‘Do not try to justify it’: This Texas woman cannot stop running up her credit cards on clothes and makeup — and Caleb Hammer forces her to face it

Consumer debt boom

American consumers added nearly $130 billion in credit card debt to their accounts in 2023. Overall, their credit card debt burden is now worth $1.13 trillion, according to the New York Federal Reserve’s latest Quarterly Report on Household Debt and Credit.

Nearly half (45%) of credit card users said they used their plastic more due to inflation, according to a recent survey by Debt.org, while 55% say a credit card helped them pay for a financial emergency. And a significant 35% say they’ve maxed out their credit card in recent years.

However, Karis seems to be using credit cards to fund unessential, non-emergency items such as clothes, weekly vapes, shoes, beauty products, eating out, lingerie and makeup. While this is clearly discretionary spending, Karis refuses to see it that way and justifies every item as necessary, a time-saver or essential for her work.

Given the fact that she works from home, Hammer is unconvinced by any of this. “I don’t think you know what essentials are,” he tells her.

In fairness to Karis, her compulsive behavior could be a sign of oniomania or a shopping addiction. Researchers estimate that approximately 5% of adults have some form of compulsive buying disorder. Although Karis denies having this disorder, her spending patterns have clearly put her in financial trouble.

In the previous month, Karis spent $2,115 on online shopping, more than her rent and nearly half (51%) of her monthly income. Her minimum monthly payments on all her debt is $768, according to Hammer’s estimates.

Fortunately, Hammer believes Karis has many levers at her disposal to shift her financial situation quickly.

How to get a free $20 to invest in your future

An app called Acorns automatically rounds up purchases made on your credit or debit card to the nearest dollar and places the excess "change" into a smart investment portfolio. Acorns offers a $20 welcome bonus, immediately from your first investment.

Get $20

Multi-pronged strategy

Hammer prescribes a four-step solution for Karis’ financial troubles.

The first step is to lower her rent payments. Karis shouldn’t be spending 41% of her income on rent and she doesn’t need to. She currently lives alone in a two-bedroom apartment because she believes she needs her remote office set up in one of the rooms. “I worked from home a lot and until I saved up enough money to purchase a place I never had more than just a room for myself,” Hammer tells her.

Being remote should also allow her to stop spending so much on clothes and makeup. “The insane thing about the clothes thing is that SHE WORKS FROM HOME,” says one of the comments on the video.

With these two simple changes, Karis can reduce her monthly expenses drastically. After that, Hammer encourages her to take up multiple jobs or gig work to boost her income and use either the avalanche or snowball methods for reducing debt over time.

The combination of lower rent, lower discretionary spending, debt repayment and more income could change Karis’ financial trajectory in a matter of months.