In 2016, our family paid off all our credit card debt, over $10,800 in one year. After that, I went from worrying about our credit card debt to feeling a sense of relief and freedom. I never have to check our balance again. I never have to think about making at least the minimum payment on our credit card each month. Now, I am free to move onto our other financial goals and put my credit card debt stress behind me.
If you are struggling with credit card debt, please know that there is hope. You can get those balances paid off. I believe that you can get to a point in your financial life where you can pay for an unexpected expense with your own money and not have to rely on a credit card to cover the bill.
If you have credit card debt and you want to pay it off then here are some steps you can take to make that happen.
Stop adding to your debt
The first step towards getting out of credit card debt is to stop adding to your balance. If you swipe your credit card on a regular basis, then you must stop. Not adding to your balance going forward is a big win. If you stop carrying your card with you in your wallet, it will make it harder to make a charge on it. You also might want to cut up your card to prevent yourself from using them. Do whatever you can to keep yourself from charging on your card going forward.
Also, be sure to switch any charges you have set up on auto draft over to a checking account instead. Look through a year’s worth of past credit card statements so you can make sure you didn’t forget about anything that is set to auto draft.’
Set a target pay off date
Give yourself a specific date of when you want to have your credit card debt paid off. This will make your goal feel real and you will increase your chances of being successful. When we started paying off our credit card in January 2016, we planned to have it paid off by the end of that year. We made our final payment in December 2016, so we finished exactly when we had planned to. Push yourself to work hard towards your target date, but also be realistic with your time frame.
Find a source of support/encouragement
Tell someone you know about your plans to payoff your credit card debt. Every time I made an extra payment towards our credit card I would email my sister to tell her about it. She would reply me back and celebrate with me. It felt good to have someone outside of our household cheering us on towards our goal. The key to this is to find a supportive and encouraging person. You want someone moving you forward to reach your goal, not holding you back.
See if your credit card company can help
Contact your credit card provider and see if there is anything they can do that will help you pay off your debt. I know it sounds bizarre, but it’s worth trying. One idea you could try is what we did. Our credit card debt was at Discover Card. By calling them, I got them to give us a $100 statement credit for setting up our minimum payment to draft each month out of our checking account. This helped us a little bit towards paying our balance off.
Also, try asking your credit card provider if they will lower your interest rate. It never hurts to ask.
Try several different ways to pay down your balance
We did several different things in order to pay off our credit card balance. Here are some of the things we did that helped move us closer to our payoff goal.
- We put any extra money we had towards our balance. This included our birthday gifts, Christmas gifts, Christmas bonuses, and our income tax refund.
- If you have a balance in your cash back bonus account redeem that as a statement credit.
- At the close of each month, pay your account balance down to a whole dollar figure. For instance, if your balance is $7,945.50 then pay an extra payment of $45.50. This would bring your debt to $7,900. For some reason, I liked always having our credit card balance at a whole number and making those small extra payments will add up.
- Another idea you could try is to try to make a payment to cover the interest charged each month. Once you get your statement for the month, pay an extra payment covering the interest you were charged that month.
- Make several payments a month. Even if you have a payment set up to draft, you can make several online payments each month. Watching your balance go down with each payment you make is a big motivator to keep paying towards your debt.
- Look into cutting your monthly expenses in other areas and use the savings to pay down your credit card.
What to watch out for
The entire time we were making large payments towards our credit card balance we were receiving letters in the mail from Discover card informing us that they were raising our credit limit. Watch out for this. What they want you to do is to charge your card back up again. Don’t be enticed to charge again because of the increase in your credit limit.
Be aware of any upcoming expenses that you will have to pay for and don’t let them catch you off guard. It is ok to stop paying your credit card down to cover other expenses. Don’t spend every dime you have paying down your credit card and forget that your car insurance is coming due or you have a dentist appointment that you didn’t set the money aside for. Plan for these expenses in advance because the last thing you want to do is to charge them on your credit card because you forgot to save for them.
Things to remember
- Don’t beat yourself up over your debt. You can’t go back and change the past. Don’t let the fact that you have credit card debt mess with your self-esteem and self-worth. You are not a failure. And, you are not a bad person. Cleaning up the debt going forward should be the focus, not making yourself feel bad about the past. The past is history. But, good news. You can change your future.
- Understand how you got into debt in the first place, so you can prevent it from happening again.
- Start saving money to cover any unexpected expenses going forward so you aren’t forced to rely on a credit card to cover them.
If you are in the middle of paying down your credit card debt, let me know how it is going and what has been working for you. Or, if you have other great suggestions to help someone get their debt paid off, leave your idea in the comment section below.