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.