How We Overcame $30,000 in Credit Card Debt

You just shove them under the pile of things you’ll get to eventually, or hope they will disappear don’t you?

Those credit card statements that seem hell bent on intruding in on your happiness. You log into your bank account with eyes squinted so you only see blurred numbers instead of the reality.

Sometimes you don’t even open the letters. What’s the point?

It’s not like you can do anything with it. The money’s not coming to pay it off and you can barely make minimum payment each month. Minimum keeps rising because you have to put the groceries on it.

It’s a pain that reminds you how worthless you are, how you’re crap at managing money and useless at finding a solution. Debt is crippling and will lower your self esteem with each new dollar you owe.

Holy crap! We know the tightness of the chest, the sleepless nights and the quiet begging that the tree out the back really will start growing dollars.

Although the pain is intense and the situation seems bleak, there is a way out. It won’t be an overnight exit door, but it’s one you can walk through steadily to get to your eventual freedom.

It took us about three years to eliminate our credit card debt. Here’s how.

Lived with family

We are so grateful to have such awesome family. Craig’s parents helped us out immensely by letting us live with them in the upstairs part of their house while we found our feet again. This gave us time to gain greater control of our money and gave us a chance to pay down our debt. It was still a challenge as we didn’t have a lot of money coming in consistently.

Can you move in with your family? Can you rent out a room in your house? Can you downsize your current home? Can you flat share?

If it’s temporary, it might be worth making this sacrifice to help you get out of debt and moving forward to a better lifestyle.

Cut costs and transfer that to our debt

Spending the majority of our adult lives as backpackers has really helped us to be good at minimal spending. We’re always refining our budget so we can eliminate what we really don’t need and to keep more money.

What are some other ways you can cut costs?

Take out all those luxury items or things you don’t really need and put that extra money onto your debt. Even if you can only spare an extra $10 – it will help and get you in a more positive money management mode.

Relied on bonuses

We used bonus money to pay down large chunks of our debt. The less your balance, the less interest you pay. That’s why it’s always best to pay off more than the minimum.

Before we had debt, we always used our bonuses to travel. We’d often get work bonuses or tax returns – put that extra money to good use.

I know how badly you want those bonuses for something you’ll really love. Using bonus money to pay down debt sucks! But your life will suck more if you don’t get your debt under control. Making the sacrifice now means more for you later.

Celebrated every pay off.

It’s important to celebrate your wins, no matter how small. Just don’t celebrate by spending money on depreciating assets or that dress you really don’t need!

Dance a jig, give yourself a nice bubble bath, or high-five your partner for every little win. It doesn’t’ matter what you do as long as you pat yourself on the back and feel GREAT about how well you are doing.

Did not focus on the debt

If you’ve been following this Money Project series for awhile, you will know by now I am very big on the Law of Attraction and feeling good about money.

It’s essential to be aware of your debt and and create a plan to pay it off. But you have to treat it as if you are a machine habitually working through a system to pay it down. You can’t attach any negative emotions to it.

You’ll want to tear yourself down with words of lower, failure and feel an intense amount of anxiety and stress.


Instead celebrate that you have a plan in place to pay it off. Even if you move at the pace of a turtle, you’re moving forward and that means progress!

I knew the impact seeing the debt was having on my emotions, so I let Craig go into the online account to organize the payments. He could be a bit more detached from me, so it was best that I drew my attention to other things that brought me good feelings.

Note: This does not mean ignoring the debt and hoping it will go away. You must put a debt management plan in place.

Our Debt Management Plan

Quick Disclaimer: we are not financial planners or accountants and you should always consult a professional with any serious money issues.

Take into account your personal situation and what you can manage. These are our personal tips on what worked for us:

1. Decide which credit cards to pay off first

We made our decision based upon the following criteria.

  1. Which credit card has the highest interest rates?
  2. Which credit card has the smallest debt?

Optimally, the one with the smallest debt will have the highest interest rate. It’s important to tackle the highest interest rate cards first as they’re the ones you’ll be getting charged the most money for the debt on it. The less you give to the bank the better.

But, if you have a huge debt on that card it might not be the best for your mindset to pay that one off first. You might feel so overwhelmed by it that victory seems far away, so you give up. In this case, its probably best to go with paying off the card with the smallest debt first.

That way you get some wins quicker and build the momentum and confidence to pay off the higher amounts.

2. Set up automatic payments

This is the best way to take away the worry and angst. Set it and forget it.

As long as you follow this step, you can stop focusing on the debt. We set up the automatic payments of the minimum amount + a little extra. You’ll work out the extra you can afford by doing your budget and finding ways to cut back on your lifestyle expenses.

You really want to focus on paying off more than the minimum amount otherwise you will never pay off the debt. The banks are clever at setting it up like this!

3. Pay down large chunks

Put this into your debt management plan.

You’ve got to slice off massive chunks of that debt to pay them off faster and with less interest. It was a given that any extra money that found it’s way to us, it was put on the debt.

4. Find the cards with the best interest rates

If you can, do some research on the credit cards that offer the best interest rates. Or talk to your own bank to see how they can help you.

You might be able to consolidate all your debt onto the one card with a better interest rate. You might even get a personal loan that has a much lower interest rate. Then you just have to pay off the loan with the smaller interest rate.

