Credit card debt is one of the most common forms of debt for Americans. It is often a result of getting caught up in the vicious cycle of overspending or not managing your money properly. It happens to a lot of us. Sometimes, credit card debt can be due to your spending issues or even your partner’s.
My husband and I recently cracked down and paid off $4,000 in credit card debt in less than 90 days and freed ourselves from that debilitating debt.
Before I discuss how we did it, here’s a little back story.
How a $4,000 Credit Card Debt Balance Crept Up On Us
I’ve personally never had any credit card debt. Even if I overspent on my credit cards each month, I paid the bill in full each time because I usually had money leftover thanks to living below my means. When my husband and I were dating, he had a few credit cards and didn’t pay much attention to his spending unfortunately.
We also split daycare expenses for our son which was charged on one of his credit cards each week which always made us feel like he was carrying a balance no matter how much we paid. Long story short, some expenses became difficult to keep track of, and while we didn’t take on any debt regarding our wedding we added up our joint debt total before getting married and realized my husband had about $4,000 in credit card debt.
We were shocked and a little scared to be blunt, but we knew we wanted to get rid of the debt asap and avoid paying as much interest as possible. We did a few key things to pay off $4,000 in credit card debt after less than 3 months of marriage.
We Used the Avalanche Method
Choosing a clear method or strategy to help you pay off your debt is key. To decide on the best method, consider your habits, goals, and your current cash flow situation. For us, we knew we didn’t want to pay much interest so the avalanche method seemed best.
There were 3 credit cards and one of them was still on a 0% interest promotion. We started by paying off the credit card that was costing us the most money first. It just happened to be the one with the highest balance and highest interest rate.
Then after that card was paid off, we rolled the money we had available for debt payments to the next most expensive balance until all the balances were zero.
We Used Gift Money Wisely and Prioritized
We received a generous amount of monetary gifts for our wedding. We used a little of the money for our honeymoon and a large portion of it went directly toward our credit card debt. It stung a little to put so much money toward debt when we could have done something else with it but we were committed to our priority and our end goal (debt freedom).
Aside from using our gift money, we prioritized paying off credit card debt whenever we got paid. It was practically the first bill we paid and we were happy to do it. All of our other expenses were paid for with money we had leftover and this was a fool proof way to make sure we eliminated our debt quickly.
We Lived on One Person’s Income
Maximizing how much extra money we could put toward our credit card debt was key. We decided to live off one person’s income and use the other income to make extra debt payments to speed up the process.
We created a new budget to stick to and kept our impulse purchases to a minimum in order to make it work.
Now That the Credit Card Debt is Out of the Way…
We still plan on living off one person’s income for as long as we can since we still have other debt to pay off, but it feels great to be credit card debt free again! My husband and I are thinking about closing some credit cards we no longer need anymore to avoid getting back into credit card debt and we’re committed to living well below our means.
We are hoping that we can continue to save more and work on knocking out my husband’s car loan next.
Do you have credit card debt? What is your strategy for getting rid of it?