Swimming in the Debt Pool: How I Wiped Out $36,000 in Credit Card Debt in Five Years

The following is not financial advice. It is my experience and opinion.

I am not a financial wizard or financial advisor. I do not hold any degrees in finance, accounting, or business. My degree is in English, and no finance classes were required to obtain it. I am a simple woman who wanted to solve a problem.

Five years ago, I took a good, long look at my finances. I was thinking about buying a new car, and I wanted to be sure I could make the car payment without running myself short. I was shocked and dismayed to find that I had over $36,000 in credit card debt.

I knew I was paying high interest on my cards, but I had no idea I’d slipped that far into debt. It's so easy to just make a payment when the bill arrives and not pay much attention to the total amount. Cards that originally charged ten to twelve percent interest had increased to over twenty percent. While I was making monthly payments well above the minimum requirement, over half of the money I paid each month was going to interest. At that rate, I was looking at being able to pay everything off well after the age at which I plan to retire.

That was completely unacceptable.

I carefully considered my options. I thought about contacting a credit counseling firm, but I decided not to do that because I needed to retain access to my cards due to my frequent travels. Rental car agencies and hotels almost always require a credit card and refuse to accept debit cards. Also, I've found the fraud protection and charge dispute processes are better with my credit cards than my bank, which makes using a credit card more ideal when I'm in unfamiliar territory.

The first thing I did was reduce my monthly expenses. Obviously, I put off buying a car for a few years. I cancelled my subscriptions such as my monthly book club, skincare box, genealogy database access, writing leads database access, and my quarterly women's wellness box. I switched cell phone plans to one that was roughly half the price of what I’d been paying. I stopped shopping at department stores unless I had a coupon or there was a fantastic sale. I switched from high-end cosmetics to drugstore specials. I started taking my lunch to work every day. I also stopped going to the beauty salon.

Over lunch in the breakroom at work one day, a coworker explained how he had paid off the large amount of debt he was assigned in his divorce. He told me the best way he found to tackle his mountain of bills was to use zero percent interest balance transfers. He explained that he started with one, then got another, and another until he owed nothing.

Keeping his advice in mind, I started reading my new credit card offers, searching for one with zero percent interest on balance transfers. I found one and applied. Because I make it a point to pay my bills on time, I was granted the credit card with zero percent interest for eighteen months.

With the generous credit limit, I was able to transfer a hefty chunk of my debt to that card. Then I did some math. I divided what I owed that card by the number of months in which they would not charge interest and made equal monthly payments in that amount.

Before that card was paid off, I received a couple offers from credit cards I’d had for a while offering zero percent interest for different periods of time. I also received a couple offers for under two percent interest. I transferred more high interest balances to those with lower to no interest. In total, I took advantage of six of those zero to low interest balance transfers, which saved me thousands of dollars and allowed me to pay off my debt quicker.

I kept track of everything in a small spiral notebook. I wrote down every credit card and their balances each month. Then I wrote down how much I was paying each one. As I neared the end of the promotional period for each card, I jotted down the date on which the balance must be paid in full. At the bottom of the page, I totaled my debt and circled it. As it decreased, so did my stress.

Unfortunately, my progress was slowed significantly by a six-day stay in the Intensive Care Unit of my local hospital four years ago. While I would not have survived without that medical treatment, such care came at a great financial cost. That hospital bill took me nearly two years to pay and forced me to reduce my payments to my credit cards. I pivoted and reduced my personal expenses even further to make certain each creditor received as large a payment as possible.

It’s now been five years since I began my debt elimination journey, and I have just made my last balance transfer payment. At this moment in time, I am credit card debt free.

The most interesting part of this saga is that I never stopped using my cards. I still use them for hotels and rental cars. I just make certain to pay those balances on the first billing cycle. For example, I’m staying in a hotel next month, so I will have that bill in July. I have already earmarked that payment to come from my first paycheck of the month.

Along with my satisfaction, my credit score also increased. I feel such a sense of accomplishment. I’m quite proud of myself. I did buy a used car last fall, so I will have a car payment for a few years. However, I make my normal payment from one of my paychecks in the month and then make a principal-only payment from my other paycheck. My goal is to get that six-year car loan paid off in three years. I think I can do it.

Now that I am no longer swimming in the deep end of the debt pool, I can start saving money for some much-needed dental work and car repairs. There are several other things I’ve been putting off that need to be handled soon, but I feel good about my ability conquer those mountains.

Am I going to be rolling in the money? Heck, no. I still have monthly bills to pay and back burner projects that need done. I will, however, be able to go out for a nice dinner and order more than the chicken once in a while.

Debt is so commonplace in our society. Nearly everyone I know carries a sizeable chunk. I have promised myself that I will keep a close watch and never let mine get out of hand again.

I am a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for me to earn fees by linking to Amazon.com and affiliated sites.

Thank you for reading Ozarks Maven! If you’ve enjoyed my little seeds of wisdom and joy, please join me again next week for more Ozarks Maven.