How To Pay Off Credit Card Debt For Good

If you are looking for information on how to pay off credit card debt for good, I have life-changing advice for you. But let me start with a warning, this is going to be nothing like the crappy advice that you have probably already come across on the web.

And by crappy, I am talking about articles that suggest that you “pay off” your debt by consolidating, doing a balance transfer, getting a low-interest loan, or even getting a home equity line of credit on your house to “pay it off.”

That is a bunch of nonsense!

Refinancing, consolidating, or balance transferring, DOES NOTHING to pay off your debt. The only thing that you are doing is MOVING THE DEBT, that’s it.

I want to empower you with information that can lead to a real transformation. And I am confident that my concrete 4-step plan to get out of credit card debt works.

No gimmicks, fairytales, or balance transfers.

Related Articles To Paying Off Credit Card Debt

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• 7 Tips To Improve Your Financial Wellness
• The Budget Pad: Organize your Income, Track Expenses & Save Money
• The Debt Snowball Method
• Living Debt Free, is it Possible or Wishful Thinking?
• Surviving Unemployment: Seven Money Lessons I Learned

The Credit Card Debt Disaster Many Americans Face

Before we get to the plan to pay off debt, I think that it’s essential to put the credit card debt issue into context, because I feel that credit card use, and debt, has been normalized in our society.

Today, it is more common to see people pay at Starbucks or McDonalds with a credit card than in cash.

Paying with plastic has become the norm. And in my opinion, it has also become a vice.

Some people start using credit cards for convenience. Others, because they’ve been told that credit cards help improve credit scores. And there are also those motivated by the rewards of miles, points, or cashback.

In fact, according to an August 2019, Consumer Credit Card Market Report issued by the Bureau of Consumer Financial Protection, “Credit cards are central to the financial lives of nearly 170 million American consumers”.

That’s a scary statement!

Credit cards are “necessary” to the financial lives of many of us!

And according to the report, cardholders have also increased their use of rewards cards.

OK, we need to realize that credit card companies are conditioning consumers to think that it is good to use them, so good that they are “rewarding” us.

But chasing points, miles, and the promise of improved credit scores has taken a massive toll on American’s financial wellness.

The Illusion Of Credit Card Rewards

Although I am being critical of credit card debt now, I can relate.

I have been there and done that.

It was my idea to open a Citi card to make all our monthly purchases to earn travel miles.

We also opened another credit card to transfer balances that were at a higher interest rate.

We tried to play the game. Until we realized that we were chasing our tail.

The banks always win.

Miles were inconvenient to use because when I was trying to book a family trip, the miles would apply to the crappy itineraries and not to the best ones

When I finally booked a flight on miles, I found out that I still had to pay fees to redeem them.

Wait a minute. Are you getting confused like I was?

I had to PAY to use the FREE miles!

Ridiculous.

I get so fired up about the credit card rewards and debt topic because most people believe, as I did 10 years ago, that they can play the game and win.

The Reality About Credit Cards

According to the Bureau of Consumer Financial Protection, total credit card balances in 2019 reached $13 billion.

Americans now owe more on credit cards than they did after the 2008 recession.

Did we not learn anything from the financial collapse?

I tell you what, I was forced to learn A LOT as a result of the crisis.

Our household income dropped by 65% during the Recession. The money coming in was not enough to cover all our debt, including several credit cards, and our family’s living expenses.

When I looked, in dismay, at our reduced income and expenses, I realized that if we didn’t have any consumer debt, we could have gotten by even on a lean budget, without facing a financial crisis.

That’s when it hit me.

This theory that it is “normal” to be in debt and that “you are always going to have a mortgage and a car payment” is a bunch of crap.

That is a lie, and it is optional to believe it.

Debt, of any kind, will always be a liability for your wellbeing.

Getting a loan to buy a house, a car, or a credit card to go on vacation can be seen as an opportunity. Until, for one reason or another, you are strapped and can’t afford to make the payments.

A Better Way For Your Money And Life

Your life will always be better if you become debt-free as soon as possible.

So, when I finally realized that the pursuit of free miles, a better credit score, ephemeral rewards, and 0% finance loans on vehicles were not opportunities. When I opened my eyes and realized that debt was a detriment to my family’s wellbeing, I decided to get rid of it all, starting with the credit cards.