5. Transfer the debt to cards with no-interest terms

For our last credit card, we moved the balance over to a new card that had an interest free introductory offer for six months.

By this stage, we were pretty good at money management and paying off debt, so we believed we could eliminate this debt before the no-interest period ended (as the rates can then jump high).

Removing any interest payments in the interim gave us a healthy boost of happy vibes. This confidence helped to bring in the means to take the sucker down and we wiped it out completely.

Because I was not focusing on the debt, I had no idea that we even had paid it off, until one day I logged in to check something in our personal account, and noticed the balance of zero. That was such an amazing feeling. We were free!

What about when the debt is paid down? Do you still use credit cards?

This all depends on the smarts you learned along the way.

Did this experience help you to become better at managing money? Are you aware of the debilitating impact debt has on your life? Are you committed to never getting into debt trouble again?

If you have a solid income stream, and your expenses are covered, you can use credit card again BUT never to buy anything you can’t afford. And never if you cannot pay off the balance in total each month.

Why use credit cards then?

We use credit cards smartly now to help us save or effectively earn money.

We use our credit cards to pay for almost every purchase both business and personal. We do this to collect frequent flyer points or cash back rewards, which we use whenever we have unexpected flights or need to purchase goods. At the moment we have enough points to fly to New York and back.

But, we pay off the balance in full every month so we don’t pay any interest.

You have to be super smart with money to follow this strategy. It’s far too easy to say, “Oh this month I’ll just pay the minimum” or “I really love this skirt. This one purchase won’t hurt.”

It will.

“Complacency is the direct path to debt prison”. (click to tweet this)

Only buy when you can afford and always pay off the balance in full – the sure-fire secret to staying debt free. If you have to pay for necessities on credit card, you MUST come up with a plan to reduce your expenses and earn more money.

You can do it. You are powerful and smart enough. A little bit of sacrifice and smart choices will get you where you deserve to be.

Read More – 5 tips to get out of debt so you can start traveling more

Have you overcome large credit card debt before? How did you do it?

25 thoughts on “How We Overcame $30,000 in Credit Card Debt”

  1. Excellent guide … I also carry a significant balance, but I account for it in my daily budget … I earn over and above the minimum payment every day, leaving me with a large amount of money at the end of the month to make a payment on top of my monthly minimum.

    Once you have a system, life gets much less stressful!

  2. Awesome article! The Gourmand household believes in a debt free lifestyle. Although we never had credit card debt, we were saddled with student loans ($50k) and car payments ($15k). Through principals taught by Dave Ramsey, we eliminated all debt except for our mortgage. Talk about freedom! We now live on a strict budget which allows us to do MORE than when we had debt. Here’s a post I wrote on the topic –

    1. I love Dave Ramsey! Thanks so much for sharing your experiences. Great post. I’m checking out some of those resources now you mentioned. I know how badly student debt can cripple Americans so well done for getting rid of it!

      1. Financial freedom and your post is a topic near and dear to our hearts. Not only do we live, we also teach Dave’s Financial Peace University through our church. It’s a great discipline to help eliminate any debt.

  3. I think Caz that part of dealing with debt is taking responsibility for it and stop putting your head in the sand. It doesn’t go away and declaring bankruptcy causes you other problems. So just stop spending and start fixing the problem. The sooner you start fixing the sooner the problem is dealt with and you can go back living a more fruitful life.

  4. Hey guys!
    Great tips, credit card debt can be particularly hard given the repayments depend on how much is owing on the card. I see it every day (at my “day job”).
    Something I would suggest is if you for example have a $20k credit card and pay off 5k, ask the bank to reduce your balance to 15k and so on so that you arent tempted to then make more purchases because you have the credit available.

  5. You are an inspiration for the all people who are living a stressful life because of the huge debt. With you post it is quite clear if you have your priorities are right, then paying debt is not impossible.

  6. I have been incredibly lucky in that I have only ever had one credit card… it was over 20 years ago when the limit was only $500 and banks had not started ‘shoving’ everyone who wanted a small loan towards getting their credit cards. They rely were/are criminals! I recall the stress I felt at the time when my bill came in for the card – laughable nowadays!

  7. It’s taken me a while to getting around to reading this post, but I’m glad I finally did! Thank you so much for posting this. When I was made redundant in May we immediately used part of my payout to wiping off one of our credit cards. We’d have more money now if we hadn’t done that, but we also would have had more debt.

    The fortnight-to-fortnight payments are a little harder to manage but we generally try to pay a little more than the minimum, even if we can only afford to pay a few dollars extra. Fingers crossed we’ll clear this soon.

  8. Hi Caz, great article!
    I think it’s so important to try and remain debt free. In the past I’ve had a car debt only, but that experience alone, taught me so many valuable lessons about money that I wouldn’t have known otherwise.
    Thanks so much for sharing your story, you guys always have a way of telling it straight and it’s really refreshing 🙂

  9. I think the best way to settle is your credit card loan is to pay it lump sump: use a personal loan if you don’t have enough in your saving.

  10. Really excellent guide. Sometimes we need to read an article like just to learn a lesson from an experience travel. I wish I can do what you have done to save money. Have more travels.

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