Credit Card Debt

Before starting this blog I spent the past few months learning a lot about how to manage and pay off my moderate, but still very annoying, credit card debt.

There are a lot of different strategies, methods and opinions on paying off credit card debt. It can be very confusing to be reading about opposite strategies – pay off highest interest first, pay off the lowest balance first, pay off the one that makes you feel more accomplished first, etc, etc.

I tried to keep  my process as simple as possible.

In November 2012 I had two credit cards, totaling $3000, each with 19.5% interest rate.

I had never missed a payment and never just paid the minimum but my $100 payment to each credit card per month was never covering the increasing purchases I put on the card. I had the illusion of ‘paying down my debt’ but I didn’t realize that I was putting far more than $100 a month on the cards themselves.

I found Gail Vaz Oxlade’s site, particularly her straightforward method of debt repayment, to be very helpful. Please check it out here!

I wrote down all my balances and the interest rate.

Then I tried to pay at least $200 per pay cheque to the card with the highest balance, in an effort to save myself more interest. I paid the minimum on the other card and did not use it, period. In addition, every time I had money left in the bank the day before my next pay, I ‘rolled it over’ to my credit card debt. This really kept my motivation high and really started to add up.

What was very helpful for me was that I wrote down every single time I made a payment on my credit card, or every time I used it. I also left both credit cards home regularly, so I was not tempted to put impulse purchases on either card.

Previously I had seen any room on my credit card as cash in hand available to spend, so leaving the cards at home underlined that my money was only the money I had in the bank. 

Every month I would total how much I had paid to each credit card.  All money I got for gifts went to the cards.

From November 1st to Dec 26th (yes, including holiday gifts and travel), I managed to pay off both credit cards in full.

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