Credit card debt crushers | finder.com

Credit card debt crushers

6 inspiring stories to pulling yourself out of debt.

With the nation’s total credit card debt sitting at a whopping $815 billion, with 8% of that debt overdue for 90 days or more, a small piece of plastic can feel like a giant weight for many Americans.

According to data from the Federal Reserve, if that debt were spread evenly across all credit card account in the US, each of our cards would carry an outstanding $1,741.35. In reality, however, individual debt is much, much more.

While it can be hard to see light at the end of the tunnel, getting out from under debt is possible. It just requires a lot of dedication and discipline.

To prove it, we’ve rounded up a handful of Credit Card Debt Crushers who managed to get back in the black with their finances. By passing along their strategies, they hope to get you there too.

19LongName: Kelsa and Michael Dickey
Paid off: $67,000
Blogs: Financial Coach Academy and Fiscal Fitness Phoenix

Kelsa and Michael successfully paid off $67,000 and now live with no debt, except for a mortgage.

Well on the road to financial freedom, they’ve now made it their mission to help others work toward living a debt-free life. Over the past 10 years, Michael and Kelsa have coached their clients to pay off an average $22,000, with the most paid off a high $215,000.

When it comes to paying off debt, they focus on four strategies to motivate nearly any personality.

Strategies
  • The snowball method can provide quick wins, which is good for people who need constant motivation to overcome negative thoughts that come with paying down debt. With this strategy, you prioritize your debts from the highest to lowest balances. Focus on paying off your minimums across debts, contributing any excess in your budget to your lowest balance. When that’s paid off, move to the next lowest.
  • The avalanche method is good for those paying high interest on balances each month. With this strategy, you prioritize your debts by those accruing the most interest. You pay the minimums across debts, contributing extra cash toward the one with the highest interest rate until it’s wiped clean. After that, you move to the next highest interest rate.
  • If your monthly budget is tight, the Kiyosaki method might be worth a try. This strategy calls for prioritizing accounts by the highest monthly payments. You pay the minimums across your debts, contributing any extra in your budget to paying off the most expensive payment monthly. Once paid off, you move to the next most expensive.
  • If your debt is so overwhelming it affects your everyday mood, the emotional baggage strategy might help you take on a more positive attitude. Focus on that one debt that makes you angry or sick to your stomach, and then put all of your money toward paying it off.

Kelsa and Michael Dickey are the founders of Fiscal Fitness, a business that helps people take the stress out of money, and Financial Coach Academy, an online community and financial training program.

19LongName: Kelly Hayes-Raitt
Paid off: $90,000
Blogs: House Sit Diva

By 2001, Kelly Hayes-Raitt had racked up $90,000 in credit card debt. She paid off her last balance in April 2010 and now lives debt-free, except for a mortgage.

After 9/11, Kelly found her business headed in a negative direction. Determined to stay optimistic, she kept her employees for one day too many with the help of credit cards.

Faced with $90,000 in debt, Kelly developed a unique strategy to pay it all off — and she ended up discovering a long-term career along the way. In the beginning, Kelly focused on keeping her interest rates as low as possible, moving balances among cards offering 0% intro APRs. But she realized in 2008 that her credit was at risk of “drying up” and knew a drastic decision was in order to increase her cash flow. And so she rented out her own home for income and became a “house sitter,” whereby she lived rent-free in exchange for caring for people’s homes and pets while they were on vacation.

Although Kelly’s method is extreme for many, it highlights a strategy that nearly anyone can benefit from.

Strategies
  • Assess and monetize your assets. If you’re struggling with a large payment, take a step back and ask how you can turn it into a profit.

Kelly Hayes-Raitt is the author of How to Become a Housesitter: Insider Tips from the HouseSit Diva.

19LongName: Sumit Bansal
Paid off: $8,000
Blogs: Craft of Blogging

Sumit Bansal took a leap of faith — and a large cut in income — when he left his job as an IT marketing manager to pursue his own business. He was able to make ends meet early on, but he hit a financial barrier when he realized he’d overlooked the true cost of growing a blog. With operating costs mounting, Sumit found himself more than $8,000 in credit card debt.

The expenses were necessary to develop his business, but Sumit was ready to curb his debts’ growth. Overall, he knew he needed to reduce his expenses while increasing his income. He audited both his personal and online business expenses, slashing those that weren’t critical for growth. He then worked on increasing his income by developing an online course and promoting affiliate products.

Asked for advice he’d give others looking to take charge of their credit card debt, Sumit offers three universal tips.

