ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How to Wipe out Credit Card Debt

Updated on August 28, 2019
MauKat profile image

A few years ago I had over $130,000 in credit card and mortgage debt. I paid it all off and now I continue to live debt free.

Pay Off Your Debt Without Ruining Your Credit Rating

There are lots of ways to eliminate your credit card debt. You could declare bankruptcy, you could call one of those "secrets the credit card companies don't want you to know" places and really destroy your credit rating, or, you could follow my simple plan for paying off all your credit cards, while actually improving your credit score.

Now the plan is simple, but it is not easy. To make it work you are going to need to exercise a large amount of self control, and be committed to paying off your credit card debt.

Paying off your debt is going to have to become more important to you than having the latest car, the biggest house, or even the nicest shoes. In some cases, to pay off your debt you are going to need to make some sacrifices in your style of living.And it won't happen overnight.

Paying off your credit card debt is a lot of hard work, but the rewards are outstanding. If you follow my plan, not only will you pay off your credit cards, at the same time you will be building an emergency fund savings account. Imagine how it will feel to be debt free, and with money in the bank. Imagine not needing to worry if your car needs repair. Imagine what it would be like to on a first class vacation, and not have to worry about paying the bills when you get home.

I know what I am talking about. There was a time when I had almost $30,000 in credit card debt. Plus a mortgage! 5 years ago I paid off my last debt, and I have lived debt free ever since. But that does not mean I am living the frugal life. Before I paid off my debt I was paying almost $2,000 per month in interest alone! (That included my mortgage, which I also paid off.) Paying off that much debt freed up a bunch of cash each month. Since I have become debt free I have taken a two week first class vacation to Belize, and paid cash! I have bought a car, with cash, and I have enough in savings that I will be OK for a long time if I happen to lose my job.

Now normally this would be the place where I would tell you to buy my book, or sign up for my seminar, but that is not what I am going to do! Keep reading and I will tell you exactly what you need to do to pay off all your debt and become debt free.

Step Number 1- Find Out Exactly How Much You Owe On Your Credit Cards

Get all your credit card statements together, and then using either a spreadsheet, or just a piece of paper, create a worksheet. Across the top create the following categories.

  1. Credit Card Name
  2. Total Amount Owed
  3. Interest Rate
  4. Minimum Payment

Now using your credit card statements, fill out the worksheet for every credit card that you are carrying a balance on. Then add up the total amount owed, and the total minimum payment. Take a moment to just look at these numbers. Look at the minimum payment amount. What could you do with that amount of money if you didn't have to send it to your credit cards? Now look at at the total amount due. Don't worry about how big the number is, don't feel guilty about running up that much debt. But do accept that this is the amount of debt you have, and that you are committed to getting rid of it.

Dave Ramsey has helped a lot of people get out of debt.

The Burden of Debt

Too Much Debt is a Burden! Don't add to it!
Too Much Debt is a Burden! Don't add to it! | Source

Step 2 - What to Do When You Can't Pay the Minimum Payments On Your Credit Card

Now go back to that minimum payment amount. If you regularly pay more than the minimum payment, I will get back to you in just a minute. But keep reading if you want to really accelerate paying off your credit cards.

If you can't pay more than your minimum payment, or if you are not able to pay even the minimum payments on your credit card. Listen UP! You are spending more than you earn! As long as you spend more than you earn, you will only get deeper and deeper in debt. And it will only get harder and harder to get it all paid off. Starting immediately you need to spend less, and make more. Personally I find spending less quite a bit easier than earning more. But I will be writing more hubs later that deal with both of these topics in more detail.

But for now, first look to where you can cut back on spending. You may think that you have already cut back as much as you can, but I can almost bet you have not. Sometimes it takes drastic measures to make a real dent in your spending. Taking your lunch to work and passing on the daily latte will certainly help, but here are a couple ideas that will turbocharge your efforts to get your credit card debts paid off.

Consider selling your car and using public transportation. Gas, maintenance and insurance on a car can add up to hundreds of dollars a month. If you are making payments on your car, this might be all you need to get on the fast track for paying off your credit cards. Just make sure you can sell your car for enough to pay off the entire debt.

