Thursday, October 8, 2009

I Am Now Officially Credit Card Debt Free

I’ve carried a balance on my credit cards since 1995, while attending law school. I didn’t have an income at the time and I was living off my student loans, but I still had a certain lifestyle I wanted to maintain. It started with $20 here for dinner, $100 there for a trip to Vegas with my buddies, $10 for movies, etc. I wasn’t too worried – I’d be okay so long as I can make the minimum payment every month.

After I graduated, I had new “needs” like snazzy power suits, shoes and purses to wear to court. The increase in my lifestyle costs dramatically outpaced my income during this period. I needed to dine at Spagos -- after all, I was now an attorney. I also couldn’t possibly be seen driving a hand-me down 1986 Toyota Corolla. I “needed” to lease a more respectable car.

Even when I stopped practicing law in 2001, I wanted to maintain “the lifestyle.” Again, for no logical explanation, my lifestyle costs skyrocketed upwards with no regards to affordability. I didn’t pay attention to my balances since I always seemed to have a balance transfer offer readily available to “bail me out.”

But some time in 2005, I had one of my many “aha” moments - - my consumer debts snowballed to levels that I could no longer make the minimum payments. To add insult to injury, American Express rejected my credit card application for a 0% balance transfer.

I created a handwritten list of my debts in 2005 in a Steno Notebook that I still keep as a reminder of those dark days. My debt balances at the time were:

Private Student Loans: $57,950.98
Fed’l Student Loans: $61,364.22
Chase CC: $16,572.72
Discover CC: $10,538.94
Citi CC: $ 9,602.12
Car Lease (remainder): $1,562.16
TOTAL: $157,591.14

Oh, and let’s not forget that in December 2005, after I turned in my leased car, I took out a $25,000 car loan to buy a new car. So setting aside my student loans, my total consumer debt (credit card, car loan) as of December 2005 was approximately $61,713.78!!

In fits and starts, I ventured onto the rocky road of debt repayment I’m currently on now. It took me over 4 years, but I’ve finally rid myself of the soul-crushing consumer debt-hole I dug for myself 14 years ago. My student loan balance is still mortifyingly high (approximately $98k), but I feel the end of my debt voyage is nearing.



I’d like to say that I’ll immediately snowball my $1,053/month credit card payments into my student loan payments. But, alas, I think I’m going to give myself a “breather” until the end of the year. I’m five months ahead of schedule vs. my Snowball Repayment Plan I created in August 2008, so I think I deserve a break.

I’m planning to spend some of the money, but I’m hoping to replenish some of my earmark funds for vacation and other miscellaneous spending. I finally feel like I’m on my way towards financial freedom.

22 comments:

psychsarah said...

Wow-what a journey you've been on! Congrats on this huge milestone.

444 said...

Take a breather. You deserve it. And yeah, like I obsessively analyzed for you (actually I was mostly looking at your 401K), you are on your way to financial freedom. Congratulations on getting through the uncomfortable times.

Live it up a little! Celebrate! Make an enlarged copy of your NW chart and paste it front and center for everyone to see! That's the whole point of financial blogs, really, isn't it? I'd be making it into a highway billboard if I were you.

mapgirl said...

That's great. I'm really really glad for you.

RainyDaySaver said...

Goes to show that paying off CC debt is possible, no matter how much you have, if you just chip away at it.

Congratulations!

The Lost Goat said...

Gratz!

D in Kansas said...

This is certainly and inspiration for me:) We're pretty close to that balance right now.

Jin6655321 said...

Congratulations!

And, out of curiosity... What's Spagos like? Does it live up to the hype?

negative_net_worth said...

Congratulations!!! You deserve a bit of a celebration! :)

Christine W said...

Congratulations on getting out of jail ( at least that is what paying off credit cards after 15 years and $12k felt like to me)

It is a huge burden off your shoulders, I bet you feel lighter already. Go celebrate!

findcashbackcards said...

Congrts dude. Thats a nice thing you have done. I am still some what under credit card debt.. hey give me some tips.

Miss M said...

Awesome!! Congratulations, from someone who has been there too. You had me beat, my CC debt was around $22k. I'm so happy for you. If you are anything like me you'll soon be motivated to get rid of the rest of the debt, it's addicting somehow.

Lulu said...

Congratulations on overcoming the credit card debt. I will be free of my credit card in 2010.

jpkittie said...

Good for you!!! that is amazing!!! Keep up the fantastic work!!! :)

Donna Freedman said...

Clearly, you rock. :-)
Congratulations.

soniya kharadi said...

Congratulations!!! Thats a nice thing you learn about debt management.

Sallie's Niece said...

Awesome job, congratulations!!

paranoidasteroid said...

I'm so happy you're back! Congratulations on getting the credit card paid off - we knew you'd do it!

Money Funk said...

congratulations! what a great stress relief! I can understand waiting until the new year to start snowballing that extra debt. Especially with the holidays coming (eeks).


That is a fabulous earmark in your personal history. :) Job well done.

Student Credit Cards said...

congrats!job well done.

Moving on up! said...

Yeah!!!!!!!! I'm so glad to hear. 15 years of credit card debt. I am so close to be credit card debt free too!
Nice job!

Anonymous said...

Congrats... you motivate me! I have less than $9000 left (from $15000 last year) but since I have taken a pay cut for one year it will take me two more years to pay them off! It makes me motivated to see that others are doing it! Great job.

Frank said...

Rightly said by psychsarah you have completed a wonderful journey. Congrats. Now I guess you can right a book on this journey of yours
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