When our income recovered, we started plowing through the debt.

Now I am even grateful for the 2008 Recession.

It was thanks to the financial collapse that I challenged my beliefs about using credit cards, being in debt, and not worshiping the famous FICO Score.

After all, before the crisis, I did everything my friends, the media, and the commercials advised on handling personal finances. And that it only got us in a deep hole.

Today, we are way better prepared to face another financial downturn.

We have a fully-funded emergency savings account. And we are committed to only buy things, cars, trips, groceries, or anything that we can pay for in cash.

I have not used a credit card in ten years, and the quality of my life, without the miles, rewards, and prizes, is a whole lot better.

I also realized, as dumb as this may sound, that no one has built wealth on credit card rewards, miles, or cash back!

It sounds stupid to say it, but unfortunately, many people think that points and miles are somehow going to increase their net worth.

That speaks to the great marketing credit card companies and banks do about their products. They teach consumers to associate a platinum credit card with being part of an elite club.

In reality, the only way to really increase your net worth is by protecting your income. And, the only way to preserve your income is by staying out of debt.

My hope, if I still have your attention, is that you will be open to learning how to really thrive financially, stop falling for the credit card traps, and start using your income to build wealth.

So, are you already reaching now for the scissors to cut up your credit cards?

I hope so!

Now it’s time to learn the 4-step method that you need to follow to get out of credit card debt for good.

4 Steps To Pay Off Credit Card Debt For Good

If you follow this process to the letter, you will, without a shadow of a doubt, make immediate progress becoming debt-free.

Now, take into consideration that this is not a miracle method to get rid of debt. This is a process for people committed to working hard.

Also, I should say that I am not a proponent of debt consolidation methods, refinancing, or balance transfers.

Instead, I am going to teach you how to get to the root of your money mess because to pay off debt for good, we need to find out what got you into debt in the first place.

And, if you have been deep in debt for many years, know that patience will be your best allied.

Depending on how serious you get, it may take you a couple of months, or years, to get out of the hole.

STEP #1 Take Ownership Of Your Debt

Before we even start getting into the math of paying off debt, you must first take ownership of it.

You are in debt because you decided to sign up for those cards and use them voluntarily. Nobody forced your signature on those purchases.

Every time you sign a credit card purchase receipt, you are signing a promise to pay it off. You are taking ownership of it.

So, it was not the banks’ fault, your spouse’s, or that emergency visit to the hospital.

If you are feeling that way, you stuck in a victim mindset. It is not their fault that you are in debt, it is your own, and you need to own it to make progress.

Only when you decide to own your mess will you feel a visceral drive to do the impossible to pay it off.

As long as you blame the economy, your wife, your mom, the credit card companies, etc., for your situation, you will get nowhere.

So, if you are thinking about waiting around for the bank to make you an offer to settle your debt, you are doing it wrong.

Nobody will come for the rescue.

Nobody came to rescue us during the Recession, and believe me, I prayed and hoped and waited, but nothing happened.

Only hard work, discipline to cut down expenses, and extra cash to pay towards your debt will help you get rid of it.

Step # 2 Figure Out Why You Got Into Debt

Now that you have decided to embrace your debt, you need to look within your soul and your bank statements to realize what got you into debt in the first place.

We need to know this so that we can address the root of the problem and not just the symptom.

You see, your debt is not the source of your money problems. Instead, it is the symptom of something else happening in your life.

Some examples of the possible source of credit card debt are:

• You don’t make enough money to sustain your lifestyle and use credit cards to supplement your expenses.
• The belief that by using them, you can earn points, miles, and cashback.
• Having a compulsive spending problem, and credit cards enable your behavior.
• You are trying to use credit cards to build good credit, again, because you believed the crappy advice.
• Credit cards are your emergency fund.
• The use of plastic to hide purchases from your spouse.
• Having an addiction to spending, drinking, drugs, gambling, etc., and credit cards provide you access to cash.
• Embarrassment to admit that you have been robbing Peter to pay Paul by having multiple cards and doing balance transfers.
• Ended up with medical bills that you paid for with credit cards.
• You don’t do a budget and just wing your expenses every month.

The list of reasons why you could be in credit card debt is endless.

I am using these examples to give you a starting point to reflect on your own money habits.