The second big step you can take to increase your income without taking another job is to consider taking in a roommate. In my area you can rent a room in your house for $500 per month. Once again, think about how quickly you could pay off your credit cards if you paid an extra $500 or more per month?

Step 3 - Paying Off Your Credit Cards, Have a Plan

Pull out your spreadsheet and take another look at your minimum payment. If you never used your credit card, and paid just the minimum payment, you would eventually pay off the card. It might just take more time and interest payments then you would like. So now it is important to decide how much extra you can put towards paying off your credit card debt.

If you can't come up with an extra amount, then go back and read the previous paragraphs. For the plan to work in a reasonable amount of time, you need to be able to pay more than the minimum payment.

Decide which credit card you would like to pay off first. Some people like to pay off the card with the highest interest rate. That makes sense, because in the long run you will pay less interest. Some people like to pay off the card with the lowest balance first. That way they will have the satisfaction of getting a card paid off in the quickest amount of time. Either way is fine with me, as long as you pick just one card that you want to pay off first, and stick with the decision. As you pay off each card, you will roll over the total payment into the next card you want to pay off.

For all of your credit cards except one, you are going to pay just the minimum payment, no more! This starting minimum payment is the payment you are going to make until the card is paid off. Over time, your minimum payment will go down, but the amount you pay on the card will not.

Let's take a look at your extra payment amount. If it is under $12 take half of it and make that the additional payment on the card you are paying off first. That is right, I said half. Even if it is only $1. The other half of your extra payment amount you are to deposit in an emergency only savings account. Even if it is only $1. I know that most banks will not open a savings account for only a dollar. Get creative, you don't need to keep the money at a bank, but you do need to put it aside to be used only for emergencies. And I mean real emergencies. You biggest priority right now is to pay off your debt. Your emergency fund is to be used only for things you literally can't live without. If your extra payment amount is $12 or more, I want to you split it in thirds. One third to paying off your debt, one third to your emergency savings account, and one third to fun money.

A Note About Fun Money

I am the only person I know who tells people that are trying to get out of debt to plan for fun money. If you are living like a miser, and every extra penny is going to paying off debt, it is going to be really hard to stay on the plan. Fun money is just what it sound like, money that is for fun. This is money you can spend on anything you like, without guilt. You might need to save up for the things you want, but you might find that waiting for what you really want is fun! I spent 2 years planning my trip to Belize while I saved the money, and sometimes I think the planning was almost as much fun as the trip itself! So don't pass on the fun money trying to pay off your debt faster. It will help you stay on plan.

Step 4 - Automate Your Credit Card Payments

Now that you know exactly how much you will be paying on your credit cards each month, you can set up your payments so they happen automatically. Most banks will let you do this through online banking, or you can contact your credit card company and they will set you with an automatic payment plan. With all your payments on auto pilot, you won't be late making a payment, and you won't be tempted to skip a payment. You just need to be sure that you have enough in the bank to cover your payments.

Step 5 - Pay Cash for Everything

Let me tell you about a very difficult day in my life. I had committed to paying off my credit card debt, and that meant not charging anything. How can you pay off your debt if you are continually adding to it? I was in the middle of putting in an above ground pool. It was May and the days were beginning to get warm. I couldn't wait for my pool to be done so I could enjoy it. But on this particular day I realized that I needed some extra parts for the pool. I didn't have the cash for it. I knew it could take weeks to save up the money for the parts, weeks that I could be swimming in my new pool. I am happy to say that I stuck to my plan. I made an extra effort to cut costs, and I did various odd jobs that I could find to bring in more money. In two weeks I had saved enough to buy what I needed to finish the pool, without adding to my credit card debt.

Paying cash for everything is the hardest part of the plan, and the most important. As the old saying goes, if you want to get out of the hole, quit digging! This was the most challenging part for me and for most people. But once you get in the habit of paying with cash or doing without, you will find that it gets easier and easier. Plus you will be getting the satisfaction of watching your credit card balances go down for a change.

How Much Credit Card Debt Do You Have?

How Much Credit Card Debt Do You Have?

