Pay Off Your Credit Card Debt and Have Personal Finance Success

Do you have debt?

I have carried my share of credit card debt.

I signed up for my first two credit cards in college (you know, to get the free t-shirt). By the time I left college I had a decent amount of debt and two worn out t-shirts. I wasn’t paying this off every month and so I was paying 20% or more in interest charges.

Looking back, it’s hard to believe I left college with this debt considering I graduated with an advanced degree in accounting and was preparing for the CPA exam. I guess I was living for the future, thinking that first big pay day would bail me out.

After college, I got a few retail credit cards (you know, to save 10% on more t-shirts). All this eventually added up to late charges, credit dings, and a bunch of high interest, stupid debt.

Bottom line, I let the credit card companies dictate when I applied for a credit card and I wasn’t being disciplined in the use of those cards. Well, there comes a time when we need to take this control back and be intentional about your finances (aka, grow up).

Well, if your in this boat, there’s never a better time than now to do this.

Why I Paid Off My Debt?

I paid off my debt for the following reasons:

  1. I realized I was sick of paying for something that I had long since used (dinners out, movies, vacations, etc…).
  2. I realized how much money I was throwing away on high-interest charges.
  3. I wanted to feel in control and in charge of my money and not have this burden hanging over my head.

How I Paid Off My Debt?

I paid my debt off as quick as possible. The first thing I did was look for a balance transfer credit card offer so I would eliminate the high-interest charges.

There are sometimes offers without a balance transfer fee. These deals usually run around 12 months before more interest kicks in. There are dangers in doing a 0% balance transfer, but if you are disciplined, you will come out better off on the other side.

Next, I simply divided my balance by the number of months left on the deal and planned to make that payment each month. For example, if the balance is $2,500 and it’s a 0% interest deal for 12 months, the monthly payment would be around $210 ($2500/12). That was considerably more than my minimum payment, but I was ready to make a change.

Getting out of this debt was going to hurt a little. If the monthly payment had been too high, say in the thousands, I would have considered doing a second balance transfer to stretch the 0% to 24 months.

If the credit card companies wouldn’t extend me the 0% offer, I would have listed my credit cards out, highest interest first, and planned to pay as much as possible each month on the highest one until it was paid off. Then I would move to the next highest interest card.

Extreme Measures

The next thing I did was a little extreme, but it was what I needed. I cut up my old cards and the new card (I had transferred to) so I couldn’t add anymore credit card debt to my life. This was hard to do, but I was really excited about taking back control and I wasn’t going to let anything get in my way.

Do you have an inspiring get out of debt story you could share? Feel free to comment below…

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About Philip Taylor, CPA

Philip Taylor, aka "PT", is a CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of the personal finance industry conference and trade show, FinCon.

He created Part-Time Money® back in 2007 to share his advice on money, hold himself accountable (while paying off over $75k in debt), and to meet others passionate about moving toward financial independence.

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