How To Crush Credit Card Debt in 347 Days!

debt free, credit card, debt, freedom You’ll notice I talk a lot about debt and how to get out of it on Finance Fox. Probably because debt was one of the the key reasons I even started blogging. In almost two years of blogging I’ve come pretty far with money, and became debt free. I look at money in a whole in a new way; psychologically and fundamentally as a whole. Impossible has become the possible.

Fundamentally there are two ways to eliminate debt in a small amount of time. You can cut costs or earn more money. I took the latter and combined the two. I simply cut my spending drastically, and increased my monthly income through two additional income sources.

In the same process I also became quite frugal. I know, I know, you’re probably thinking (Eddie, not another person talking about frugality), because let’s face it – Who really likes frugality? Fact is most Canadians think frugality is hopeless. I agree that eliminating debt is not easy, but than again I never expected it to be easy either.

I read this article back in February 2011 which explains that the “average Canadian owes $150 for every $100 they make after tax.” Pretty scary statistic as a whole. Not to mention in today’s shaky economy people are worried about the possibility of interest rates rising, high levels of consumer debt, job loss, and whether they can afford to lead the lifestyle that they want.

As I wrote in this article, I just simply got tired of my debt situation. I wanted change and I wanted it ASAP. I wanted to eliminate my debt as a whole, including my credit card, line of credit and student loan.

So rather than jumping all over the place, I decided to tackle the highest interest debt first. This happened to be my Visa credit card. It only made sense, because at a 19.99% interest rate I was getting clobbered.

What my debt situation looked like when I started:

my debt, credit card debt, visa, line of credit, LOC







Instead of making a bunch of changes at once, I gradually eased my self into debt elimination. I was successful with the route I took and it obviously worked for me.

Here are six steps you can take to crush your credit card debt in 347 days:

1. Asses Your Debt

Make a list of all the places to which you owe money (except for your mortgage). If you are one of those consumers who consolidated their consumer debt into your mortgage, then add the amount you consolidated onto your list. By consolidating your debt into your mortgage you’re only hiding your debt, because no matter how you slice it your debt still exists.

2. Prioritize Your Debt

I prioritized my credit-card debt as the highest priority. Why? The logic was simple – it was most expensive. My credit-card interest rate was at 19.99%. This is the order in which you should pay off your debt – most expensive to least expensive.

3. What’s Your Minimum Payment?

Minimum payments are like your credit history lifeline. That’s what you have to pay every month in order to keep a good credit rating with your creditor. If you have multiple credit-card debt, write the minimum payments beside each credit-card, add them up, and that’s the least you must put toward your debt every month.

4. How Badly Do You Want It?

You can take the slower journey or you can snowball the shit out of your credit-card debt. I took the snow ball version, and in 347 days I became credit-card debt free. Let’s say you own $2,500 @ 19%, and your goal is to eliminate your cred-card debt in one year.

You know that your minimum payment will be $64.58 (interest + 1% of balance). But you want to snowball your credit card debt, and get rid of it in a year, you’ll have to make payments of $240 per month for the next 12 months in order to become credit-card debt free in a year. In that time, you will pay $254.10 in interest.

If you chose to take the slow route (paying interest + 1% balance), and not drop large chunks of cash towards your credit card debt, it would take you 206 months to pay off your debt and you would pay $3,364.63 in interest alone.

Once you’ve paid off the credit card, you can use the $240 you were using towards your next most expensive debt. That’s called snowballing.

5. Where Is The Money Coming From?

If you want to be credit-card debt free, you must find the money to pay off the debt. The logical solution (and the route I took) is to bring in more money through a second job, negotiate a raise at work or sometimes simply finding a new job.

There are brave souls who take out cash loans  in order to repay debt with debt. Unfortunately I’m not brave enough or wise enough to do such a thing, but it may be your thing. You’ll do whatever it takes.

6. Automate Your Payments

Set up an auto pay for each debt you’re working to pay off, taking the guess work out of it, and making a firm commitment to the process. Initially you’ll pay the minimum required on all the debt. On your most expensive debt, you’ll auto pay the amount you came up with to have the debt gone by your goal.

Final Thoughts

Dealing with debt is never easy. I dragged my feet for many years before I decided to start doing something about it. Once I committed my self, and the process started, there was nothing that could hold me back. There were months where I shortchanged my grocery budget in order to throw more dollars towards my debt. Now, you don’t have to be an extreme like me or use my example, but hopefully this article will push you in the right direction.

I’m also not going to lie to you by pretending that this process is easy. Actually, its anything but easy. However, it was so worth it in the end. Becoming debt free is one of the greatest feelings in world, probably on a similar level to being in the hospital on the day you get your first newborn. Living debt free is on a whole other level – Finally you become in control of your money, and no longer is your money in control of you.

Good luck, and all the best on your journey to debt freedom.

Readers, can you share any debt elimination tactics that have worked for you?


Photo Credit – garrettc


  1. lol at the line about becoming debt free like having your first child. Paying off debt can be a big challenge though. One of the other things I do is to get the balance off of high interest loans or credit cards asap. Usually there is enough room on my line of credit to at least lower the interest rate. Or if your credit is good you can get a credit card with a 0% balance transfer promo. That way you can save on any interest charges for 6-15 months.
    Modest Money recently posted..Automating Social Media MarketingMy Profile

    • A lot of people play the balance transfer game. I think my cc sends me a balance transfer offer every 3 months. Its a good offer, as long as you’re disciplined for 6-12 months. The only problem is that its hard to predict what will happen in 3, 6 or 12 months.

  2. Pretty logical steps out there, taking out a cahsloan must spell desperation. To be avoided at all costs if possible by raising money through selling misc stuff one doesn’t use no more.
    Mich recently posted..The Best Oil ETF to Profit from Canada’s Oil BoomMy Profile

  3. Hey would you mind sharing which blog platform you’re using? I’m looking to start my own blog soon but I’m having a hard time deciding between BlogEngine/Wordpress/B2evolution and Drupal. The reason I ask is because your design seems different then most blogs and I’m looking for something completely unique. P.S Apologies for getting off-topic but I had to ask!

  4. Must feel pretty liberating doesn’t it? My last non mortgage debt was about 3 years ago when I decided to fully pay off my business school loans. It felt great!

    Now I just have to shoot down my rental property mortgage loans and then it will be all cash flow. Sooner or later I’ll be there!
    Financial Samurai recently posted..Please Believe In The Man I May BecomeMy Profile

  5. Crushing debt is not only possible, but it’s often times quicker than most people think it would be. The problem is that most of the time, they don’t want to cut back on anything to do it. If you set your mind to, remain focused and follow the methods you write about then it is absolutely possible.

    It’s the discipline that’ makes it difficult.

    Congrats on your freedom from debt, by the way!
    Joe Morgan recently posted..Free Giveaways and Taxes – What You Need to Know.My Profile

    • Thanks Joe for the kind words.
      It’s definitely a good feeling, and a huge burden off my shoulders.
      You raise a solid point when you said that most don’t want to give up anything. So true, I was one of them for a while.