See results

Always pay with Cash

Pay with cash, not credit
Pay with cash, not credit | Source

The Final Step To Becoming Debt Free

Most people will have a time when some extra money comes into the house. It could be a tax refund, a raise at work, even an inheritance you didn't know was coming. Whenever that happens, just apply the one third rule. One third goes to paying off debt, one third goes to emergency savings, and one third goes to fun money.

A funny thing starts to happen as you learn to live on a cash basis, and as you watch your credit card balances decline. You start to enjoy living within your means. You find that you are stressing less about money, and you might actually find yourself feeling sorry for the people with lots of expensive "stuff" that they bought with debt.

And when the day comes when you finally pay off that last credit card, you will have a huge sense of satisfaction, knowing that you have done what many people attempt, but few actually do. You have paid off all of your debt and are living debt free.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.


    0 of 8192 characters used
    Post Comment
    • MauKat profile imageAUTHOR


      8 years ago from USA

      That is my problem with credit. It is too easy to get whatever you want and think you will just pay for it later!

    • JessicaSmetz profile image

      Just Ask Jess 

      8 years ago from Phoenix, Arizona

      I went through living beyond my means, and now i have to pay for it. It is so easy to do when you have credit!

    • MyOfficeBooks profile image


      8 years ago from Brisbane

      Very practical. If only adults understood the concept of teaching by example, then there might be a way to end the love affair with credit...It's a cycle that passes on to one generation onto the next. Let's hope that those in financial trouble read this article and put it into practice!

    • profile image

      Arthur Glass 

      8 years ago

      Thanks for the thoughts you are revealing on this website. Another thing I would like to say is that often getting hold of duplicates of your credit score in order to inspect accuracy of each detail will be the first measures you have to accomplish in credit repair. You are looking to clean up your credit profile from damaging details problems that screw up your credit score.

    • profile image


      9 years ago

      lending rates shud be reduced and govt shud encourage small biz.

    • profile image

      Transportation Collection Agency 

      9 years ago

      Superbly written hub....This can help just about anyone who has debt struggles.

    • profile image


      9 years ago

      Very useful hub about getting out of debt. Really liked your note on fun money, so important to be realistic about your financial goals. Thanks for sharing.

    • profile image

      mr. fisherman 

      9 years ago

    • profile image


      10 years ago

      "You are spending more than you earn"...It's funny how so many people just do not realize that. This is a great article, however I do want to say something about "Paying cash for everything." I recently switched banks and signed up for a program. Every time I use my debit card the bank will round the purchase up to the next dollar and deposit the change into my savings. The bank will match the deposits 100% for the first three months and 5 percent after. I have saved about 83 dollars in my first two months. This may not seem like big savings but its money I would not have saved other wise. I took that money and sent it to my credit card company. There, 83 dollars from pretty much no where...I didn't even miss the change. Just a thought...check with the bank to see what type of programs they have to aid in saving money...even small amounts of money.

    • DonnaWallace profile image

      Donna Wallace 

      10 years ago from North Carolina

      This is very good advice. While it's hard to wipe out credit card debt, it is possible with a plan. This article is very helpful.

    • profile image


      10 years ago

      Pretty good post.Thanks

    • profile image

      Getting out of Debt 

      10 years ago

      Paying everything in cash is the best option as one is aware how much he has in his pocket and will spend according to the needs. This practice goes a long way in minimizing your debts.

    • Brigitte Synesael profile image

      Brigitte Synesael 

      10 years ago from Surrey, British Columbia

      Great hub! I wrote one with similar ideas on the same topic. I also like your idea about having "fun" money. That's why I suggested to cut down coffee shop coffees and cut down dinners out. Not eliminate them. I think our 2 hubs compliment each other nicely. I'm looking forward to reading more of your work.

    • MrSpock profile image


      10 years ago

      This is a good step by step. It definitely feels great when you don't owe anything at all on your credit cards. Also, it can provide a person with the possibility of taking on a great opportunity when one comes along!

    • Which4u profile image


      10 years ago from Leicester, UK

      I'm not sure if you have access to something similar in the US but in the UK we have something called a balance transfer credit card, which allows you to transfer all of your debt to the card while paying no interest for an introductory period (up to 16 months with Virgin).

