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Former 'credit junkie' Beverly Harzog comes clean

For 7 years she spent recklessly, until checks started bouncing

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Beverly Harzog: budget and debt authority, personal finance author, and ... reformed plastic addict? Yes, that's right. The woman who has appeared in many major media outlets, including Fox News, CNN and The Wall Street Journal, talking about good personal finance practices once had a very bad habit indeed.

Like many of the people she helps today, Harzog loved shopping (footwear, especially), but the paying part was not quite so appealing. So she charged desired items and ignored the growing balances. The unpaid bills piled up. Until, that is, she was cut off and the phone began to ring. And ring. Eventually Harzog had to not just face but end her dependency on plastic.

Beverly Harzog, author,
'Confessions of a Credit Junkie'
Former 'credit junkie' Beverly Harzog comes clean
Confessions of a Credit Junkie: Everything You Need to Know to Avoid the Mistakes I Made

For the first 7 years of her career, Beverly Harzog went on a spending spree that only ended with the embarrassment of her favorite retail credit card being canceled for nonpayment. To this day, she doesn't know exactly how much she owed, but her fear catapulted her to become debt-free in two years. In her new book, Harzog chronicles common credit mistakes and how to take command of your credit life.

As author of the new book, "Confessions of a Credit Junkie: Everything You Need to Know to Avoid the Mistakes I Made," Harzog reveals her highly personal struggles -- then offers her best tips on how to borrow beautifully.

Q: Who doesn't love a good confession? So salacious! We especially love it when an expert makes mistakes. Why do you think that is?

A: I think it makes people feel better with their own mistakes. Before the book, I wrote an article about my credit confessions. I was getting so many emails from people thanking me. They told me that it made them feel less alone. Here I was, online and doing TV interviews about it, and they said that made them feel like not a loser. When I was in debt, I did feel like a loser.

This can happen to anyone, even if you have your act together. When I was going through this, I was not on the Internet -- it predated that. It's so great that people have these venues now. I kept it to myself. My friends and family didn't know. When I got engaged, my husband didn't even know.

Debt shatters your confidence. You feel like your drowning. The popularity of blogging confessions and experiences has helped people.

Q: You also use the hot button word "junkie" in your book's title. An interesting choice.

A: This describes what I went through, though. I spent way too much money on power lunches, designer clothes and shoes. There was a point I went on a cruise, and I had just pennies in my savings account. I had a credit addiction.

I had to hit rock bottom before I could stop myself. I was maxed out on everything, but I didn't even know how bad it all was because I was not reading my mail.

Q: So what was your moment of truth?

A: The day I went to use my card at Rich's, a department store [that is now Macy's]. I was trying to buy Ralph Lauren jeans, and my card was denied. I had a really bad day and wanted those jeans! I didn't make a scene, but called Rich's and they said, "Ma'am, we're cutting you off."

I realized that my life had gotten out of control. That card had been a symbol of freedom because it was my first card. When they took it away, it made me realize how far I had dropped.

Q: Was it hard for you to open up about your debt and charging addiction?

A: I wanted to come clean, but after I wrote the article, I couldn't sleep. Then when I got the emails from people, I knew it was good. It was right. And I knew it would be a book. So I spent a long time on the proposal, and even checked with my kids and husband because I was going to come clean.

There are still times when I feel uncomfortable. It was a very difficult time. I just thought I was in a unique position, and when I found out I wasn't, I was relieved. I wish that when I was younger and going though it that I knew I wasn't alone.

Once I maxed out my cards, I was getting calls from debt collectors. So I would screen my calls, wouldn't open my mail. I was constantly lying to myself.

You have to forgive yourself. We're not born knowing this stuff. It's understandable that people make these mistakes.

Q: In your book you describe 10 ways you mishandled your credit. All are common and destructive, but a couple are particularly toxic. Like No. 4: "Not knowing how much I spent or where I spent it."

A: Yes, it's a disconnect with credit. With money, you know when it's gone. With plastic, it feels free. If you're not tracking your spending, your budget doesn't matter.

You have to keep track though, and there are so many ways now.  I encourage people to use tracking software. I use Mint. But get online and check out the different tools to see what works for you. These days there are so many.

Q: And then there's the ever-popular mistake of No. 8: "Ignoring debt and hoping it would magically go away."

A: That's denial. I took that to new heights! Once I maxed out my cards, I was getting calls from debt collectors. So I would screen my calls, wouldn't open my mail. I was constantly lying to myself.

Q: What happened when you stopped running from your problems?

A: When I finally faced it, I couldn't make my minimum payments and was scared to death. So I sent partial payments for good faith -- as much as I could. Then I started reading everything that I could possibly find about personal finance. I had an accounting degree, but that's very different from personal finance. When I learned, I got strength.

You do what you need to do.  As long as you're making progress, great. Make sacrifices. I ate a lot of peanut butter sandwiches while I was paying off my debt! I became very resourceful. And every time I cut back, I made bigger payments.

Q: A pervasive attitude about credit cards is that people deserve them. What do you think about this perspective?

A: You have to earn the right to have a credit card. But deserve them? While I do think it's a good thing to have a card for emergencies as a backup plan, you have to first have an emergency fund. The card is a backup to that. Credit in the wrong hands is very dangerous! I'm a perfect example. I make money from my cards now. I travel at deep discounts. But I learned the hard way.

When I hit rock bottom it helped that I was scared senseless. When I was able to go three or four months without falling off the shopping wagon, I knew I was on the right path.

Q: Do you think Americans have reached a turning point with over borrowing?

A: I'm an eternal optimist. I do think we've turned a corner, but we have a long way to go before this country is financially literate.

We are finally talking about money and credit more. So many people went through such difficult economic times in the past few years, and we are all beginning to really know how important good credit is. For example, credit scores -- we didn't talk about them years ago, and now we do. all the time! It's good news. We're more realistic about taking care of our own personal finances.

Q: Now that you're clean and sober, do you ever have any residual urges to charge what you can't afford?

A: Oh, recently I saw a pair of boots in such a beautiful cognac color -- I'm a shoe lover! -- but I didn't get them. They were hundreds of dollars. I could have put them on the card but I didn't.

So, yes, I have urges. I'm human! But now I can walk away. I leave. By the time I get to my car, I'm fine. I just have to take myself out of that situation. I don't make impulse purchases anymore.

When I hit rock bottom it helped that I was scared senseless. When I was able to go three or four months without falling off the shopping wagon, I knew I was on the right path. Also, when I was paying down my debt, I got so happy. I felt lighter! I didn't want to ruin that feeling.

You have to develop new and better habits. It doesn't take long. A few months, even. When you do, it becomes the new normal.

See related: Credit card addiction: How to break the spending cycleHome-shopping channel addiction: A fast path to credit card debt

Published: December 16, 2013


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