I had to make sacrifices in order to get out of debt.
I paid beyond the monthly amount faithfully and some times I made two payments in a month. I also called the banks and asked them to lower my interest rate. They lowered it to about 18.99% when they saw that I was making substantial payments.
I then did some research and I found out about balance transfers. So basically, you transfer a balance to another card. The smart thing of course is to transfer it to a card with a lower interest rate. You are charged either a set amount or a percentage of the transfer (usually the greater amount) and that will be added to your balance.
I found a card that offered 0% APR for one year. So I transferred some of my balance to that card and I had no interest for a year. I swore to myself that I would pay the card off before the year ended and the interest accrued. And I did just that. My credit limit for that card was less than my balance on the original card, so I still had a remaining balance on the original card. So at that time I was paying 3 cards.
So I lowered one balance but I still had to work on paying those 2 cards off (albeit, one cards balance had significantly decreased). I never had an issue with making minimum monthly payments my issue was always with the amount of time it would take me to pay the balance.
In fact, banks tell you to pay the lowest possible amount, and then you find yourself with a balance that never seems to decrease. I encourage you to at least pay two times (2xs) the minimum amount. Never pay just the required amount because if you do, you’ll never finish paying it off.
I then told myself within 6 months I am going to pay these balances off. I constantly saved money as well as paid twice the amount due. Once the six months came and I had saved enough money, I gave them their money.
I didn’t think twice about it. Owing someone money is not a feeling I like. I truly feel enslaved to that person until I pay my debt. So when it was time to pay up, I most certainly did, without any hesitation.
The chains fell from my feet.
Sacrifice your luxuries for 6 months, a year, two, however much time you may need to purchase your freedom. The feeling of freedom is priceless. And once you purchase your freedom, remember how slavery felt and make sure that you never go back there again.
Stay tuned for Part 3, where I talk about the perks of responsibly using your credit card.