      This allows you to split the total debt by the number of 0% months without accumulating further interest.

      There is a small transfer fee involved, which was introduced to stop people simply moving their debt around without actually paying it off (between 2-3%) but in most cases this is significantly less than the interest you would be paying on your current credit card.

    • MauKat profile imageAUTHOR


      10 years ago from USA

      Don Draper:

      In my opinion debt settlement should be the absolutely last resort. It hurts your credit rating and it doesn't force you to change the habits that got you into debt in the first place.

    • profile image


      10 years ago

      It's best to learn to manage money from young. Those who are frugal as kids will never run into credit card debts even until old age.

    • profile image

      Don Draper 

      10 years ago

      Ahead of investing any more of your time and effort in credit card debt elimination, you should consider if debt settlement is the right option for you. The first question you have to ask is "Do you have a legitimate financial hardship?"

    • profile image

      Melvin Campbell 

      10 years ago

      Came across your hub in the nick of time. It's a good reminder to stick to my original plan of eliminating the unnecessary debt. It's very difficult.

    • Ms Chievous profile image


      11 years ago from Wv

      I will try really hard to stay with your advice. I love the Fun Money!. Getting out of debt is going to be a new years resolution for me.

    • profile image


      11 years ago

      Great Hub on how to work on getting yourself out of credit card debt. It is such an evil and if not properly controlled can end up controlling your financial life.

      Keep up the great work!

    • profile image

      Nisha shan 

      11 years ago

      I agree that it involves some will power, but I personally base my strategies for spending less...

    • lifeguard101 profile image


      11 years ago


      Your info. is very helpful if I new everything you mentioned maybe I would have A one credit. Oh by the way my wife likes your hub

    • james1122 profile image


      11 years ago

      What a great hub this is!

      The amount of quality content here is staggering, and never before has this type of information more relevant than in the height of a recession! Great Hub!!

    • midnightbliss profile image

      Haydee Anderson 

      11 years ago from Hermosa Beach

      lots of great tips and information. thanks

    • The_Drizzle profile image


      11 years ago from The Far Side of the World

      I think your point about fun money was spot on, especially if you just find some cheaper ways of doing the things you like doing. Go to a park with home brewed coffee instead of Starbucks, cut back eating out every night to one or two nights a week and other ideas like that can help you get your debt down while not really sacrificing your quality of life.

    • bgamall profile image

      Gary Anderson 

      11 years ago from Las Vegas, Nevada

      Credit ratings are more important for some people than others. Sometimes you just have to walk away, especially if credit card companies are loan sharking, borrowing at 1/2 percent and lending at 20-30 percent. And the government allows this scam to continue. I say that while a good credit score is crucial to many people, that it is not to everyone, especially if the debt is very large.

    • MauKat profile imageAUTHOR


      11 years ago from USA

      MarioByDesign: You are correct that it is hard to track expenditures if you pay cash, but for some people it is impossible to get out of debt if they even own a credit card. (I know, I am one of them!) Like you say in your hub, you must have the discipline to pay off your credit card every month, then using it to track expenses is a good idea. Some people also use a debit card for the same purpose and that would be the same as paying cash.

    • MarloByDesign profile image


      11 years ago from United States

      Nice hub, but I want to respectfully disagree with your comment "pay cash for everything" - I use my credit card for all purchases to track spending (and wrote a hub about it), but that is my is very hard to track expeditures if you only use cash!

    • profile image


      11 years ago

      Great HUb , Thanks :)

    • GeneriqueMedia profile image


      11 years ago from Earth

      Very well done! Maybe some more pictures? Or a video? Otherwise, the text is done well. I've not spot any errors, though, I'm not an english major.



    • MauKat profile imageAUTHOR


      11 years ago from USA

      Hi Renegade Coach, you are right. My method is a modified version of the Snowball method. It works quite well. You are also correct about wants and needs. There are actually not many needs and lots and lots of wants!

    • Renegade Coach profile image

      Renegade Coach 

      11 years ago from Langley, BC

      Excellent hub; great tips. I think your method for paying off debt is also called the snowball method. Although hard to getting it going it is energizing to see the debt melt away. I think part of today's financial crisis is that we have blurred wants with needs.

