="275"] The new car - Suzuki Swift[/caption]

So my car turned to shit again, I was having issues with the battery not holding power and no it was not the alternator. I was having to lug my battery up 3 flights of stairs every time I got home and charge it and then take it back down when I wanted to drive somewhere, looking back on it now this is the best anti-theft device.  I applied for a car loan through, you guessed it another bank which also consolidated my other personal loan. You see I was becoming quite the bank whore!


Shortly after my return from Bali, Sam and I broke up. We both wanted different things

in life. Being single in an apartment with no one else was really testing me and I was simply becoming lonely. I had an awesome new group of friends but I wasn’t able to entertain anyone in my tiny apartment. One day I saw a girl posting about Fit Angels and I was intrigued. This was a group of girls that did body building and competed in fitness comps. I’d wanted to learn how to use weights and this was perfect for me. I started a chat with the girl who posted it and soon enough I had forked out $600 for this package. This girl was looking to move into a house and find house mates and I was lonely as hell because my housemate was FIFO and spent his time back home at his girlfriends.

My housemate was keen to move to a bigger house, god knows why considering he was basically paying solely for storage but we were soon all moving in together to a house with a pool!  Rent was slightly more at $165 a week but I was going to have so much more quality of life so it was worth it to me.


The Emergency Credit Card

So the house with the pool and amazing house mates did not work out. My awesome roomie had bailed early on and things went to shit in the household.

I had started dating again however were still very early days, and just to confuse the hell out of you his name is also Sam, so I’m sorry in advance for any confusion.  As it was still very early days and I couldn’t bear to share a house with anyone I decided to get a place on my own and somehow managed to secure a little underground apartment by the beach for $180 a week.

I was making repayments on all my debt with no real reduction in that debt.  I  had the mentality that if I keep putting money on my credit cards it was better than not using them and paying off a smaller amount.

I was ‘good’ and hadn’t touched the emergency because it was there for emergencies…

Then I  discovered Muscle Sorority and I REALLLLY wanted to do it. Muscle Sorority was similar to Fit Angels but it was more ‘team orientated’  it would change my life blah blah blah. I calculated the fees alone would be $700, there was no way I could afford this. I

[caption id="attachment_140" align="alignleft" width="380"] The Muscle Sorority team[/caption]

had to pay rent, gas, electricity, my car loan, my interest free cards and my credit card. BUT I had the EMERGENCY Credit card and I could just get the fees to direct debit from there and I would pay what I could off and then pay it off afterwards.

Soon enough I was signed up and had  provided my credit card details for the direct debits. The cost of Muscle Sorority did not stop there, soon enough I was having to

[caption id="attachment_157" align="alignright" width="283"] A training session at Muscle Sorority[/caption]

buy special foods (think protein, quinoa, protein bars etc) and pay for personal training sessions on top of this. As soon as I made that first payment it was a downward spiral, soon enough my “emergencies only” credit card was now completely maxxed out. Not only was it maxxed out but I continued to increase the limit, $1000 at a time, until it had reached $7000. I remember one time I was sure that I had JUST increased the limit only a few weeks before but it was already gone.

I would love to say that Sam and I were going strong but the reality was we were up and down like a hookers knickers.  Sam had asked me to move in and my lease renewal was coming up. I was really adamant on giving this 110% so I said yes and moved in. I sold and gave away all my belongings and moved in with what was left. I was now down to paying $100 a week rent however my quarterly electricity bill skyrocketed from $180  to $800.


The Overdraft

Flights to Bali were super cheap so Sam and I booked a spontaneous trip.  Despite booking WELL in advance neither of us saved anything for the trip. Someone suggested that I get an overdraft on my account for ‘just in case’. I was hesitant but thought what other options did I have.

I managed to save some dollars before the trip and not actually cut into the overdraft HALLELUJAH!


After returning from the holiday I didn’t bother having the overdraft removed from my account. I’d managed to never dip into it and then one day it happened and as like drinking beer and breaking the seal I had now broken the seal on my overdraft and soon enough you guessed it that was maxed out too. Despite the overdraft being one of the smaller debts that I had taken out it was most definitely the worst. This is the biggest trap to get in. Before at least my wages would go into one account and I would transfer out. Now my wages were going straight onto this overdraft debt and I just could not climb out of it. I felt as though I was at the bottom of a well and unable to gain any traction to get out.


So now you’re completely up to speed with how I managed to completely obliterate my credit rating over the course of 9 years!

In my next post I’m going to tell you how I made the first steps to getting out of this shit storm and how easy it can be for you to get started on your path to financial freedom

Thanks for reading,