A credit card is one of those debt channels that only needs a little indiscipline to become a huge burden on your finances.
That was how I found myself owing $12, 000 in credit card debt in 2018, and I climbed up to that just within two years. That suggests two things. I’m either spending far beyond my capabilities, or I’m an indiscipline low earner.
The two have their respective roles to play. But at the point I was last September, the blame game was no longer sensible. I had to pay this off, before risking legal consequences.
Considering that I wasn’t earning much, this would mean a lot of changes, in work and lifestyle. So, I set out to give this all I’ve got, so I can be debt-free within the shortest period of time possible.
Now, let me share with you how I managed to escape this debt clutches within three months (90 days).
$12, 000? How the debt came about
I agree that I outspend my purse in many ways within the two years. Yes, I was living on a $4, 000 monthly take home in Chicago, with about 25% of that going to rent each month. But that’s just a part.
I had refused to be limited by my income in getting things I needed, from clothing and groceries to household stuff, movie nights and a trip to my parents’ in Cincinnati. My life was going, and the bulk of that was being sponsored by my credit card debts.
I was already reaching for $7, 000 in debt by September 2017. The next one year added another $5k liability to my name. Blaming my low income, I’ve been focused on off-setting the interests on the debt.
Before I knew what was going on, the real debt figure is about to cripple me financially.
The Tough Decision
To start with, I made up my mind to stay off credit card until this $12, 000 is paid off. That was both tough and excruciating, but it’s something I’ve got to decide.
Imagine raking up another $5, 000 in debt during the three months that I planned to repay the existing debt. It makes no sense, right?
And again, what could be more embarrassing than having to deal with such heavy figures on credit card debts? I couldn’t even talk about it with friends. So, I was stuck with the worries that come with being indebted.
That alone was enough impetus to drive my decision to free up myself. What’s worse was that I was stuck with the poorly-paying job because the debt bills couldn’t just be excused.
So, I couldn’t even take out enough time to hunt for something better.
I Decided to Refinance
Now, this proved very important to my journey to becoming debt-free. Most of my credit cards, expect the zero interest ones, could be doubled in a year, no thanks to heavy interest rates.
So, to cut down on these rates, I decided to refinance with another lender with much lower rates. I chose Credible, whose rates were 5% with autopay by then.
The benefit here is that I don’t have to settle huge interest rates, while the real debt stays on, not hesitating to remind me that I’m an incurable debtor. The focus is to clear the main bills as quickly as possible.
How Long Did This Take Me?
It was September of that year. I thought I had a little over three months to go in the new year. So, I thought to myself, why not drive myself hard to clear this debt along with this year? I decided there and then that I won’t leave 2018 with the debt.
At that moment, I had to sit back and begin to think of how I can achieve this within my 90-day timeline. But my worry about accountability was still there. This won’t be the first of similar resolutions, so I didn’t want to fail again.
I had to speak to one of my friends to keep a tab on me as I journeyed through the debt settlement. That was a huge push for me. I could accept failure on my own, but I wouldn’t want to create a negative impression.
I Became Really Frugal
You’ll agree that my situation would remain the same if I couldn’t decide to end my spending spree. The negative impact was already evident in my debt profile. So, I decided that, for this period, I would incur the least possible expenses.
I gave up my shopping taste. I’ll be sincere. That was my lifestyle. The pressure to be trendy and meet-up with peers was quite huge on me that I blindly buy stuff just for the sake of having it.
It was a real drain on my credit card. So, I decided to put a stop to my pointless spending, using these 90 days as the trial period. To begin with, I reversed my materialistic nature. I had to unless I want to risk declaring personal bankruptcy some day.
Virtually, most of these things aren’t necessities. So, why waste resources? It was a key sacrifice I had to make. I cut down on the ice creams, frequently eating out and clothes shopping.
Definitely, I still treat myself to good moments. But that would only be from a small amount carved out separately for that purpose.
On my full-time job as communications personnel with a manufacturing firm in Chicago. I made my normal $4k from that, with all taxes on the firm.
From this, it practically makes no sense to expect to repay $12, 000 debt with the $3k I’ve got in a month (having deducted the $1K rent). That means I’ve got to have some side hustle to augment that earning.
That’s a huge plus to my goal. So, to earn extra money, I channeled my content writing and customer relationship skills into some side hustle.
I wrote on freelance websites including UpWork, and I also got myself some virtual gig for customer liaison. The two brought about a 1, 500 bucks to my earnings each month. Imagine what that will do for me at that moment.
That was a plus, but It wasn’t enough. I remembered I’ve got an extra room in my home. So, I decided to let it out for a roommate. It was basically for the three months – October to December.
I managed to get myself a fantastic deal with that. I gave up some privileges for her (the roommate), and made her cough out $1000 each month. That’s all I needed for my rent.
I had thought that, with the rent out, and an additional $1, 500 from my side hustles (which usually exceeds that figure), my main income could go into debt repayment for these three months.
Let’s just say I did pretty much anything to make extra money during this period to finance my credit card debt. There was even a time prepared a communique for a local politician. Got some bucks from that too.
My Handy Resources
Now, despite all the strategies I’ve put in place to clear this debt, I still needed to ensure I’m achieving my goals, with each passing month. This is key, to ensure I remain on track.
To begin with, I made up my mind that I won’t touch the main income, and my accountability partner knows about this. So, if I needed additional income, I would tell myself to scale my side hustle. That actually worked. A lot.
Then, debt repayment trackers are handy for me to use. With many things off my budget, I ensured the repayment takes the front seat.
Of course, this approach to debt repayment couldn’t have been easy. I basically had to deal with motivation to keep on moving.
What I do to solve this is to picture myself freed from this debt. It’s a relief to know that I can actually start doing stuff I like with my money, and completely free from debt worries.
Then, I had to battle fatigue. Juggling three jobs was nothing short of difficult. I had to sacrifice a lot of time, and fun moments. It’s like all of my personal time was devoted to this. But it was worth it eventually.
The Debt-Free Feeling
The most beautiful thing about paying off this credit card debt is that I achieved it exactly the way I wanted. I was on top of the world, knowing that it eventually went down with 2018.
During this period, I was already making no less than $6k, after all major expenses are cleared. It was like a complete transformation. I had to keep some of the jobs, just that I freed up some more time for myself. Notwithstanding that, the experience was a game-changer.
That’s how, in 90 days, the credit card debt of $12, 000 was completely settled.
If you’re in the same situation as I was, you can also do this. Start by deciding that, whatever it takes, you want to be free from the debt.
Now, all of us are different. You may not be as aggressive as I could be. Yours could take a bit longer. What’s important is setting a goal of when and how you’ll repay that loan within the shortest possible time.
Why wait any longer? Go ahead, and clear that debt!