How I Got Out Of Credit Card Debt

September 6, 2007 · Filed Under , · 18 Comments 

Credit CardsAs I mentioned in an earlier post, 6 years ago I was in credit card debt up to my eyeballs. At my rock bottom, I made a vow to restore my financial well-being as well as to insure my family’s security. This vow was unwavering, which it had to be if I was going to be successful. Here are some techniques my wife and I used to get out of debt and actually start saving money. Hopefully some of my techniques can help somebody else.

Stop using credit cards altogether. When I first started my journey to be debt free, I would only pay for things with cash. It is amazing how easy it is to slide the plastic, it does not feel like real money. This is a big reason why teenagers and college aged kids get into so much financial trouble. When you pay with cash, you see the cash go bye-bye and it makes a big impact psychologically. I kept a credit card in my wallet with a small limit for emergencies only.

Stop living for today only. I fell into the trap of consumerism where I felt I had to have it all and failed to consider my long term financial peace of mind. I had to have the newest DVD player and the newest clothes. Finally, I made a vow to enjoy what I had and forget about the rest. This mind set was one of my keys for success. None of that other stuff will bring me happiness in the long run. Any happiness that accumulating things gave me was very short lived and quickly faded away into the sunset of 18% interest rates.

Find some extra income. I picked up a 2nd job at The Home Depot and worked there 24 hours a week, mainly weekends. The extra income always went toward paying off the credit cards. Plus, there was a nice side effect of this job; I was always so tired I never had the energy to go and waste money on stuff. Other options are starting an ebay business or picking up some moonlighting work. If you are going to be successful in getting out of debt every dollar counts.

Create a budget of needs. Needs are shelter, food, heating, you get the idea. Once you figure out what your needs are then get rid of all the other crap. I just wrote a post called 7 Ways To Reduce Monthly Costs Right NOW, it is amazing how much stuff I was wasting money on every month. Whether it be stops at Starbucks all the time or memberships that we seldom use, you can reduce a lot of costs by cutting these out of your monthly budget. Use the extra savings to pay off your debt. I can say from personal experience that this really does work.

Stay the course. I can remember having many set-backs on my journey to be debt free. Car needed new tires or the washing machine broke, but it was important for me to realize that getting out of debt was a marathon not a sprint. I knew that if I stayed focused on the prize nothing was going to stop me. As anyone who has come out of debt can tell you, the peace of mind and serenity that living a debt free live brings you is well worth the ride.

Please Pass This Post Along and Comment Below!
  • Digg
  • del.icio.us
  • Furl
  • Reddit
  • StumbleUpon
  • Technorati
  • YahooMyWeb
If you enjoyed this post, make sure you subscribe to my RSS feed!

Comments

18 Responses to “How I Got Out Of Credit Card Debt”

  1. Lynnae @ Being Frugal on September 6th, 2007 6:44 pm

    Great post! It’s so simple, but it’s so hard to follow through. It’s inspiring to see that you’ve actually done this!

  2. Kyle on September 6th, 2007 6:55 pm

    Thanks Lynnae, I was afraid the post might make it sound too easy. It is very hard to do but like they say “the harder it is, the bigger the reward.” Or something like that….

  3. Tish on September 6th, 2007 8:14 pm

    Great tips, Kyle! :)

  4. Kyle on September 7th, 2007 12:20 pm

    Thanks Tish and glad you stopped by my blog.

  5. Fabulously Broke on September 8th, 2007 1:15 pm

    Wow :) Congrats!

    I love the list.

    My only debt is education debt though :) I’ve never had consumer debt (thank goodness!)

    But for me, it’s impossible to be credit card free because of my job – constant company expenses that I get reimbursed for later, so not only do I need a LOT of cash on hand to be able to be CC-free, I also need to have a record of where, when, how much and what I spent it on (what category).

    But when I spend my own income (I try and keep the two separate via a matrix of 6 Excel spreadsheets LOL), I spend it on credit card so I have the line item as my record, then I go back home, and immediately pay it off in full – that exact amount.

    I used to do this when I first got my credit card at 19, but I had slipped over the years, and now I’m back to doing it again instead of throwing a flat $500 amount into it because I hazarded a guess that it was how much I spent.. :| not very exact or good.

  6. Kyle on September 8th, 2007 4:35 pm

    Fabulously Broke, yeah if you can pay it off every month then a credit card is a good and very convenient thing. When I was younger and well, kinda stupid, I was more of the mindset of buy what I want now and worry about it later. (or even, don’t worry about it later) That got me in a lot of trouble.