Strategies
  • To get a better look at your spending history, start with an audit of all your expenses, going back three to four months.
  • Plan for financial success, and look at the week ahead. Set a spending budget for the week, adjusting it accordingly to prevent exceeding it.
  • Make it a habit to be conscious about your spending, and question every expense you make.

A blogger for more than three years, Sumit Bansal is the founder of Craft of Blogging, which teaches people how to start and grow their own blogs.

19LongName: Brian Davis
Paid off: $12,000
Blog: Spark Rental

Finding himself $12,000 deep in credit card debt, Brian Davis was motivated to regain a clean financial slate. But he needed the discipline to get started.

Brian took a step back to discover how he could simultaneously minimize every expense while also maximizing his income. It took a lot of willpower to spend only a fraction of his earnings each month, but he was able to pay off his debt in a mere eight months.

Here’s what Brian recommends to tackle your own debts.

Strategies
  • Calculate your after-tax income for four weeks, and give yourself a savings goal that’s almost out of reach. Take that goal and then subtract it from your after-tax income. This is your monthly allowance.
  • Figure out how to make your monthly allowance work. This might mean finding a roommate, giving up cable or even looking for a cheaper place to live, if moving is feasible.
  • Halt the barhopping and restaurant outings until your credit card balances hit $0.
  • Take the number you’ve set for your saving goals, and set up automatic biweekly payments to your credit cards. Make sure the payments are withdrawn on payday to eliminate the temptation to spend.
  • Cut, tear or shred your credit card until you’ve successfully paid them off.

Brian is cofounder of Spark Rental, where he writes about personal finance, real estate investing, passive income and financial independence. He’s also served as a real estate expert for Forbes, USA Today and MarketWatch, to name a few.

19LongName: Patrick Antinozzi
Paid off: $14,000
Blog: RapidWebLaunch

After assessing his finances, Patrick Antinozzi knew something had to change. He began redeveloping his budget, cutting out luxuries he couldn’t afford, like eating out, alcohol and entertainment. He even swapped his cafe stops for a home-brewed blend.

Importantly, he took on a personal loan, transferring his high-interest 19% APR to a low-interest credit card offering a 10% APR. By drastically reducing his monthly payments, he crushed his debt in just seven months.

But Patrick didn’t stop there: Eager to get back in the black, he took on a side gig alongside his full-time job in marketing, leading to his now full-time gig at Rapid Web Launch.

Patrick shares tips you too can take on to smash your credit card debt.

Strategies
  • High-interest rates weigh you down most, so consider tackling those first.
  • Research balance transfer credit cards or personal loans to see if there’s any way to get that monthly payment down.
  • Finally, get creative — whether it’s taking up a side gig or cutting luxuries out of your day-to-day.

Patrick Antinozzi owns Rapid Web Launch, a fast and affordable web design company.

19LongName: J.R. Duren
Paid off: $22,000
Blog: HighYa

After J.R. and his wife married, they found their debts totaling $22,000. They dedicated the first 18 months of their marriage to paying off their debt using the extra $1,000 leftover each month from their paychecks, but they lacked a plan and a deadline. They were able to pay off half their debt within that time, but it was too slow a process for them.

With focus, they nailed down a nine-month step-by-step plan to meet it. They adopted the snowball method, paying off their smaller balances first, and moved their larger balances to a 0% balance transfer card to save on interest. In 27 months, they were back to debt-free living.

Here’s what J.R. recommends to tackle your credit card debt.

Strategies
  • As standard as it sounds, to understand how much breathing room you have between your cash inflow and outflow, you need a budget. Included in your budget should be your fixed and variable costs.
  • Dedicate a deadline to paying off your debt. No runner sets out on a race where there’s no finish line.

J.R. Duren is a personal finance analyst for HighYa, a website that helps consumers learn about products and services, read reviews from actual customers and educate themselves through informative articles.

Ready to crush your credit card debt? Get started with these simple tips:

  • Improve your score.
    A major burden of credit card debt is the high interest we get hit with monthly. A good to excellent credit card score shows lenders you’re a reliable borrower, giving you a better chance of scoring manageable rates. By making regular payments, paying more than your minimum or working to clear your high-balance cards, you can bump up your score while simultaneously reducing your credit card debt.
  • Consider transferring your balance.
    If your high interest rates hit hard each month, a balance transfer credit card can help you take back control. A low- or no-interest period offers breathing room as your work out the kinks in your budget. But carefully read the terms and fees associated with each transfer, and know what you face after the introductory period ends.
  • Change your mindset.
    No matter how you landed yourself in debt, you must take on a can-do mindset to get out of it. A solid first step is a firm understanding of the type of debt you have. Look at debt as another obstacle to overcome.
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