7 Easy Steps We Used to Crush Credit Card Debt

Pinterest Hidden Image

Easy steps to pay off credit card debt

Five years ago, we were able to pay off the last of our credit card debt. I can’t believe it’s been 5 years since that last payment was sent and we were credit card debt free! Really, time has been flying by. We’ve done a lot of stuff since breaking the chains of debt, and I’m excited that we’ve been able to do it.

My wife and I are living a much better life sans consumer debt (minus our mortgage). In fact, we’ve been able to save over $180,000 in cash since then. BOOM!

It took four years of our life, but we were able to prevail. I stand in front of you today completely credit card debt free. Yes, I was someone who racked up a lot of credit card debt (add on top the over $25,000 in consumer loans) and only paid attention to the minimum monthly payment.

My head was in the clouds and I was just enjoying the ride. Credit cards made spending easy and a little fun. I didn’t have to worry about paying it all back. It was someone else’s money, right?

It wasn’t until I realized our minimum monthly payments were higher than my mortgage payment. That’s when it was time to get serious. It was time to smack back that debt and live a more financially sound lifestyle. The game was on and the debt was going to lose!

How We paid Off $50,000 of Credit Card Debt

There are many others that might have more or less credit card debt, but we all got into it for one reason.  We spent way more than we made.  Simple and to the point.  There might be many “reasons” why we get into debt, but it all boils down to spending more than one makes.  It doesn’t matter if it is due to compulsive spending, medical bills, emergencies, or anything else.  If you spend more than you make, then you will be in debt.

I have written a few times about why we got into debt.  There were many reasons, but it all boiled down to spending more than we were bringing in.  I built a business, funded it with credit cards, bought a Jetski, and funded vacations on credit. The business failed and the Jetski broke down. All I had to show for those were the monthly payments of debt.

I loved credit and it loved me. Unfortunately, our relationship was destined to fail.  Credit cards allowed me to get things that I couldn’t afford and charge it to my future self.  If I had known what I know now, I wouldn’t have gotten my first credit card in college.  I would have taken the time to learn more about credit and use it in a wiser fashion.  I can’t take back what I did with credit, but I can use that failure to teach me what not to do.

Luckily I learned from my mistakes and am not scared of credit at all. In fact, I use it regularly, but in a wiser fashion. I know what I’m doing now and haven’t paid a dime in interest since paying off the credit card debt.

Here are the steps we used to pay off the $50,000 and the $25,000 in consumer loans. Yes, over $75,000 in debt we crushed in four years. It’s possible and hopefully these steps will help you get there.

Step 1 – STOP Spending Money Without Thinking

This one may sound easy, but it is by far the hardest.  You have to figure out why you are spending so much money.  I was spending in order to fund my business, along with just buying things that I didn’t need.  I was purchasing to satisfy my wants.  It is time to figure out the difference between wants and needs.  I took a hard look at my finances and realized that I needed a change.  I shut down my profitable online business, stopped eating out, cut our cable, and created detailed grocery lists.  I took my lunch to work every day as a way to eat better and save a lot of money.  These are the things that I did to stop spending money.  Beyond paying your regular bills, you need to figure out where the rest of your money is going and cut off the spending.  It may be harsh, but it is important.

If you haven’t done so already, I highly recommend signing up for a service like Personal Capital or Mint.com. Seriously, both of them changed my financial life. While I started out on Mint, I moved to Personal Capital because it was easier to use and didn’t have all these ads irritating me. It even did a much better job at bringing in my investments (yes, I had them even while in debt!).

Step 2 – Pick Your Debt Payoff Method

Once you figure out how to stop spending money, then you need to choose a debt payoff method.  There are quite a few to choose from, but the two main ones are the Debt Snowball and the Debt Avalanche.  If you want to know the difference, then check out my snowball versus avalanche breakdown.  I chose the Avalanche method because it made mathematical sense for me (key note there!).  I used my emotions to get into debt, but I wanted to take them out of the equation.  By using the Avalanche method, I was able to save thousands of dollars worth of interest payments.  That was my emotional win.

[clickToTweet tweet=”My emotions got me into debt, which is why I used math to get me out! #debtavalanche” quote=”My emotions got me into debt, which is why I used math to get me out! #debtavalanche” theme=”style6″]

To be very honest, it doesn’t matter which method you choose. The only way you will get out of debt is if you choose a method. There are no winners here by choosing one over the other. If you choose something, you’re a winner! Remember that and move forward. I’ve even seen people start out with one method and switch. You can do it month by month. Just start today!

