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Wanna know what it feels like to have ZERO credit card debt?

by J. Money on Monday, June 23, 2008

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It feels GREAAAAAAAAAAAAAAT! (in the voice of Tony the Tiger). I know this because the Mrs. and i JUST paid off all 3 outstanding credit card balances today. That means no more interest charges, no more budget fenagling, and especially no more annoying bills to pay ;)

While it doesn’t feel all that *different* per se, my brain does feel a bit more organized and clearer. I think it’s just nice overall knowing that the only debt we have left right now is our mortgages and car loan. Unfortunately this will only last through August when Mrs. Budgetsaresexy starts grad school – yikes! The word on the street, though, is that it falls under “good debt”! haha…i agree it’s def. better than c/c debt, but it’s still not fun .

Either way, you need a solid game plan when it comes to defeating those evil credit cards.

Don’t get me wrong, I’m a HUGE fan of credit cards in general – i charge everything i can to them, and then *usually* pay the balance off in full each month using my c/c budget – but what i’m NOT a fan of is recurring balances and the fees/charges assigned to it. When I find myself in this nasty territory, I set up a game plan and get the F outta there!

Here’s the 4 steps we followed to sneak outta credit card hell this time:

  1. We set up a time frame. It’s hard to reach a goal without a marked finish line, so we decided that we wanted to be c/c debt free in 1 year. This started last November for us when we picked up our new iMac, and continued as we added a little more debt along the way. (most at 0% financing, but it’s still debt)
  2. We took a look at our budget. I knew there was no way in hell we were gonna pay it all off until we figured how where this money would come from. Since I already had a sexy little budget to rely on, i pulled it up and started re-working it until I couls squeeze an extra $100 a month out of it. This Benjamin, matched w/ the Mrs.’, would be enough for us to reach our 1 year goal.
  3. We applied the alotted money efficiently. The trick is paying off the highest interest cards first, and paying the minimum on all others. Some prefer paying off the smallest amount first to get quicker accomplishments along the way, but it didn’t make sense for us. So we paid $30 or so towards minimums, and then $170 to the card with the highest interest rate…which at the time was only 5% ;)
  4. We applied unaccounted for money towards the cards. This was the final killer! We used a good portion of our $6k wedding money to pay off all remaining balances, despite the urges to refurnish our house or pick up a sexy new pair of Dolce and Gabbana shades!

So after some re-budgeting, patience, and good fortune, we are now c/c debt free and ready to start saving that extra money! That is, after we take a month or so to enjoy the spoils first :)


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