I’ve talked in passing about paying off my credit card debt a few years back, but now it’s time to get to the nitty-gritty, to spill the details on how I said sayonara to debt once and for all. Let’s talk numbers:

  • Number of credit cards = 3
  • Total amount of debt = Php150,000 more or less
  • Total amount paid = Php200,000 more or less
  • Time it took = 5-6 months

I wrote about the reason why I got into debt here so I will no longer dwell on it, but let’s just say that while other people sigh and swoon over weddings, I cringe at the expense it took to mount that production.

Here’s what we faced after getting married:

  •  Wedding related debt
  • I was accepted at my current job a few weeks after we were married but it took about 1-2 months before I received my first paycheck.
  • My husband had collectibles from an MNC which were already months delayed

We were so broke that I had to borrow Php5,000 from my parents to pay for the required medical exams for my job application and I eventually had to borrow Php20,000 from my cousin just to get by.

However, we weren’t totally without cash because I still had my writing gig, but that just about covered our rent and car payment. Everything else that could be charged to my credit card were bought on credit, leading to more credit card debt. Talk about a slippery slope.

To fully pay off my credit card debt I:

  1. Said YES to every legitimate money making opportunity that came my way. God really does work in mysterious ways because almost a week after we were married, when I was seriously stressing out over money, an online job offer came my way. Whereas before I would have wavered over whether or not to accept, this time, I didn’t have that luxury so I pounced on it and forced myself to learn the skills needed for the job as I went along.
  2. Used the snowball method. I paid 2-3x the minimum of the statement with the biggest balance and paid the minimum for the other two credit card bills. When I fully paid off one credit card bill, I moved on to the next bill with the bigger balance, paying more than the minimum until it was also fully paid off and did the same with the third credit card.
  3. Made a money plan and stuck to it. My money plan was essentially a ledger where I would write down my projected income vis-a-vis all our expenses. By running the numbers and tweaking them over and over whenever I would receive a windfall at work, I saw that I could pay off all my credit card debt in less than six months.
  4. Brought my own lunch. This was around the time when I realized that little expenses added up and that by simply bringing my own lunch, I could save at least Php2,000 monthly and funnel that amount towards credit card payments.
  5. Cut up one credit card after it was fully paid. I did away with my Mango-RCBC card because instead of a yearly fee, it had a monthly fee which RCBC refused to waive. I actually only need one credit card, but my supplementary card has a Php180,000 credit limit, perfect for charging international tickets with if the need arises. Nonetheless, the moment my principal card reaches a credit limit of Php100,000, it’s goodbye to my supplementary card as well.

Looking back now, I could have minimized the financial charges I incurred if I called my bank and requested for a loan restructuring. But my masochistic streak showed its ugly head and I forced myself to swallow every peso of the finance charges to drive the lesson home. And what a lesson it was. I’ve been debt free for almost three years now but I still remember how desolate I felt during those days and how exhilarating it was to pay off my last credit card bill.

Furthermore, I carried  the frugal ways I developed during those debt payment days to my post-debt life. When I was in debt,  I stayed home with my hubby and surfed a lot to read everything I could about personal finance, including tips on getting out of debt. Knowing that there were other people out there similarly situated and who successfully got out of debt really inspired me. Their simple lifestyles also resonated well with me and I started paring down my belongings and giving away the swag I would receive because of my beauty blog.

I still read up on all things personal finance, but now instead of debt reduction, I keep myself informed on the different ways to grow my money and read up on stories of those who achieved early retirement (by 40!!) to inspire myself.

Forget all the glamorous images pushed by credit card companies, credit card debt is the worst kind of debt, the type that just keeps on growing unabated. Better to live a non-aspirational life than a Pinterest worthy one funded by debt.

8 Comments on How I Demolished My Credit Card Debt

  1. PINASforGOOD
    December 21, 2013 at 2:46 pm (4 years ago)

    Wow, very nice and very inspiring!

    It does feels good and liberating not to be a part of a world full of consumerism. Now that I have become/trying to be a minimalist, it's a nice feeling to walk away and say goodbye to all the stuffs that clutters my life.

    The funny thing is, nowadays, I am reading about debt-reduction books, even though I don't have any debt-related problems, coz I got bored na on all frugal living, investing, saving and any finance book in general. They offer the same tactics and I got so bored with all of the redundant advise.

    Since I love reading about anything debts and how people eventually get out from it, I am totally digging your post!

    Reply
  2. Jillsabs
    December 23, 2013 at 3:18 pm (4 years ago)

    Thanks!

    I like reading lifestyle blogs with emphasis on thrift, DIY and home making. Kinda like a frugal Martha Stewart:p

    Reply
  3. Rae A.
    January 21, 2014 at 12:09 am (4 years ago)

    Grabe, ang sarap ng feeling no? I also paid all my debts in 2013 (not including housing loan). Hindi ko nga alam na pwede pala magpa-restructure. Oh well. At least tapos na. Nakahinga na ng malalim.

    Reply
  4. Jillsabs
    January 21, 2014 at 12:19 am (4 years ago)

    It was actually anticlimactic when I finished paying off all my credit card debt, I half expected balloons to suddenly materialize or something like that.

    I wanted to celebrate by going out to eat and then charging it to my credit card, with the real treat being that I could pay it all off the following month and have zero balance for the first time in half a year 🙂

    Reply
  5. Bee
    November 18, 2016 at 12:05 pm (1 year ago)

    Backtracking all your Debt Management post.

    For this month, I’ll pay 2x the minimum + the finance charge.

    Reply
    • Jillsabs
      November 18, 2016 at 3:45 pm (1 year ago)

      Hi Bee,

      That’s the way to go! Just keep on chipping away at your debt and throw all the excess money you can come up with at it, before you know it, you’ll be debt free. You can do it!

      Reply
      • Bee
        November 18, 2016 at 5:33 pm (1 year ago)

        Did you ever set aside a small amount as ’emergency fund’ as you were paying off your cc debt? I’m thinking of keeping kahit 10k lang a la cookie jar fund. Anyway, thanks so much for responding to my comments/questions. Seeing that you went through this gives me comfort that by this time next year wala na akong utang.

        Reply
        • Jillsabs
          November 22, 2016 at 10:48 am (1 year ago)

          Hi Bee,

          I didn’t have a separate account for my emergency funds back then, but I always made sure never to zero out my savings account, even if it meant not paying off my credit card in full. I would rather have the extra cash as reassurance, even if it meant paying bank fees. Silly I know, but it gave me some peace of mind, so it was worth it.

          Reply

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