It’s official. I have Credit card debt! Now, I could bury my head in the sand and pretend it’s not there. Or, I could tackle the problem head on! Well, I’ve decided to tackle this problem head on! I’m not alone. According to a February 2022 Lending Tree article, the average American family owes approximately $6,270 in credit card Debt. Yikes! Because that’s the average, that means many Americans owe a lot more than $6,270 in credit card debt. Credit card debt is bad for a whole lot of reasons. One big reason is that the interest rates are typically high, and once a consumer is in credit card debt, it can be really difficult to get out of debt. For that reason, I’ve decided to focus on getting out of debt. So, without further adieu, let’s dive in to see how I’m going to get out of credit card debt.

How Much Credit Card Debt Do I Have?

In my January credit card debt progress report, I reported that my credit card balance was $4918.96. That was bad, but unfortunately, it’s gotten worse since then. Here is a snapshot of my current situation.

• Credit Card Balance: $11,107.33
• Interest rate: 15.99%
• Minimum Payment: $194

That wasn’t a typo. The balance on my credit card is over $10,000!!! Yikes!!!

While there are good reasons for this debt, there are also very bad ones. But, in the end, it doesn’t matter. I still have over $10,000 in credit card debt with a high interest rate. So, now I have to do something about it.

The Plan

It’s important that I both a) create a plan to get out of debt and b) stick to that plan! I’m a firm believer in accountability and you can expect that I will be transparent in my attempts to get out of debt. Without further adieu, here is my plan.

A. Mindset

The first thing I need to do is get in the right mindset! The greatest plan in the world won’t work if my mind isn’t right. Wishful thinking won’t get me out of debt. Neither will putting my head in the sand help either. I have to be serious – and I am.

One of the things I’ve decided to do is make paying off my credit card debt a priority. If I put all my other financial desires on hold, I could probably payoff this debt in relatively short order. But, I don’t think that’s necessary in my situation. Even though I could payoff the debt faster, I’ve decided to take a slower approach for more reasons than one. What this means in practice is that I will still be contributing to my dividend portfolio, and paying extra towards paying off the mortgage on one of my rental properties. So, I am not putting everything on pause just to pay off the credit card debt.

But, even though I’m not doing those things, I am nonetheless serious about making the credit card debt a priority and paying it off as quickly as possible.

B. Stop Using My Credit Card

There’s an old saying that goes something like this: “If you find yourself in a hole, stop digging.” I agree. If I want to get out of credit card debt, then I should stop using the credit cards! Make sense right?

This can be sometimes easier said than done. That’s because of how easy it is to use the credit card. For example, if I decide to go to Starbucks, I can pay with my phone. But, my Starbucks app is linked to my credit card. So, for convenience, if I pay with the Starbucks app, I am in essence paying with my credit card. Of course, I’m aware that you can simply scan and pay with cash, but you get my point. It’s easy to use your credit card, even if you don’t have the physical card in your wallet.

That being said, I am very conscious of that fact, and so now I take care to ensure that I am only spending cash or using my debit card. Additionally, I’ve taken the liberty of removing the credit card from my wallet. It’s very convenient to use the card if it’s readily accessible to me, and so I avoid the problem my not making it so accessible.

It takes will power to refrain from using the credit card. A lack of will power got me into this mess. I am counting on a renewed and refreshed round of will power to get me out of it!

C. Pay Extra Towards The Debt

The debt is not going to pay itself. What’s more is that paying just the minimum is absolutely not ideal. It’s going to take forever to get rid of all that debt if all I did was pay the minimum. What makes the most sense is for me to pay extra towards the debt.

The key, however, is defining what “extra” means.

As explained earlier, I still plan on maintaining the minimum contribution to my dividend portfolio. Additionally, there is one rental property that I am trying to pay the mortgage off as soon as possible. So, for me, “extra” means any amount of money above those payments will go towards paying down the credit card debt.

I realize that this is not the most optimal way to do things, but as mentioned elsewhere, personal finance is personal.

Finally, on this matter, it helps to have a realistic timeframe to get rid of this credit card debt. I initially wanted it to be gone by the end of April of this year, but I’ve modified my timeline a bit. I’ve now set a goal to eliminate this debt by the end of the year! It’s going to take hard work and dedication but I know I can do it. Wish me luck.

D. Driving For Payments

Earlier this year, I announced a new project, namely, Driving for Dividends. The concept is single. When I’m able, I drive for both Uber and Lyft. Then, I take the income I make, minus taxes, and use it to buy dividend stocks. This is my side hustle.

Well, I’ve decided to modify the project somewhat. Instead of driving for dividends, I will be driving for payments! Specifically, the income I earn from doing rideshare will be used to pay down my credit card debt, instead of buying dividend growth stocks.

Once, I payoff the credit card debt, then I will use the extra income to purchase dividend stocks. This approach helps prioritize eliminating my credit card debt as soon as possible.

For what it’s worth, the Driving for Dividends/Payments project has been put on pause until the end of April. It’s hard to explain, but once the end of April comes, I’ll be able to resume the project again.

E. Track My Progress Regularly

Having an accountability partner helps. One of my friends served as my accountability partner once, and I was able to fulfill a New Year’s Resolution as a result. I’m hoping to repeat the process here. The difference being that I will use my audience (namely, you) as my accountability partner.

Here’s how.

On a regular bases, at least once monthly, I will be posting on my progress towards paying down my credit card debt. You can expect a post on this topic around the15th of every month (at the bare minimum). Regardless of when I post, I am hopeful that I will be reporting a reduction of my overall credit card balance. After I make a post, you will be able to leave a comment.

The goal is to get out of credit card debt by year’s end and that’s exactly what I’m going to do.

Conclusion

The bad news is that I have over $10,000 in credit card debt! The good news is that all the big expenses (that were expected) are now on the credit card and so I don’t anticipate any more big expenses in the future. Of course, there’s always Murphy’s Law to contend with. But, as of right now, I am just focused on paying down the debt.

It’s going to take me some time to pay down this debt. But, I am determined to be transparent along the way.

What did you think of this post? Do you have any credit card debt and if so how are you tackling it? If not, how did you manage to get out credit card debt?

Let me know your thoughts by commenting below.

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