Tuesday, July 10, 2007

Works For Me: Paying Credit Card Debts

Ten years ago, my hubby and I were 17,000 in credit card debt. We didn't have anything to show for it. It was just an accumulation of purchases here and there. Bad choices, poor decisions, unplanned spending.

Today, we are debt free. Actually we were freed from credit card debt in about 3 years after we resolved to pay it all. We do have a loan but it's a mortgage for a beautiful home we're blessed with. Other than the mortgage, we are debt free. It's a very good feeling to be debt free.

Here's what worked for us.

1. Once we decided, "that's it, and we'd pay our credit card down to zero" - we started an Excell file to record and graph our debt payment. Visuals always help. As long as our graph shows that it's going down...we're on the right track. We tracked monthly. It's really fun to see the slope going down...

2. We worked our "okole" off. Hubby had to take a second job with the purpose of paying our debt. He kept the 2nd job for 2 years and once we paid off our last credit card, he resigned from the second job. I also did some extra "cleaning jobs" to help out.

3. We attended classes and support group. We attended this class about financing sponsored by our church. We consulted financial experts. We asked for prayers and made our selves accountable.

4. We consolidated our loans so we only had one major credit card to pay. We took advantage of the "zero interest on the first year" promos.

5. We used checks instead of credit cards in all our purchases while we're paying our debt. Now we use debit cards.

6. We prayed and prayed. It really helped. Hubby and I got some unexpected bonuses from work that helped us pay a substantial amount down. It would have been nice to use those bonuses for a vacation or car or appliances, but we used it to pay our credit card instead.

If any of you who stopped by to read this is struggling with credit card debt, I would like to encourage you to make a decision today to pay it off. It's worth it!

For more "Work For Me Wednesdays", visit Rocks in my Dryer.
For inspiration to pay debt, check this blogger out: Blogging Away Debt


Anonymous said...

Great tips! We did much of the same things. When we got into a real bind we went to CCCS - they're a legit, reputable credit counseling service and they saved us when we were drowning. There's no feeling better than not being burdened by debt!

At A Hen's Pace said...

Very helpful tips. We payed off college loans early in a similar way.


Karen Putz said...

Congrats! What a great feeling to be debt-free!

SarahBeez said...

I did a WFMW post on credit cards too! I'm actually currently working on paying off a nice chunk of CC debt that I accrued in much the same way you did... I'm not consolidating my bills or taking a second job but I'm slowly making progress. I used Excel to make graphs of my past expenses & used that to make a budget which I've been sticking to, cash only. NOT using CC's while trying to pay off the balances makes such a big difference. Anyway- I like your tip about using Excel to graph your progress, I can see how that would be helpful. I'd much rather look at a graph showing I'm paying my cards down rather than a graph of what I've been spending!

BlondeMomBlog (Jamie) said...

Congrats Liza! Yes, it can be done. We don't have credit card debt, but we have a home equity loan that is about the same. It is so stressful and frustrating. And we are both working our "okeles" off! ;)

My oldest will be out of daycare in a week and a half and will be attending public kindergarten (free!) so my plan is to start taking that savings in tuition and apply it to the debt.

Great tips!

mistihollrah said...

I'm inspired! How did you set up the graph in your excel program? I'm not Excel savy!

Thanks for sharing!

Ginny said...

Wonderful tips. We are currently working on paying off credit card debt! I like the idea of graphs, I haven't done that :)

Anonymous said...

My father told me never to get a credit card I never did thank goodness

Im pleased your credit card debt free again

Anonymous said...

Wow, thanks for posting this! Great idea on the visuals!

Analyse said...

hehe, at least i know now that im not the only excel addict here... i have graphs on just about anything, from our electricity bill to our grocery expenses..

on credit cards, i never really had one and i never dreamed to have one anyway. what we have here is a debit/credit card, which means, all card payments will be on credit in a month and will be automatically debited after that period.

like you, we only have the house mortgage to pay off. the other expenses like cars, etc were all paid cash. i hate seeing others getting rich because im a gastadora hahaha.. so in fact:
- we save so in times of need, we know that we have something to spend.
- we dont spend more than what we could afford.
- for big expenses like cars, we dont really rush.. we don't follow the trend anyway.. so for example, i stayed quite a long time with an old car before buying a new one.
- we focus on what we need and not on what we want

those tips worked for me, it could work for others too ;)

Anonymous said...

Congratulations for paying of your unsecured debt Liza. It's an achievement to be proud of. Mortgage is a secured debt and it's not a bad debt. People don't really realize specially here in the US that things bought on credit card even on sale will turn out more as compared in buying it in case. We do put things on credit card like our roof and floor(having them replaced), they were on 0% and we paid it off before the expiration date.

We haven't been all that wise along the way also learned lessons like buying a boat is a pain in the butt. Maintenance is a huge expense. but hopefully we will pay it off and get rid of it.

tessa said...

Hey Liza-

Thanks for stopping by my blog and for directing me to this entry - great tips. What dedication you and your husband have shown ... truly inspiring! Congrats on the financial freedom! Hope to join you in the near future.

Travis or P.T. said...

Thats great. And I'm happy for you both. And thanks for the encouragement. We are working on it, but sometimes it seems like a slow go. But we're doing it, one month at a time.

Abigail said...

we are currently paying of our credit cards. i also have an excel with a list of all our expenses pero no graph, I think I have to put one!

thanks for this!

Lammy said...

we did much of the same (cccs etc)
But one thing I did find helped us out a lot was to only pay CASH for everything we could.
Also--WEB PAY... a lot of the 'putting off the bills' was the sitting down, writing out the check, finding an envelope, adress and then, heaven forbid, a stamp at the bottom of my purse. With Web Bill pay, all of that time consuming stuff just melted away.