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Unaware of Credit Card Debt, 20-Year-Old ‘Proudly’ Maxed Out Her Card; Here’s What Happened Next

"With my credit card, I maxed that out to $4,000," she says, adding that this happened as she got confused with credit debt and credit limit. 
Cover Image Source: 20-year-old proudly maxed out her card | TikTok | CalebHammerComposer
Cover Image Source: 20-year-old proudly maxed out her card | TikTok | CalebHammerComposer

Owning a credit card can be a great way to pay as it is secure, convenient, and helps build credit. Having said that, it's important to understand how the system works before jumping on the bandwagon. This is probably why many parents let kids use their credit cards before they own one. The following anecdote serves as a reminder of how important financial education is. Twenty-year-old Rylie, went on Caleb Hammer's podcast, "Financial Audit" to discuss her unique financial situation, which is extremely unique, to say the least. A section of the podcast later went viral on TikTok. In the clip, Caleb seems baffled by whatever Rylie has to say about her initial credit card experience, and rightly so, as per the comment section.

Image Source: calebhammercomposer | TikTok
Image Source: calebhammercomposer | TikTok

In the interview, she explains that she "proudly maxed out" her credit card which was given to her by her parents. "With my credit card, I maxed that out to $4,000," she says, adding that this happened as she got confused with credit debt and credit limit. 

TikTok | .
TikTok | user3056265157

"So my parents got me a credit card and I ended up getting a maximum credit limit of $8,000. So, I could spend up to $8,000. That's what that means, right?" she asked Caleb who had his face covered with his hands, refusing to believe what she was saying.

"So I would use it and I would take my boyfriend and my friends out, and I would be like, 'I got this, I would pay for everybody, I'll spend the money, don't worry about it, it's just a credit card,'" Rylie continued. "I would pay and pay, and then I called my mom one day, and I wanted her to be proud of me, and I was like, 'Hey, I've got $4,000 credit on my credit card,' and she was like 'Oh credit limit or credit debt?'" she said.

Upon realizing what she had done, Rylie's parents took away the credit card. "My parents then took it, and they are still currently paying it off now," said Rylie.

Gravy | TikTok

A very surprised Caleb then took a look at the numbers on the paper and asked incredulously, "You didn't pay the 1000 dollars that was paid last month?" to which Rylie says, " No, they have been paying it off from the $4,000. They just basically gave up and said, 'You are not going to pay this in time.'"

Caleb, who looked extremely disappointed at this point, said, "Listen I don't want you to suffer in debt, but is this helping you, is this teaching you, I don't think so." Caleb then went on to say that he simply doesn't feel that Rylie has enough money to support herself. "Why are they funding? You make money, where is the money going if you cannot support yourself as an adult? You wanted to move out, but you have to rely on people to take care of you. I'm confused, why can't you take care of yourself?"

"My rent currently is around $1,400," Rylie says, to which Caleb again said, "You can't afford to live, you can't afford to go out." "Yes, I can," Rylie said.

@calebhammercomposer 20 Year Old Doesn’t Know What DEBT MEANS!!! 🤦‍♂️🤬 #financialaudit ♬ original sound - Caleb Hammer


Caleb then explained that Rylie cannot afford it as her current income is just $1,600, out of which she is spending more than 80% on rent. "That's not affording," Caleb says, to which Rylie simply says, "Girl Math." Caleb who was at the loss of words at this point, told her that none of this was a joke after a short pause. "Math Math, says it's about 80% of your income!" Caleb concluded. 

People in the comment section were as surprised as the podcast host. "I don't know a single person whose rent is only 30% of their income," reads one of the top comments by P_Hydro, while another user B writes, "What does she mean she goes out and donates? I’m so confused how is that making her money?"

According to a report in 2023, the average U.S. household credit card debt owed was around $20,221. This means that it's not only teenagers and young adults who are making credit card mistakes. Many are also getting into the debt trap despite knowing how the whole thing works. As per U.S. Bank, it's advisable to practice a few measures to avoid credit debt. For starters, it is important to spend within your limits. One should also consider avoiding credit card debt by paying the balance in full each month. To reach this goal, one must be within their means. Having said that, paying in full is not always an option. In these cases, one should try to keep a low utilization ratio.

For more such videos, follow Caleb Hammer on TikTok.