Getting out of Debt

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When I was in my early 20s, I was carrying a huge credit card debt of about $27,000. No one taught me about finances and I just bought whatever I desired without any financial accountability. The truth is I didn’t even know how much I owed in credit card debt. You want to know why I didn’t know how much I owed – I was afraid to look at it.

I lived in denial paying only minimum balances and late fees. In general, to address any problem, you must first accept that you have a problem, then you must quantify it, and finally face it head on, especially debt.




Accepting and Quantifying Debt:

Soon, all my credit cards were maxed out. Finally it dawned on me that something needed to be done. So, I opened a spreadsheet and listed all the credit cards I had and how much I owed on each of them. The total came to a whopping ~$27,000. Accepting and Quantifying was completed.


Facing Debt:

Here are the radical steps I took to get out of debt:

  • Locked away all my credit cards. I carried only one credit card in wallet for any emergencies.
  • Went on a total spending freeze – cut Cable TV, cancelled my cell phone (yes I really did), rarely ate out. Anything I could live without, I cancelled.
  • Friends would invite me and my wife to eat out after church – I would politely decline and say that I was paying off debt and couldn’t afford to eat out. People understand and respect you when you say that. It took a lot of  courage and humility.
  • Accounted for every penny I spent – yes I logged all my expenses to a spreadsheet.
  • Put a budget together, lived within my means, and stuck to the plan.
  • Paid for all expenses using debit card and checks.
  • I used the surplus at the end of the month to pay off credit cards.
  • Paying Off Credit Cards:
    • I started with the card that had the least balance. I believe it had a balance of about $25o. I paid it off, cancelled it, cut it up, and threw it away. This was my first victory. This gave me a morale boost and pumped me up on the journey.
    • Then I tackled the one that had a higher balance.
    • Eventually I got down to the last two cards with the highest balances. By this time, my credit union believed in me and helped me consolidate my debt into a single personal loan. The interest rate on the loan was orders of magnitude less than how much the credit cards were charging in interest.


I had accumulated the debt over a three year period. I spent the next three years of my life paying off debt. As soon as I paid of my last credit card, it felt so good to be debt free. It felt like I had my head above water and I was able to breathe air again. I had accumulated this debt when I was single. My wife was very supportive all through this time and was extremely supportive and helped in managing and paying off the debt. I am extremely thankful to have a wonderful, wise, and supportive spouse.


A few final comments:

In Oct 2015, according to Nerd Wallet, “The average US household credit card debt stands at $16,140.” If you are in credit card debt, I hope that you make the choice today to get out of debt and out of this statistics.


Get out of Debt: If you want to get out of debt, you could follow my approach. How drastically you cut down your living expenses depends on how badly and how soon you want to get out of debt.  Imagine that you are a bull fighter and debt is the bull. It is either you or the bull that is going to walk out of the arena. I say, slay the bull!


Stay Debt Free: After you pay off your debt, continue to pay all your bills and expenses using your debit card, checks, and online bill pay that is linked to your bank account. Live a debt free lifestyle for at least 3 years so that it becomes second nature to you. Then consider using one credit card in a responsible way by paying balances off on a monthly basis. You get only once chance. If you don’t pay off your monthly balance in full, then you aren’t ready for credit cards. Go back to using debit cards / checks / online bill pay.


There are plenty of banks that offer reward and cashback checking accounts 100% free of charge and even give free unlimited checks.  I have highlighted one of them here – Discover Online Savings account offers 0.95% APY and Discover also offers a free checking account with unlimited check writing and cash back. Check it out and see if it suits your needs.


I cheer for you to get out of debt!



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3 thoughts on “Getting out of Debt”

    1. Hi Paula,

      Welcome to Stretch A Dime! Thank you for your comment. Yes, I agree with Dave Ramsey’s approach for paying off credit card debt – when you pay off smaller credit card debts first, it builds confidence to take on the bigger ones.


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