Step 3 – Stay on Target and Focused

Welcome to the next hardest step.  Paying down debt is not easy and it will usually take some time.  We all don’t have the luxuries to just pay off our debt in a couple of months.  It will most likely take years.  It took me 4 years to pay off my credit card and consumer debt (around $75,000).  It took longer than some, because we saved along with paying down the debt.  We worked hard to make sure we stayed on target.  There are so many temptations that occur in everyday life, but you have to understand your goal.

Do you want to be buried in debt or would you rather have financial freedom?  I chose financial freedom.  Don’t be afraid to tell your friends or family that you can’t do something because you can’t afford it.  You may not want to irritate your friends or family, but these are necessary changes.    If they love and respect you , they will understand. Paying off debt is about you becoming a better person and more financially stable.  You have to do what ever you can to stay on target.  I made some simple changes along with harder changes to make sure I stayed on my debt payment plan.

Step 4 – Make More Money

You can only save so much, so there might be many times where you just don’t make enough money to accelerate your debt repayment.  There are quite a few ways to make more money besides your full time job.  I made money by selling things on Craigslist, selling on eBay, taking surveys (yes, this can work), starting a blog, and freelancing on certain projects via Upwork.  I worked hard each and every night to make a little extra cash that I could throw on my credit card payments.  You have to think outside of the box when you are paying down debt.  Think of something that you are good at and go see if you can make money from it.  Don’t spend money to start a side business though.  That would be unwise.

If you can’t think of ways to make extra money, then check out our making money section. This has articles about different ways to earn extra money. Here is our best and biggest money making post with over 100 ways to make extra money.

We can break a few of these ideas down for you as well into these great money making articles…

Step 5 – Learn How to Save More Money

As you can probably imagine, I wasn’t much of a saver when I was in credit card debt. Actually, that mindset happened before, but credit cards and spending just pushed savings to the back burner. I didn’t care about saving money. I was having the time of my life. I really wish I knew then what I know now. It hurts to realize what you did to yourself with your needless spending.

Just look at the power of compound interest. Goodness that’s some powerful stuff. I realized I was leaving money off the table for  myself later down the road and for emergencies in general. I wasn’t saving much for retirement, wasn’t investing, and wasn’t socking away cash for emergencies. I was doing it all wrong. I had to teach myself how to save money.

Fast forward some years, I’m still stashing cash for emergencies, I’m investing, and saving for retirement. I brushed off the “scared of investing” vibe and opened an Betterment account in 2012, a month after the credit card debt was gone. It was the best decision I’ve made with regards to investing. They make it so easy a caveman can do it (haha, Geico!). I’ve recommended that service to anyone that will listen. You can also check out WealthFront as they are a great alternative to Betterment.

It seems we really make saving money much harder than it needs to be. I have an entire section on this site dedicated to it. Saving money is really not that hard. We just have messed up priorities. We can’t differentiate between wants and needs and that needs to stop. Once I stopped using “need” for everything, I realized I could do without so much more and keep more money in my pocket. It’s all a mindset people. Change it and your financial freedom will follow!

Step 6 – Celebrate Your Successes

Here was my most important step and one I think everyone should partake in.  Since we know that spending money is very emotional, then we have to create celebration moments.  I took the emotional aspect out by using the Avalanche method, but you can’t take it out entirely.  So, in order to make sure that I stayed on my target, I created celebration steps.  During times in my debt repayment, I would celebrate when I paid off debt to reach a certain level.  If I paid off $5,000, I would go out and celebrate with my wife.  Now, I wouldn’t go on a spending binge, but I would go out to eat and have a beer.  I paid for that in cash, so I wouldn’t add it to my credit card debt, but it was important.  Any time I would reach a new milestone, I would celebrate.  This step kept me so motivated and allowed me to keep my head up.  Debt likes to keep you down, so you have to make sure you figure out ways to keep your head up.

Step 7 – Continue Your Financial Education

One of the biggest motivational wins for me was when I started branching out and learning more about money. Before, I know how to make money and I surely knew how to spend it, but it wasn’t until I dug deep and learned how money affected me that I changed my financial life. It’s been three years since I paid off my last credit card, but I’m still learning. I have learned how to start investing and found some cool brokerages to use. I’ve found new tools to help me save (like Digit) and keep me abreast of my money (Personal Capital). I’ve found better savings products than just the typical bank.

