When Lindsay Johnston enrolled in the University of Stirling in Scotland as an undergraduate in film, media and marketing, she was interested in more than books. She was also keen to meet new people and enjoy the independence of university living. It wasn't long before Ms Johnston fell in with a new group of friends with a busy, and expensive, social calender. At the impressionable age of 17, Ms Johnston took out her first credit card to finance her outings. Little did she know, this plastic would create a persistent shadow of mounting debt that would detrimentally affect the rest of her time in university, not to mention several years of her working life.
"It was a case of trying to keep up with friends at university," she says. "I wanted to buy clothes, I wanted to go out. I was given an allowance at university by my parents, and the credit card was for things I couldn't quite afford - the superficial stuff, the stuff I didn't need." It was in 1997, during the heady days after Tony Blair was elected prime minister in Britain, when the Aberdeen-born Ms Johnston signed up for her first credit card, which was from Barclays Bank.
Aside from clothes, Ms Johnston would spend heavily on tickets to watch special events, such as sport matches, and on other "things I hadn't budgeted for". Gifts also put a dent in her budget. "I would pay for a flight with every intention of paying it back the following month, but that didn't quite come to fruition," she explains. "I didn't feel like I was being frivolous with it, although looking back there were things I bought that I didn't necessarily need."
For example, on one occasion Ms Johnston went to a rugby game between Scotland and New Zealand in Edinburgh, the capital of Scotland. The ticket cost her about £40 (Dh227), which Ms Johnston says "was a lot of money at the time", and added to that was the cost of the train journey there and back. In total, the bill came to about £150, which all went on the Ms Johnston's credit card. The problem was, Ms Johnston found that "everybody was in the same boat". That is, many of her friends were also spending large amounts of money, so she felt she had to do the same to avoid being left behind.
At the end of four years of studies, and an additional year for her master's degree, Ms Johnston accumulated about £15,000 in student loans. Fortunately, this debt was mostly for tuition and normal living costs. It was also low-interest, and specifically geared towards university students. But in addition to the student loans, Ms Johnston consistently tallied a balance of around £2,000 on each of her two credit cards, spending money she didn't have on clothing and her social life. Meanwhile, she also racked up a hefty overdraft facility on her bank account of £2,000. Indeed, when Ms Johnston left Stirling to work in London in 2002, first for a public relations company, then in corporate communications for a centre that treats people with addictions, this debt followed her.
There are few cities in the world more expensive than London, so even after five years of work, Ms Johnston was still heavily in debt. "You spend £20 before you step out of the house," she says of life in the UK capital. Then there were trips away to add to her financial woes. Ms Johnston had several university friends who were originally from Belfast, so she travelled to the capital of Northern Ireland for events such as weddings. Usually the costs were added on to her credit card.
"The flights were about £40 on easyjet [a budget airline], the hotel was about £100 and my outfit was another £100, and there was other spending on top of that," she says. "The whole thing would have cost £400 to £500." Unfortunately, it was often the case that soon after she had paid off most of what she owed, she would use the card again and see her debts grow back to where they had been. And with an interest rate of about 13 per cent, Ms Johnston was paying hundreds of pounds of interest each year just to keep herself afloat.
Tired of the cycle of debt in London, Ms Johnston sought refuge in sunny Dubai. That was a big reason she moved to the UAE in 2007, hoping a higher salary and no taxes would allow her to save and pay off the debts she had been plagued with for so long. "I'm slowly ploughing through everything and getting there," she says. "I've been here for two and a half years and it's nearly all gone. When I moved here I had two credit cards and my overdraft."
Earlier this month, Ms Johnston, now 30, finally cut up one of her credit cards, and has kept only her Barclaycard for transactions that cannot be made any other way, such as online purchases or booking hotels. And working as a senior account director for a public relations firm, she has managed to bring her debt down to only a few thousand pounds. She acknowledges it has been a long and difficult road, and Ms Johnston is acutely aware of the risks of falling into debt again. When it comes to credit cards, she says UAE banks are now "throwing them at me".
But she's not tempted. "I am really wary, just because I don't want to go outside my means any more," she says. "I just want to spend what I have." Ms Johnston's only credit card is now set up so the balance is automatically paid off each month, meaning there is no chance of her building up the debts she was afflicted with in the past. "Living in this country, it's hard not to have at least one credit card, because there are so many things that you have to use your credit card for, like online [purchases]," she says.
She describes her five years at university as the best of her life, so doesn't advise undergraduates to scrimp, save and miss out on many of the fun experiences that are part of being away at school. But she does feel a little more care to avoid throwing money away would not be a bad thing. While a new place or group of friends can be tempting, trying to keep up with a life you can't afford will have ramifications.
"I'm not going to say don't spend," she says. "But, if you have a credit card, make sure you get one with the lowest interest rates possible. "Do try to budget and don't go crazy, so you can make a dent [with repayments] into what you've bought, rather than make the minimum payments. If you only do that, you're never going to get rid of it. I made a lot of really good friends at university and I don't regret it - I had a lot of good experiences. But I think you have to be sensible - don't go wild."