Before Sophia Amoruso founded vintage clothing company Nasty Gal, which would grow into a $100 million-plus business, she spent her teens dumpster diving and shoplifting.
“I wasn’t always stealing stuff,” she writes in her book “#GIRLBOSS.” “Sometimes I went the conventional route when I wanted something; I went into a store and, you know, paid for it.”
It was one of those occasions when she ruined her credit in one fell swoop. All it took was a $28 purchase at Victoria’s Secret, she explains:
At the register, the salesperson asked me if I wanted to sign up for a Victoria’s Secret card and I said yes. I thought I was signing up for a rewards program, where I’d earn points toward a free bra or something.
What I failed to realise at that moment was that I had unknowingly been bestowed my very first credit card. Because I moved so much, I rarely had a steady address, causing bills to miss me as I jumped from state to state.
By the time my $28 lingerie charge caught up with me, my credit was wrecked, and I had learned the hard way that you can ruin your credit in one seemingly responsible afternoon, but rebuilding it takes years.
Thanks to interest — credit cards charge an average of 15% on unpaid balances — one small purchase can end up costing you a fortune if you aren’t diligent about making your payments. In fact, charging just $100 per year and paying the minimum could cost you $2,500 in interest after ten years.
“Like my A-cup bra did for me, it is the little things that can and will wreck your credit,” Amoruso writes. “Parking tickets can end up costing you thousands of dollars and court dates. You could suddenly find the apartment of your dreams only to be denied because of that Target card you signed up for and forgot about while buying a mop, a sports bra, and mayonnaise.”
Take care of the little things, she recommends, and “you’ll be pleasantly surprised to find out that the big things often happen much more easily.”