Related: Hate bank fees? Here are 12 banks offering free checking accounts.

The key is to never stop learning. While the concept of money is pretty cut and dry, there is always something out there to learn. Heck, there are over 800 articles on this site going through the different aspects of money. I will never stop learning and if I think I’ve learned it all, then I know I’m doing something wrong. If you don’t know something about a financial product you are seeking, then take the time to sit down and educate yourself. That’s the only way we can change our financial future. Knowledge will always be power!

Alright everyone, now you have seen how we paid off my $50,000 worth of credit card debt, plus another $25,000 in consumer loans.  It was a long journey and a very hard one at that.  I don’t wish debt on anyone, but it has taught me a lot about myself and how I handle problems.  We took the debt by the horns and rode it right out of our life.

One thing that makes me different is I’m not afraid of credit cards anymore and in fact, I use one for all of my purchases. It’s not about being scared to use credit, but knowing how to use it wisely. It wasn’t the credit card’s fault that I used it, it was my own. I picked it up, I swiped it, and I didn’t pay it off. This debt was on me, but I fixed the problem.  I know you can as well.

Do you have debt? If so, what is a step that you think is important to get out?


Leave a Reply

Your email address will not be published. Required fields are marked *


  1. Grayson,

    I’ve always operated under the assumption that in order to get into huge credit card debt, you’ve got to make a huge amount of income since credit card standards have to be aligned for long term profitability. What are your thoughts on this?

    Also, what are your thoughts on companies like NerdWallet, who make the majority of their money off selling credit cards? It’s a lucrative business model, but could you live with yourself for doing this given your recent CC experience?



    1. I wouldn’t say that was true regarding high income and high credit card debt. While, yes, they can be somewhat correlated, but I was easily able to get well over $100,000 in credit line while only making $40,000. I didn’t use the entire credit line, but you can get credit cards easily or at least you could when I had them. I got all mine before the financial crisis, so I don’t know what the standards are now.

      I have no problem with their business model. They are a business and credit cards are around for anyone to use. I never blame a credit card for debt problems. It’s not the credit card that is pushing people to spend. It’s their mentality and mindset. This is why I went back to using credit cards after I paid them off. I haven’t carried a balance in three years and have saved a lot of money on my purchases, plus free travel.

      I wrote a post on Sprout Wealth earlier this year that sums out how I feel about credit cards. I don’t blame anyone but myself for doing what I was doing. I knew the outcome of my actions, but I didn’t care. I little plastic card and the company behind it isn’t the problem. It’s our consumer culture. I’m an example of someone who can go from credit card debt to using them responsibly. They are just a tool.

  2. Love this post, Grayson! I really like step six. Even after your success of getting out of credit card debt, you made the point to continue your financial education. I think this is so important!

  3. My Wealth Desire says:

    I accumulated credit card debt due to salary problem. I know the pain feeling of huge debt but this is not the end of our financial world.

    You have a profound steps that I can relate. Those six steps are simple and effective. I start paying off my credit card debt by cutting the cards even though I did not pay down the balance. I do it to avoid using it again every time I need to purchase. This is simple to stop my temptation to swipe it again.

    1. What is a salary problem? Are you saying you didn’t make enough to pay for your expenses?

      I never cut mine up, but just put them away. It worked for me.

      1. My Wealth Desire says:

        We received our salary too much late.

  4. My Factoring Network says:

    Loved the post!! I have gone through various posts and blogs which helps us to manage our debt and inspired us for more saving. After you success of getting out of debt there and by going through the post I will also set the standard and a goal plan to be out of debt and do not get involved in any debt cycle.

  5. Cash In A Snap says:

    Good post to go through !! It has become difficult to manage our debt specially when the time of financial difficulty. Your tips are really valuable and standardised. In today’s date the main debt is the credit card deb which all of us are going through. Specially the middle level consumers are a prey. We can use this post as a guide to be debt free. Thanks for sharing.

  6. That’s awesome, Grayson, congratulations! I can only hope that I’ll be saying these words about myself someday. I have a ton of student loan debt that I took out during grad school, mostly for “living expenses”, so in a sense my issue was also about spending. (I probably *could* have found a way to go to grad school without taking out loans; I just didn’t really explore any other options, or consider reducing my spending.) Live and learn.
    Anyway, this is so encouraging to me! It’s only recently that I’ve started to become aware of the importance of keeping track of your money, and I have a long way to go in terms of debt repayment, but it’s great to know that it’s possible. 🙂

    1. I wish you the best of luck with your debt repayment journey Sarah. We can’t change what we did in the past, but we can just use that knowledge to change our future.

