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We Are Officially Credit Card Debt Free!

June 16, 2020 | Leave a Comment

credit card debt free

COVID-19 definitely put a damper on our family’s debt freedom journey (at first). However, my husband has since gotten a new job and we encountered some windfalls that have allowed us to pick up some of the slack and refocus on our debt-free goals. Now, (insert trumpets) we are credit card debt free!

Being Credit Card Debt Free

Prior to this, we had about $2,000 in total credit card debt. We only had about $500 left to pay off though. So, once we got a windfall, we paid off the last account balance of $498.21, and just like that, we are free of credit cards once and for all.

Honestly, it feels pretty weird! I know it will take of lot of dedication to continue being credit card free. Now, we are one step closer to financial freedom and the ability to put that money towards other debts.

What’s Next

And that is exactly what we have planned next!

Because we no longer have credit card debt to pay off, we are going to refocus that money on paying off the tool loans, the car loan, and student loans. To do this, we are going to focus on them in this order…

  • Tool loans – roughly $10,000 owed
  • Car loan – $19,216 owed
  • Student loans – $24,185 owed

Once these things are severely paid down, we will focus on paying off tax debt and getting any other financial needs situated. Now, you’re thinking, how long will this take?

I’m hopeful it will take us between two and three years to be debt-free. The plan is to add some additional funding to our emergency savings over the summer and then attack our debt full-on. Every extra penny we have will go towards paying off each of these accounts (in that order). Any windfalls, such as cash gifts, bonuses, and over time will also go towards debt repayment.

Once we are debt-free, we will be looking to buy a home. Initially, that will be more debt, but because we are going to be financially free, it will be easy to swiftly pay the house off. Being credit card debt free has us both optimistic and thinking about our debt-free future! Readers, how did you feel after paying off all of your credit card debt? 

Read More

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Amanda Blankenship
Amanda Blankenship

Amanda is an editor and writer. She has a passion for sharing information that helps people and communities to better themselves in some way. In addition to writing online, she also freelances for local newspapers in her hometown of Charlotte, NC.

www.savingadvice.com

Filed Under: Credit, Debt Freedom Progress, Get Out of Debt Tagged With: credit, credit card debt, credit card debt free, credit cards, debt free, debt payoff, paying off debt

3 Consequences of Abandoning Credit Card Debt You Never Knew About

April 23, 2020 | Leave a Comment

Consequences of abandoning credit card debt

Anyone who has followed the blog over the past few years knows I’m no stranger to letting things fall into collections (and later having to pay back WAY more than I owed). I’m not proud to say it has happened to me on several occasions now. If you are thinking about letting some of your debts go, you should be fully aware of the consequences of abandoning credit card debt before you do.

The Consequences of Abandoning Credit Card Debt

As mentioned above, I have abandoned debt in the past. Eventually, I wound up having to pay it off to further myself in life and on our debt-free journey. However, many people don’t consider the consequences of ditching your debt that way.

For me, abandoning my credit card debt meant paying way more than I’d originally owed. One credit card I stopped paying on when I owed $500. In the end, after settling with a collections agency, I wound up paying nearly twice that.

1. Your Interest Rate WILL Start to Climb

Before your debt is handed off to a collections agency, the credit card company will try and work with you. They give you about 60 days before it is reported. As soon as you miss a payment though, your interest rate will begin to change.

Your current interest rate is only because you’ve made payments on time and consistently. The first time you miss a payment, they’ll be watching your account and your credit score. Changes in either will likely increase your interest rate.

2. Paying The Debt Back Will Be Close to Impossible

Once that bigger interest rate kicks in, it can be close to impossible to pay back through the credit card company. This is a big reason why so many people choose to abandon their credit card debt. Even once the debt is passed on to collections, the amount is so much more than you initially owed it can be overwhelming.

The best piece of advice anyone can give you if this is how you’re feeling is to call and talk to the credit card company. They may put a hold on the account until it is paid off, but it won’t go to collections and it won’t have as big of an impact on your credit. Most places will work with you.

3. For The Next Seven Years, It Will Haunt You

And possibly longer! Depending on the statute of limitations on debt in your state, any credit card debt you ignore will stay on your credit report for seven years. In some states, it can even be as long as 10 years.

Having marks on your credit report like this can really prevent you from doing important things in life, like buying a home or even getting a job in some cases. Imagine it preventing you from having the credit needed to do these things for a decade!

In the end, it is best to just pay off your debt. Believe me, I learned the hard way. If you do need help or can’t pay your credit card debt right now, call the creditor and research your options. The worst thing you can do is act like it doesn’t exist though. You’ll pay the stiff consequences of abandoning credit card debt.

Read More

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Amanda Blankenship
Amanda Blankenship

Amanda is an editor and writer. She has a passion for sharing information that helps people and communities to better themselves in some way. In addition to writing online, she also freelances for local newspapers in her hometown of Charlotte, NC.

www.savingadvice.com

Filed Under: Get Out of Debt Tagged With: Consequences of Abandoning Credit Card Debt, consequences of credit card debt, credit card debt, credit card interest, credit cards

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About The Author

Amanda Blankenship is a 24-year-old full-time website manager and blogger. She is currently hacking her debt by saving money and investing, all while managing her family and enjoying her adult life.

 


Five Steps To Debt Freedom

Here are five simple guidlines that will help you pay off debt.  

1) Get an emergency fund so you don’t take on debt when something comes up.

2) List your debts. This way you know where you stand.

3) Use the debt snowball. Pay your debts from smallest to largest, or most expensive to least expensive.

4) Avoid new debt. No new credit cards or loans. Period.

5) Go all cash. After everything is paid off, switch to all cash.

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The Free Checklist for a Strong Financial Plan

U of Tennesse Debt Repayment Plan Basics

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Jackie Becks Debt Blog

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