Until you identify the root of the problem, you won’t be able to change the beliefs and behaviors that got you into debt.

The Key To Stop Getting In Credit Card Debt

The set of beliefs that you had about credit cards, for instance, that they help build good credit, earn points or rewards, has resulted in you taking the actions that got you into debt.

Let me put it this way:

• Belief: Credit cards help me improve my credit score.
• Behavior: I use credit cards to build “good credit”.
• Result: Somehow I am $20,000 in debt and I am drowning over here.

Until you embrace new beliefs about credit cards, like they are not good for your financial wellbeing- because if they were, you wouldn’t be reading this article- you won’t be able to stop using repeating the behavior that gets you in debt.

This statement right here is probably the most crucial piece of information in this entire article:

Until you change your beliefs and behavior about the use of credit cards, you won’t be able to get out of debt.

I know that some people are disciplined enough to pay off their credit card balances every month, most people don’t do it.

Instead, they end up dragging their debt for many years, costing them thousands of dollars.

So, to get different results, you need to adopt different beliefs about credit cards and debt.

For example:

• Belief: I don’t need to use credit cards.
• Behavior: I only buy what I can afford to pay cash for.
• Result: I don’t get into debt or lose sleep over my growing credit card balances.

Do you see how logical is this process? However, we have become blinded to it because, again, credit card companies are great at marketing their services.

Putting it plain and simple: To really get out of credit card debt for good, you need to get them out of your life.

This takes me to step #3 of this insightful process.

Step #3 Stop Using Credit Cards At All!

Pull out all the credit cards from your wallet and cut them off.

Right now!

While you are at it, take a picture and send it to me.

I want to share your milestone with others like I am doing in this post, and your pictures can be an inspiration for others to gain financial freedom.

So, what are you waiting for?

My email is coach@yezminthomas.com.

You need to cut the cards because to start seeing progress getting out of debt, you must stop adding to the deficit.

This is just plain logic.

There is no way you are making progress if you keep using the credit cards!

It’s crucial to cut the credit cards up to know that you are serious about getting out of debt.

As long as they remain in your wallet, or in your life, there will be plenty of opportunities to relapse.

I am 100% sure that if you don’t cut them, the next time you feel like you are in an emergency -it could be a legit emergency or a flash sale at your favorite store-, you will use them again.

You can cut the cards even if you are carrying a balance.

You will have the bank statements and online access to your account to continue paying them off.

Please, do not carry any credit cards in your wallet. Destroy them!

I cannot emphasize this enough. If you really want to win with money, cut the cards now, please! And send me a picture!

Step #4 Use The Snowball Method To Pay Off Your Debt

You have now taken ownership of your debt, realized what the root cause of your debt is, and decided to stop using credit cards. You are ready to develop a strategy to pay them off ASAP.

The snowball method is the most effective way to pay off debt, build financial confidence, and stay motivated in the process.

I know that you have heard how you should focus on paying off your high-interest credit card debt first.

If you want to drag debt out for many years, paying off high-interest credit cards first makes mathematical sense.

BUT, I don’t want to argue about numbers, I want to help you get out of debt ASAP.

Let’s not miss the point here, your debt is not a result of a math problem. Instead, it is the result of a behavior problem, one that you identified by soul searching and inspecting your bank statements on step #3.

The fact of the matter is that the snowball method is the most effective way to get rid of debt as fast as possible.

We are not trying to say in debt and “save money” on interest in the process. On the contrary, we are paying off this mess ASAP!

The longer you stay in debt, the more it will cost you. Bottom line.

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That’s why consolidation, getting a big loan to pay off many credit cards, and balance transfers don’t work. Because you are not addressing the root of the problem. Instead, you are spending your time doing the math and moving the debt instead of paying it off.

In most cases, people that consolidate, borrow money to “pay off” debt or do balance transfers, feel like they did something to get rid of the debt.

But they didn’t, they just moved!

It went from one bank to the other. From one credit card to another.

What you need to do instead is to follow, step-by-step, the debt snowball method.

I explain the debt snowball method in detail in this post. You should totally read it as well. But, for the sake of delivering on my promise right now, let’s summarize it quickly.