      Anyone in debt would be wise to follow your advice.

    • my-success-guru profile image


      11 years ago from Upstate NY

      Great tips!!! I'm rating it thumbs up!!! Join my fan club and let the world know about your great insights!!!

    • profile image


      11 years ago

      The most common credit card debt is cause by the habit of spending money you don't have and can't afford to pay.

      It is easy to spend when you got a credit card, but hard to pay when you don't have the money.

      It's harder to resist when you go for a shopping trips when the mall is having year-end sales.

      Nothing bad about having a credit card, provided you can pay in full the balance every month.

      Treat your credit card like a charge card where you're using it as an alternative tool for cash when making purchases. You've the cash but is using credit card for convenience purposes. And every month end, when the statment arrives, you pay what you've spent in full.

    • MauKat profile imageAUTHOR


      11 years ago from USA

      AMcElvain ,  when you become debt free and your savings are large enough you will find that you don't really need to worry about your credit rating any more.  Except for buying a house, everything else you should pretty much pay cash for.  I paid cash for my last car and that was a fun check to write!  

      Erick Smart, you are right about that! When my husband and I both lost our jobs about the same time we were able to live easily on unemployment because our bills were so low.

      Thanks everyone for all your kind comments!

    • Lgali profile image


      11 years ago

      Really informative hub dear good points

    • profile image

      Erick Smart 

      11 years ago

      For years I had too much debt on a credit card and I finally got sick of paying so much money on interest and did something about it. Luckily I was able to pay them all off before the recession began so the economy may hurt but not nearly as much if I still had all those bills to pay every month.

    • profile image


      11 years ago

      You have certainly explained things ver well indeed. I'm sure a lot of people will use your system in the future to free themselves from debt. Great read. georgie

    • AMcElvain profile image


      11 years ago from San Diego, CA

      Thank you for this very informative article. I developed a spreadsheet for all my debts, and it was horrible to look at the high numbers. But you were completely right: I chose a smaller balance card to attack first, and what a happy day when that baby got paid off. Exhilaration. One concern these days is that the credit card companies may close your accounts automatically to cut off your credit access, and that can reflect poorly on your credit rating. One tip is to pay down your important emergency card and leave a balance of $100 on there so they don't close it, but lock up the card and only using it in dire emergency.

    • jdnyc profile image


      11 years ago from California

      Great hub! It is a topic that many people have written about, but it is always nice to hear the motivating words from someone who is sharing from personal experience! Thanks!

    • acs1122 profile image


      11 years ago from Maryland

      Wow, I want to pay off what I owe and live debt free. It must be nice! Thank you for this valuable information, and much needed encouragement.

    • soni2006 profile image

      Rajinder Soni 

      11 years ago from New Delhi, India

      Really informative hub dear. I will plan according to your steps and think positively. Lets see when I will get out of my huge credit card, mortgage, and personal loan debt.

    • Ktoo profile image


      11 years ago from Atlanta, Georgia, USA

      Great info, thanks!

    • MauKat profile imageAUTHOR


      11 years ago from USA

      Thanks Whikat!

    • profile image


      11 years ago

      I think you hub is very informative, easy to understand, nice hub.

    • Socio-Image profile image


      11 years ago

      Well said.

    • MauKat profile imageAUTHOR


      11 years ago from USA

      You are right. Sometimes the circumstances or the economy makes it very difficult for people to stay out of debt. I can tell you from experience, living the low class lifestyle without debt is much better than having all the "toys" and a huge amount of debt.

    • Socio-Image profile image


      11 years ago

      I'm afraid most people had pressures upon them that restricted their ability to practice self control. I believe that many were laid off from their job and had to rely on credit. Many were unaware of the markets and when they changed they went with them. Some definitely did not practice self control but it was more of a combination of the markets and job instability. Fortunately I think your advice could be useful and if they are determined, and have the option to live with a so called "low class" budget, then they can get out of debt.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
    ClickscoThis is a data management platform studying reader behavior (Privacy Policy)