    Thanks for the comment.

  7. The 104th Carnival of Debt Reduction - Digging Out Edition on September 10th, 2007 6:04 am

    [...] Debt, Bad Debt: The Differences, Illustrated by Silicon Valley Blogger @ The Digerati Life How I Got Out Of Credit Card Debt by Kyle James @ Rather-Be-Shopping.com Blog What’s your tipping point? by paidtwice @ I’ve [...]

  8. Guest Post at Moneyning and some Carnival Roundups | I've Paid For This Twice Already... on September 10th, 2007 9:34 am

    [...] How I Got Out Of Credit Card Debt at the Rather-Be-Shopping.com Blog. It gives really solid tips on focusing on getting rid of that debt. [...]

  9. Carnivals everywhere! | beingfrugal.net on September 11th, 2007 2:11 pm

    [...] of The Happy Rock, they’re hosting the Carnival of Debt Reduction this week.  I really liked How I Got Out of Credit Card Debt at Rather-Be-Shopping.  I always love an inspiring success story!  I submitted my post about [...]

  10. Best Debt Articles from Carnival of Debt Reduction #104 at Clever Dude Personal Finance & Money on September 12th, 2007 7:39 am

    [...] Be Shopping shares how he got out of credit card debt. I definitely agree with his statement that “getting out of debt was a marathon, not a [...]

  11. Sunday Samplings #9 « The Kat House on October 2nd, 2007 12:21 pm

    [...] years ago, Kyle of Rather-Be-Shopping was up to his eyeballs in credit card debt. In this post, he discusses the techniques he used to get out of debt and start saving [...]

  12. BlogsWeLuv » Blog Archive » The Rather-Be-Shopping.com Blog - A Blog We Luv on October 3rd, 2007 7:08 am

    [...] How I Got Out of Credit Card Debt, Kyle discusses his battle with credit cards and the steps he took to become completely debt-free. [...]

  13. Matt Keegan on November 21st, 2007 9:17 am

    A very good article, much like an article I published today.

    If a debtors credit rating isn’t tarnished, I recommend getting a low or zero percent interest rate credit card and moving balances over first. Then, tackle the debt aggressively while not worrying about racking up big interest payments.

    Some credit card companies will agree to reduce their APRs while others will not. Still, it is a consumer’s market for people with good credit.

  14. maria on December 8th, 2007 10:34 am

    Excellent advice, I agree with you that it hurst when paying cash instead of using the plastic. We feel it more and therefore spend less.

    maria

  15. Leslie on June 18th, 2008 5:16 pm

    I know this is an old post, but I found it via a series of links and had to comment. In 1999, I was told by my accountant that I had absolutely no choice but to declare bankruptcy after my small business failed, but I refused to do that since honestly my debt was from my own foolishness and had been in fact within my control since most of it was accumulated either before my business failed. Instead, doing pretty much just what you described, I spent 8 years working my way out, and now have no credit card debt – the only debt we have is our mortgage, a small second to consolidate my student loan bills from my Master’s degree (which, in my field led me to a significant raise so it was more than worth the cost), and another year on a car loan at 4% interest.

    I’m always shaking my head at folks who think that there is a quick and easy way out – or who think that they’re so far in that there’s no benefit to getting themselves out. I’m glad to “meet” someone who was in my same position and understands what it really takes to get out of that level of debt.

  16. Dan on November 14th, 2008 3:45 pm

    I’m working to get rid of ~ $8,000 debt now. A couple of the cards have a 20% interest yet my credit score is 728! Go figure. I’ve shredded the cards a while back and am going to beat this thing down! Thanks for the extra inspiration!

  17. Classy But Cheap on December 1st, 2008 7:14 pm

    My husband and I have a lot of credit card debt – not because we bought luxury items but because we haven’t had enough money to live off of for several years due to multiple layoffs. We’ve used the cards for groceries, gas, etc for years and the sum is overwhelming.

  18. Kerri on October 12th, 2009 11:15 am

    This is great info. It’s so hard to get out of debt. Seems as though every time I clean up my credit card debt, I fall right into it again. There was a time when I only had my debit card and no credit cards what-so-ever, it was fabulous! Trying to get back to being in that same situation again. Wish me luck!!

Leave a Reply




Bad Behavior has blocked 377 access attempts in the last 7 days.