Y’all. Y’all, y’all, Y’ALL! I am so excited I can hardly stand it. On Friday, November 10th I grabbed the bull by the horns, dug into my hard earned house savings (bye bye new comforter set!) and paid off a chunk of my credit card debt. I then used $389 of my paycheck, leaving me with a grand total of $27 in my checking account, to pay off the rest. And I could not be happier. It’s seriously the best early Christmas gift I could have given myself.
The post has affiliate links, I’ll get a small commission and you’ll get my eternal gratitude! It won’t change what you pay!
Usually my posts have a purpose, that you can enact in your own lives. I hope that this one is no different, but I really just want to brag right now. Humility is one of my best traits 😉
A little over a year ago I had $2,000 in credit card debt. I was irritated with myself that I let it get that out of hand and worked my booty off to pay it down. It worked, and I had a grand balance of $0! Then, I got myself into an $1,100 hole. I have a monthly $600 daycare bill, insurance, etc… I don’t have the money to be spending living on credit! And I knew the longer it took me to pay off the more I was paying in interest! No Bueno! So I decided once and for all that I was going to pay off both my credit cards, cut up one of them, (the annual fee wasn’t worth with the perks) and move on with my life! Via my debit card! And Friday, November 10th was the day I finally did it! I’ve decided that it’s going to be easier for me to make a budget if I live off my debit card and stop relying so much on my credit card. So, that’s my goal! November is going to be a terrible month. But, we have 3 Airbnb guests and my hubby’s income. I’m determined to make it work sans my credit card!
Five reasons that I got rid of my credit card:
1) Not having a credit card will help me to budget easier. I don’t have room in my budget for minimum credit card payments! Your minimum payment is usually between 1% and 3% of your outstanding balance. Based on a $3,000 credit card balance and 18% interest it would take you seven and a half years to pay off!! SEVEN AND A HALF YEARS! And over $2,500 in interest! To find out how long it would take your credit card to be paid off, I’d recommend using Credit Karma’s Credit Card Repayment Calculator.
2) Dave Ramsey, do I need to say more? You need The Total Money Makeover in your life, STAT if you haven’t read it yet! He outlines the 7 steps of how to get out of debt and start living a healthier life. If you’re wondering what the heck the snowball method is, or even if the avalanche method is better, head over here.
3) It will help me to live within my means. If I don’t have the money in my bank account to be used by my debit card, then I don’t have the money – period! I imagine this is going to be difficult to transition, and I won’t lie to you – I’m not looking forward to this one!
4) Not having to worry about paying off this credit card will simply be one less stress in my life! There are so many reasons why saving money and paying down debt is good for more than your bank account.
5) And, of course, get out of debt!! Bad debt! There are “good” debts and “bad” debts, having a house is a good debt, having credit card debt is bad debt. If you don’t believe me, Nerd Wallet does a great job of explaining why credit card debt is bad here!
If you’re paying attention though, I still have one credit card open. It’s my Discover card and I love it. The perks are wonderful! I opened a Travel IT card because we have a trip coming up in July that I’m saving for, and I want to get some points to go help with the travel! Traditionally, with this card, you can use the points towards anything travel, but you can also use it for Amazon credit or cash it out! I’ll probably use this card just for something simple that I know I can pay for from now on, like gas. So the points won’t be a lot, but that’s ok! Main thing here is to not live on credit!
So tell me, I really want to know; what’s your biggest financial accomplishment? Sometimes we have to celebrate the little milestones! Do you have a credit card? Why or why not?
Photo by Corinne Kutz on Unsplash