Paying off credit card debt is an essential step to gaining financial freedom. You need to acknowledge that if you are in credit card debt. Credit card debt will always hold you back. You will become a slave to your credit cards if you don’t pay off that debt.
Everything I’m saying about paying off credit card debt is true. I was a slave to credit cards. I opened my very first credit card when I turned 18 because I wanted a pair of shoes and I didn’t have the money to buy them. The credit card company lured me in with the “no interest for 90 days” gimmick.
I was determined to pay off the balance in 90 days so I didn’t gain the interest. Well, life happened and I didn’t pay off the credit card debt in 90 days. This was the beginning of me becoming a slave to credit cards.
I continued to open up credit cards and figured I would pay them off later when I had more money. A few years later I got married and my husband had credit card debt too. He had the same thought process as me.
“We will pay off the credit cards later when we have more money”
This exact phrase kept us in credit card debt for several years. What a dangerous phrase! The truth is, we were never in a place financially where we could get out of debt fast. We were starting a family and getting our careers in place. Paying off our credit card debt went on the back burner.
If what you just read sounds familiar, you are in the right place. My goal is to help you learn how to pay off credit card debt. I’m going to share the best way to pay off credit card debt.
We were tempted to use a credit card consolidation service but we didn’t want to damage our future. They say it doesn’t affect your record but that’s hard to believe. We will always have consequences from our mistakes and we need to take responsibility and fix them.
We ended up having over $35,000 in credit card debt by the time I was 29. We had 3 kids that were under 4 yrs old. Life was busy and expensive. My husband and I were working 40 hours or more a week just to get our bills paid. We were paying the minimum on our credit cards.
Later in 2008, the Lord got a hold of my heart. The Lord was calling me to my first priority in life, Jesus (Hebrews 10:25), I needed to spend more time with Him and hold onto His promises. I needed to be a good wife (Ephesians 5:22), and a good mother (Deuteronomy 6:5-9).
After lots of prayers, we decided to make major financial changes in our life. The first major one was me being a staying home mom and learning how to live on one income. Then it was paying off over $55,000 in credit card debt (It’s so scary to type that), downsizing our home, and selling our fun stuff.
The hardest change for me was being a stay at home mom, I never thought I could do it. But God gave me the strength and had a plan for us. We ended up paying off our credit cards in a little over 3 years.
Through this process, I learned the best way to pay off credit card debt. It wasn’t with credit card consolidation. Choosing to change the way we were living is the secret to paying off credit card debt.
Pay Off Credit Card Debt Infographic
How to Pay Off Credit Card Debt
Listed below are the changes we made to get our credit card debt paid off. We don’t have a magical story where we made extra income from a blog or side hustle to get it paid off in 6 months. This is the reality of what it takes to get your credit card debt paid off.
1. Get Your Finances in Order
This is the very first step to paying off credit card debt. If you don’t have your finances in order, you can’t set a goal to get your debt paid off.
We sat down and listed everything we were paying for each month. We listed the creditor, interest, payment date, monthly payment, and balance. If you want the form for this, you can download a free printable by clicking on this money management tips link.
Seeing your debt all in one place makes it easier to get your debt paid off. Don’t be overwhelmed by your debt. Take ownership and set your mind to getting it paid off.
Getting our finances in order made paying off our credit card debt a reality. It motivated us to get it paid off.
2. Make a Monthly Budget
Once we had our finances written down, we made a monthly budget. If you want financial freedom, you need to have control of your money. The only way to do this is by making a monthly budget.
Once we got comfortable with our budget on paper, we moved to a free online budget app. The budget app allows us to see all our finances on our phones. We find it much easier to manage our budget electronically. It’s really whatever works best for you.
Creating a budget we were comfortable with allowed us to get our debt paid off quicker.
3. Choose a Method to Pay Off Debt
Making a plan to pay off your credit card debt is important. You need to choose a debt pay off method and stick with it. Seeing results will keep you motivated to get it paid off.
Paying off debt can be emotional and stressful. It’s important to realize that you are doing the best thing for yourself when you are paying off debt. It was hard but it’s a blessing to be on the other side it now.
Here are two of the most popular debt pay off methods:
Debt Avalance Method
- Make a list of your credit card debts sorted by the highest interest rate. The balance doesn’t matter.
- Make the minimum payment on all your credit cards except for the one with the highest interest rate. Put the most money possible on the highest interest credit card.
- Once the highest interest credit card is paid off, start paying off the next highest interest credit card.
- Follow this method until your last credit card is paid off.
Debt Snowball Method
- Make a list of your credit card debts sorted by the lowest remaining balance. The interest rate doesn’t matter.
- Make the minimum payment on all the cards except for the one with the lowest balance. Put the most money possible on the lowest balance.
- Once the smallest debt is paid off, move that payment to the next low balance.
- Follow this method until your last credit card is paid off.
We chose to go with the Debt Avalance Method which is paying off the highest interest rate items first. Choose whatever works for you.
4. Control Your Spending
Learning how to pay off credit card debt goes hand in hand with your spending habits. If you spend more than you make, you won’t have any money to pay off your credit cards.
We had to cut back in many areas so we had the extra money to get our cards paid off. Learning the difference between “needs” and “wants” is so important.
Realistically, you will have “wants” every month and that’s ok. We had to make our “wants” very small so we chose to keep eating out after church in our monthly budget. It’s something we really enjoy doing as a family.
Look at your budget and make sure you have limited your “wants” so you can get your credit cards paid off.
5. Learn How to Save Money
Choose some ways to save money that work for you.
6. Make Your Meals at Home
Eating at home is a huge money saver. I make dinner every day of the week, except for Sundays (we eat out on Sundays). Making a weekly meal plan has helped me so much.
I have so much to do every day so having our meals planned out makes it so much easier. I don’t have to think about what I’m making for dinner every day.
7. Earn Extra Money
If you are a stay at home mom like me, there are legitimate work from home jobs that may fit your schedule.
It’s important to know that you shouldn’t be compromising your family time. Don’t make yourself so busy that you can’t spend time with your family. Your credit card debt will get paid off if you stick to your plan.
Paying Off Credit Card Debt is Important
Learning how to pay off credit card debt is important if we are walking with Christ. We are called to be good stewards of money (Matthew 25:14–27). Financial freedom keeps us from being a slave to money.
God created us and He tells us that we cannot serve both God and money (Matthew 6:24). This doesn’t mean having money is a bad thing. It’s the “love of money” that causes the problem.
If we allow money to take God’s place then we are in big trouble. Unfortunately, this can happen if we don’t manage money properly.