My 5-Step Plan for Paying Off my Credit Card Debt

By on Jul 29th, 2013 | Daily Grind

On January 1 of this year, my total credit-card debt was $2,448. I resolved to pay it off this year. My credit-card balance has been as high as $5,000 since graduating from college five years ago, so I put a plan in place.

The Plan:

  1. Each paycheck I pay at least $150 toward my balance.
  2. I put myself on a strict daily budget determined by paycheck amount minus bills divided by 14 (number of days until next check). Any extra cash goes toward the balance, including overtime earnings at work.
  3. I cut back on leisure spending.
  4. No more purchases that I can’t pay off that month.
  5. I started with three cards, but I transferred the balance on the card with the higher interest rate to one with zero-percent interest for a year. I pay most of the $150 on the card with the higher interest.

The Strategy

  • Dining. I vowed to cook more meals and dine out less. Gone were the days of weekly brunch with friends. I stopped buying lunch at my office building’s cafeteria every day. For the price of a hot lunch, $6, I could buy the ingredients to make two or maybe three meals. Pinterest offers easy-to-follow recipes and I use coupons as much as possible. I limit myself to drinking mostly water each day. If I go to a bar, I limit myself to one alcoholic drink.
  • Entertainment, Travel and Health. Travel was the most difficult thing to cut back on. I try to stick with in-state road trips and split the costs with others. I bid on hotels online to get the lowest price possible. I also cut back on movies. Instead I use Netflix or wait until the a movie comes out on Redbox. I love the outdoors, so when a friend wants to hang out I suggest free activities like hiking, swimming or a free yoga. I avoided the cost of joining a gym until this month. When I did join, I refused to pay a high enrollment fee; I ended up paying $25.
  • Shopping. In the past six montVisit Sitehs, my only clothes purchases have been a dress and cardigan for  a wedding, a dress for my birthday, two pairs of jeans for cooler weather, and two pairs of shoes that match everything. I’ve gotten creative by bringing back clothes I haven’t worn in a long time and pairing them with newer items. When I do have to buy, I pick low-cost retailers, thrift shops and yard sales. I often look in the clearance section first. When I need something new, I research the lowest price possible online and save for it.

The Setbacks

  • Unexpected expenses. My condo needed new flooring, as the carpet was in bad shape. I took on a DIY tile project with my boyfriend that added $858 to my balance for tile and supplies. This saved us money because professionals charged up to $2.50 per square foot to install it. In March, I found out my tires were in bad shape and needed to be replaced. There went $332. In April, my car’s brakes needed to be replaced. The repair shop recommended more than $600 in repairs, but I opted to only get the parts that were completely damaged, at a cost of $268.

The Results So Far

As of today, my balance is down to $1,100 on just one card. I estimate that I can pay this off in August if I make payments of $300 to $400. This won’t be easy, but if I keep following my rules I will be free of credit-card debt before the year’s out.

Marette Mendoza is a writer and copy editor living in Phoenix. She enjoys travel, fitness and eating, all on a budget. Keep up with her adventures at or on Twitter: @marettemendoza.

4 Responses

  1. Frances Turner August 8, 2013 at 10:51 am

    Absolutely sound advice and I can’t think of better ways to get rid of one’s credit card debt; I especially like the part about cutting down on leisure and spending till you have gotten rid of your debt. All we need is have a bit of discipline.

    • Marette Mendoza July 2, 2014 at 11:48 pm

      Thanks, Frances! I did meet my goal of being free of credit-card debt in August! It wasn’t easy but it felt great.

  2. Sally Thomas August 12, 2013 at 1:07 pm

    This is good advice Marette. Cutting back on expenditure in any way possible is a key tactic along with the formulation and execution of a strict budget. These efforts are critical for a person to deal with what is often the cause of their problem.
    At the same time as getting budgeting and expenditure in order, many people will want to consider how they are going to improve the credit card debt situation that they have. This means the cost and duration of the debt; how well is the debt itself being managed. For example, can the person in debt reduce interest cost through a consolidation loan approach or is a debt management plan worth exploring. There are many options including do-it-yourself repayment schemes such as the debt snowball. Paying off credit card debt with greatest efficiency typically involves a plan (i.e. strategy) that simultaneously deals with or considers both cause (budgeting/expenditure) and effect (managing the debt cost).


Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>