The Debt Snowball Method Explained

1. Write down all your debts in a piece of paper, from the smallest balance to the largest.
2. Then, get on a very tight budget. If you are not budgeting every single month, you should. That’s part of the problem that contributed to your debt. Download my free budgeting resource and do your monthly budget today!
3. Then, cut down your living expenses as much as you can.
4. Make minimum payments on all your debts, and attack the smallest with a vengeance.
5. When you pay that smallest balance card off, use the minimum payment you were putting into it, plus all the extra money you are scrapping, and add it to the second debt on the list.
6. Once you pay off the second one, follow the same process to pay off the third, and so on.

Take a look at this picture with an example from a couple that I am mentoring

It is called the debt snowball method because every time you get rid of a small debt, you free up more cash to add to the snowball and put it towards the next one.

When you are following this process, the interest rate on your credit cards becomes irrelevant, because as you can see, the point is to be debt-free ASAP not to stay in debt.

Getting out of debt is the only real way to save money on interest payments.

Things to consider to become debt-free faster:

• You must cut down your lifestyle to the bare bones.
• Sell stuff you don’t need to make extra money.
• Get a second or third job, and all the overtime you can get at your current place of employment.
• Sell the stuff that is keeping you in debt.
• Cancel cable and any services that are not necessities.

Understand that the only thing that will get you out of debt is extra payments on your balance, a.k.a, money!

Refinancing, consolidating, balance transferring, will not get you out of debt. On the contrary, it keeps you in debt!

I told you earlier that I do not have a miracle formula to become debt-free. But if you follow this four-step system, you will be free.

Sacrifice Today So That You Can Enjoy Tomorrow

The time it will take you to get out of debt will depend on your ability to generate extra cash to pay it off.

In the example above, I suggested to this couple to sell the car and increase their income to pay off their credit card debt faster.

If they pay $2,166 towards credit card debt every month, they could get rid of it in a year.

If they can add $1,083 per month, we are talking about two years before they can be free of credit card debt. And they would still have the student loan and the car to pay off.

That’s why in this situation selling the car, which is one-third of their total consumer debt, would help them tremendously to accelerate the process.

They can use their extra income plus the money they were spending on car payments to plow through this mountain of debt.

And let’s be real. You cannot have it all, at least not when your income is being eaten by eleven different credit card payments.

If this couple doesn’t act today, I am afraid that drowning in debt will be the story of their lives. And I don’t want them to live like that!

When you become debt-free, then I am all about enjoying all the things, as long as you can pay cash for them.

In Conclusion: How To Pay Off Credit Card Debt For Good

If you are feeling stressed about your credit card debt, you are not alone. Most users end up dragging their balances and paying a ton of money on interest and fees for years.

It doesn’t matter what your friends, the media, or the commercials say. Your beliefs about credit cards resulted in the behaviors that got you in debt.

The good news is that if you want to have different results, then you need to change your beliefs and take new actions.

Forget about all the fantastic publicity you see on TV. The rewards, cash back, and miles are just a gimmick to entice you to open credit cards and use them.

These companies know it so well that they spend millions of dollars on commercials to make you believe that by using their credit card, you are special.

News flash: You are only special to your boyfriend and your mamma. Stop believing that because you have an American Distress card, you belong to an upscale club.

Start protecting your money!

So, to put an end to your credit card debt nightmare by following exactly these four-steps:

1. Take Ownership Of Your Debt
2. Track Down The Reason Why You Got Into Debt In The First Place
3. Stop Using Credit Cards At All
4. Implement The Snowball Method To Pay Off Your Debt

And don’t forget to email me at coach@yezminthomas.com a picture of your cut credit cards, and of course, block the account numbers, please!

Tell me a little bit about your story so that I can share it to motivate and inspire others who are fed up making payments to a dozen different banks.

And if you have any questions, make sure to drop them in the comments section below. I respond to all of them personally.

Related Articles To Paying Off Credit Card Debt

• $5,000 Paid Off in Credit Card Debt by Going Cash-Only
• 7 Tips To Improve Your Financial Wellness
• The Budget Pad: Organize your Income, Track Expenses & Save Money
• The Debt Snowball Method
• Living Debt Free, is it Possible or Wishful Thinking?
• Surviving Unemployment: Seven Money Lessons I Learned

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How To Pay Off Credit Card Debt For Good