Listen, when I was in my 20s, I made some really stupid decisions. Obviously.
I’m well into my 30s now, and those decisions have been affecting my life every day since. It all started out in the usual way: one credit card with a small limit for things that required one that quickly escalated into a series of ill-advised purchases, not paying attention to interest rates, and trying to live a lifestyle that I couldn’t afford. The credit card companies kept upping my limits, and I kept spending. On top of that, there were months when I couldn’t pay the electric bill or buy groceries or gas up my car with actual money, and I had the perfect storm of bad circumstances and bad decisions leading to more credit card debt than most people think is possible.
I know what you’re probably thinking, but I’m not a stupid person. I’m a smart person who made some very stupid choices. Some very stupid, expensive choices. And starting on my 29th birthday, I finally added up my various balances and freaked the fuck out. It’s not like I didn’t theoretically know how much in debt I was; it’s just that when it was all spread out over a few cards and I was making minimum payments, it was easy not to think about it too hard. At that point, though, I realized I needed to grow the fuck up and deal with this debt situation head-on. My credit card debt was more than my yearly salary at that point.
There is no shortage of resources for people with astronomical credit card debt, but some are useless, some are predatory, and very few are actually helpful. I cobbled together a game plan from different pieces of advice, and I put it into effect. Now, my plan won’t work for everyone, due to several factors working in my favor:
- I currently have a relatively well-paying job.
- I have two credit cards with extremely high limits.
- I repeatedly receive zero percent interest balance transfer offers.
- I don’t need my credit cards to pay for daily expenses anymore.
- I have somehow maintained a very good credit rating.
So what was my plan?
- I stopped using credit cards. If I need to use a card for something (mostly online purchases or something where I need the additional protection that a debit card doesn’t provide), I either use a one-time generated card number linked to my checking account from my bank, or I make a payment to the credit card I use (in the rare circumstances I use an actual credit card) in the exact amount of the purchase immediately after I make it.
- I got a second job, with the sole purpose of using that job’s income to pay off my cards. It sucks, because I am constantly working, and my second paycheck every so often is necessary for non-card-related expenses, but mostly, that money goes right to debt repayment. Another way in which I’m lucky is that my second job now is work-from-home, but it wasn’t for a number of years.
- I play “Balance Transfer Bingo.” Between my two cards, I repeatedly receive zero percent balance transfer offers. These usually add a one-time flat transfer fee, but the fee is far less than continuing to carry a balance with any interest rate. I set warnings in advance of the offers’ expiration dates, and have managed to avoid paying interest for about five years now. Paying off principle only makes a huge difference.
- I took a long look at my lifestyle and told myself to cut it the fuck out. There are things I cannot afford. There are trips I cannot take, although I set up a savings account for things like vacations, and if I can set aside enough money to pay for the trip outright, I go. Could I pay off my debt faster if I didn’t take trips and such? Absolutely, but when you cut off all of your creature comforts, you lose a lot of motivation for getting things financially right.
- I pay everything on time, and pay more than the minimum (as much more as I can afford). One late payment could trigger a 20% or higher interest rate, so I can’t take any chances. I automate as much as possible to reduce the chance that I’ll mess it up.
- I give myself a little room for forgiveness. Do I wish I had a time machine to go back and tell 22-year-old me that she’s a goddamn idiot? Oh yeah, but it’s not going to happen, so I accept that this is something I did, something I have to live with and deal with, and stop beating myself up about it so much. Not to say I never do; I plugged my current balance into one of those debt repayment calculators not so long ago and cried for two days, but I try not to do things like that too often.
So how’s it going? Well, I’ve been on the hardcore debt repayment track for about five years. I’m down to less than half my original amount. My repayment schedule is accelerating due to the fact that my second job has been resulting in some pretty good paychecks lately. I still live my life, I don’t deny myself everything, but I realize that digging myself out of this mess is part of my daily life for the foreseeable future, and I just keep chipping away at it.