The year I turned thirty years old, I had approximately $12,000 in credit card debt. I had gotten my first credit card at nineteen, meant for emergencies. But my first “emergency” came a few months later during a visit to New Orleans when I was on tour with a theater company.
I wanted to buy gifts for my family.
But I had no money.
So I used my brand new credit card!
Later that same year, I needed a new vacuum cleaner. I had just moved into my first apartment, and I was making enough to pay my rent, utilities, gas, and grocery bills, but I didn’t have any extra for things like vacuum cleaners.
Or eating out.
Or a new outfit for my friend’s wedding.
Or… the list goes one.
In a matter of months, I had accrued a few thousand dollars in debt, but each month I was only able to pay the minimum payment on my bill. And over the next ten years or so, those few hundred dollars turned into twelve thousand dollars, as I added things like plane tickets, college text books, Christmas gifts, and retail therapy to the bill.
Can you relate? Most Americans can.
But the year I turned thirty, I decided enough was enough. This was going to be my year of getting debt free.
And I did! Over the course of about eighteen months or so, I paid off my credit card, and in the seventeen years since, I’ve managed to maintain my status of being credit card debt-free.
Here are my tips for getting out of credit card debt, based on what worked for me.
- Decide you’re ready to get serious about getting out of credit card debt. Thoughts lead to actions, so the first thing that needs to happen is a mindset shift. I remember distinctly where I was when I decided I was done carrying the albatross of debt around my neck. The shame of having spent so much money on interest was pretty intense, and for years, it was just easier to ignore my compounding debt and live in denial. And the credit card companies made it really easy! As long as I kept making my minimum payments, they would increase my limit every so often. It wasn’t until I decided enough was enough that I could start making progress on becoming debt-free.
- Consolidate your credit card debt into one place. This article from Forbes offers seven ways to consolidate your credit card debt. The way I did it was to open a new credit card with an introductory offer of 0% APR on balance transfers for a limited amount of time after opening the card. I transferred the balance on my existing cards. Then, I destroyed the new card, so I could not use it and increase the debt.
- Close existing credit card accounts. Once I had transferred all of my credit card balances to the new 0%APR card, I closed all of the accounts I had. Some people are afraid to do that, in case they have an emergency and need a credit card in a pinch. But I had the new account, and if I really needed to, I could request a new card. (Thankfully, I never did.)
- Earn more money. Credit card debt boils down to spending more than you earn. So, to get out of debt, you need to earn more money. When I decided to get out of debt, I was self-employed as a communication consultant. I loved my work and my clients, but in truth, I knew I could make more money as an executive assistant—a job I had all the skills for and knew I could do. So I went to a temp agency, took all of their proficiency tests, and began interviewing for executive assistant positions with a certain salary in mind. Within a few weeks, I had been hired as a temporary Executive Assistant to the CEO of Elizabeth Arden in NYC. After six months, I was hired permanently. My salary was twice what I had been earning as a freelancer, plus I had health benefits, a 401(k), and stock options. The job was not my passion—but I was grateful for the nearly two years I spent there.
- Pay more than your minimum balance. Once I started earning more money, I was able to make significant progress on my debt. Within a year, I had paid off the entire credit card debt, plus I had begun saving 10% of each paycheck.
- Live within your means going forward. In other words, don’t spend what you don’t have! Once I had paid off my debts and purchased a newer (used) car, which I also paid off quickly, I determined to live within my means going forward. This means not spending what I don’t have and going without rather than going into debt. About two years after I started working for Elizabeth Arden, I was offered a position with a small arts non-profit organization. The salary involved a 30% pay cut, but the work was much more meaningful to me, and by then, with no debt and a simple lifestyle, I knew I could afford to do it and still live within my means. I spent the next five years working for that organization, until I moved to Seattle to marry my husband and start my own business again.
Being free of credit card debt has made so many things possible. Without the burden of debt, you’re able to be more generous to others and to save and invest more in your own future. Before, it was all I could do to make my minimum credit card bill payments. Now, I can put my money to work for me.
One last thing: when I got out of debt, I was single. I realize that it’s much harder for people who have families, experience joblessness, etc. But it’s totally possible. Check out how this single mom paid off $35,000 in debt on a modest salary and went on to build her net worth to over $78,000.
And you, too, can do it.
Christy Tennant Krispin is a Whole Life Coach helping clients live more intentionally in alignment with their goals and values across all spheres of life. Schedule a free consultation with Christy here.
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