I dream of the time when I won’t have to use my credit card anymore. I dream of the time when I can just use my ATM or debit card to pay for my purchases. I dream for that time to come soon! Right now, I still depend on my one and only credit card (I used to have three) for when I travel (for plane tickets and hotel accommodations), shop (for big, expensive items only) and dine out (occasionally).
On a related note, I’m very glad about the recent development in my credit card use. I am now credit card debt-free! Yes, you read that right. And I plan to make it for good. This means no more impulsive shopping for me. This means no more shopping when financial blessings are about to be received (hello bonuses!) or when expecting that extra income from my side jobs.
To be able to pay all my credit card debts amounting to around P60,000, these are what I did:
1. I got a loan** (payable within a year) and used the money to pay 80% of my credit card debts. The remaining 20% I paid gradually using my salary from work. I thought getting a loan was a good move because the one I got only had an interest of 8% while those credit card companies charge you 3.5% per month (that’s 42% per year!).
2. I limited my credit card use. For instance, instead of using my credit card when shopping for groceries, I used cash. This way, I was also able to keep myself from buying unnecessary items.
3. I listed all my credit card debts in an Excel file and monitored my payments. It really helped that I could see them daily and get reminded on how I could pay them all. What I do was I would subtract each payment made from my total debts. Slowly but surely, my debts went down to zero and it felt so good!
4. I kept reminding myself to pay, pay and pay. Whenever I’d have extra money, I’d make it a point to use most of it, if not all, in paying my credit card debts. It took a lot of discipline, yes, but nothing can’t be done when you’re determined to achieve your goal.
Please note that I seriously started paying off my credit card debts in July 2013. You can read about it here. My P60,000 worth of credit card debts may sound manageable to some people, but for me it felt like I was in deep trouble and I needed to get out of it. It even cost me my peace of mind at one point. Good thing I’ve seen the end of it this early (in less than a year, that is).
To be free from credit card debts is liberating! I still have a few debts (non-credit card) that are yet to be fully-paid, though, and they’re my next targets. I’m just happy that I can now concentrate in helping the hubby clear his credit card debts, too. (You know, those debts he has accumulated when he was still a bachelor.) I am confident that he, too, can get rid of his credit card debts soon. Especially if he’ll listen to my sound financial advice all the time. Haha.
**payable until June 2014 only