  7. Jayson @ Monster Piggy Bank says:

    $50,000 is a really big amount of money, Grayson. Your step-by-step process is really doable and must be effective. Thank you for sharing your steps, which I can use because I am paying off my debt less than $10,000.

  8. Your accomplishment is beyond commendable. Most of my debt is student loans and ironically I’ve been a saver for years now. I’ve just been deathly scared of those loans. Now I realize that I can save all I want but I’m not going to out save the amount of interest accruing on those loans, so it’s time to get busy. Steps 2, 3, and 4 will help me on my way. Thank you!

  9. Husbands machine shop in trouble. 52k credit card debt and $140000 business LOC signed personally.. Sold our home. We rent. We work to pay his business debt. Business is up and down. He has been diagnosed with major depressive disorder. But he wants to work….where do we begin?

  10. I’m in a similar situation, how long did it take you to clear your debts?

    1. It took me four years, but I also saved money at the same time, so it could have been a little less.

  11. I just wanted to say this was so empowering for me. I keep trying to consolidate and be smarter, but I just make the problem worse. It really is an emotional problem for me – I love the thrill of getting what I want when I want it! I love to travel, multiple international trips every year! I work so hard, I feel like I’ve earned the lifestyle, but I guess I really can’t afford it, and the hole gets deeper. Right now I am looking at the same situation you were in regarding credit cards. My question to you is — what were your monthly expenses at that time? Housing, car, utilities, etc.? Additionally, and if this is too private, a range would still be helpful — how was your salary during that time? I am motivated by your post and know that I can do this if I focus, I want to eliminate my internal excuses around “he probably made more”, or “his rent was probably cheaper and he split it with a spouse” etc.

    Thank you for your post and your feedback!

    1. Hey Elle,

      First things first, I felt the same way regarding “earned” it. We don’t earn a lifestyle, we create it in our heads.

      My monthly expenses (including the debt payments) were around $3000 a month. I was making $37,000 at my job and my wife was making $30,000. We did split our expenses, but we didn’t split the debt payments as I created those before we met and didn’t want her to responsible for my stupid mistakes.

      The biggest issue affecting you it comparing yourself to others (myself included). Who cares what other people make. That’s not an excuse and it just keeps you in the same hole and getting deeper. Let me tell you that once you get the debt paid off and learn better money management, then you can enjoy the life you feel you’ve earned. I don’t worry about vacations anymore. I can take them when I want because I have money saved up, no debt (minus mortgage), and I’m self-employed. Getting out of debt helped me also realize I was living in a fantasy world I created based on TV shows and wanting to be cool in the eyes of my friends. Getting out of the hole taught me a lot about myself and how I treated money.

      I wish you the best of luck and know you can do it!

  12. 4 years! What a slog. It must have felt like being in modern day serfdom.
    Congratulations for pulling yourself out of that hole.

  13. We lost our home to a flood back in 2010. When we bought out new home there were several things we did not like about it. Plus we needed to finish out a basement for more living space. Stupid us wanted everything done right now so the only way was credit cards. We now ower over $50k. When I realized all the payments combined is double our mortgage, I about died. I have been slowly working on paying things down. We make a combined salary of $150k. Should this be a sufficient salary to get all these paid off?

    1. Yeah, when we bought our house two years ago, we knew we needed to keep the renovations in the budget we had set. Still have projects we need to complete, but we’ll get them done.

      As for $150k being enough, yes, that should be more than sufficient. I earned about $45k a year and paid off my $75k in total debt off in four years. With $150k, you’ll need to look at where your money is going and funnel it into debt repayments.

  14. Thanks for this post. I am 61 years old and over $50000 in debt. $25000 plus in credit card and a $25000 loan. This loan was used to pay off other credit cards. On top of that is a car loan and mortgage. I’ve been trying for years to get control and get frustrated at how long it takes. I also have a problem with wants and needs. Having depression I can mold anything into a need that is truly a want. Your article tells me I can pay this debt off and hopefully retire in 5-6 years. That is a big relief as my husband is 67 and still working full time.
    You have given me hope that I too can do this.
    Thank you

  15. Great post- simple and easy implementable steps for anyone to follow that is in debt. The most important, as you mentioned, #1 stop spending. I love how you pointed out that you guys were spending more than you made (key piece). Thanks for sharing!