I Am Credit Card Debt Free (Again)

I Am Credit Card Debt Free (Again)


cut up your credit card
via flickr

In January 2012, in the middle of a severe depression, I wiped out my savings to move into a 1BR in Brooklyn. Living paycheck to paycheck while trying to furnish an apartment and pay for medical care left me relying on my credit card. From January to August, I had racked up $5,100.

Up until August, I used my credit card like an ostrich. I knew that I would have to pay it off eventually, but I didn’t want to think about it. Instead of looking at the balance each month, I just paid off the minimum and pretended everything was fine.

Assessing the Situation

Of course everything wasn’t fine but it took me months before I finally had the courage to take a step back and assess the damage I had done.

Unfortunately, I also had the ironic situation of using the credit card to pay for psychiatrist appointments. I was seeing the psychiatrist because I was depressed. The $350/hour appointments were putting me into credit card debt. Which was making me even more depressed.

That was a fun cycle.

Building an Emergency Fund

It’s easy to rack up debt when depressed because, truly, nothing matters. You’re living in a darkness where there is no hope and no future.

You are always in a state of sadness so seeing a maxed out credit card doesn’t evoke emotions the way it should.

In fact, depression (read: your brain trying to sabotage you) wants you to stay miserable and being hopelessly in debt is a good start.

My foundation of financial smarts prior to the depression helped to let some rationality slowly seep in. It was enough to remind me to put money, when I had it, in a savings account.

It took me eight months to get back on my feet after using my savings to get a new apartment and move. Moving is very expensive in new york and I impatiently made the decision to move without saving up enough of a cushion. A rational mind would have stuck it out for a few months to avoid running on fumes, but my irrational mind needed to get out of that old apartment as soon as possible and nothing was stopping me.

It took eight months to go from zero to something in my savings, allowing me to have a safety net between paychecks.

You don’t need $5K in the bank before you start paying off debt.

Anything is better than nothing when it comes to emergency funds.

Having an emergency fund means you will use that money as a cushion instead of the credit card. It may be tempting to put down a large payment on your credit card, but if you’re left without any savings then it’s very likely you’ll fall back to using the credit card again.

Hiding The Card

Once I had enough of a safety net in place, I hid my credit card in a metal tin and put it in the closet. I didn’t want to carry it on me. I didn’t want to even look at it. From then on, it didn’t exist.

The easiest way to get through paying off credit card debt is to not accrue more in the process

This is a huge step. It was also my way of severing one of the ties to my depression. Like a rope tying me down, this was the first thread to unravel.

Creating A Payment Plan

When I finally woke up and not only realized I needed to tackle this debt but finally had the motivation to do it, sitting down with a pen and paper was the easiest way to break everything down to seem less overwhelming. Writing down my balance, interest rate, and minimum payment made it real.

Another big help was Discover’s online debt-payment tool that helps determine the best payment to reduce debt.

Living Life

All in all, it took me 10 months to pay off $5K. Could I have done it quicker? Absolutely. Did I spend money on luxuries during that time? You bet.

But in the end, what did it hurt? I paid more in interest, which I was well aware of when making these spending decisions. Importantly, I didn’t go back into debt.

One of the guilty pleasures I spent money on while also in credit card debt was my tattoo. After tip, it cost $800 in cash. I didn’t put it on my credit card, I didn’t use all my savings, I just allocated money to a luxury instead of the credit card. And I still made my planned credit card payment that month.

I’ll be honest, as good as being debt free feels now, being able to function like a rational person feels better.

For those of you who haven’t suffered from depression, imagine living in the dark all the time – no matter where you are. Everyone else can see light but you can’t. Try eating in the dark. Showering in the dark. Working in the dark. You can do it, but nothing is enjoyable. You know what’s the best thing to do when it’s dark? Sleep. And that’s what you do a lot of.

Working through depression was my top priority. Thinking about reducing debt couldn’t come until after.

I admit to spending money on trips, dinners, and splurges like the tattoo in an attempt to force myself to lead a normal life again. No regrets.

Credit Card Debt Free, Finally

When I received my credit card statement this month, I had a huge smile on my face. It still doesn’t feel real to see $0.00 staring at me. The freedom I feel really is great.

In terms of debt, I still have a student loan but at 3% interest that is not nearly as stressful as the credit card. It’s also something I do not regret. Getting a degree has been a great investment in my life and every payment I make on that loan is worth it.

Another aspect of my specific credit card debt situation was having that debt reminded me of my depression. I can’t say I’m in the clear yet but I can function now, which is leaps and bounds above where I was two years ago.

Making each credit card payment felt like that part of my life was still around and I couldn’t escape it. It was a reminder that those feelings could come back any second (and there’s days they do).

To me, paying off this credit card symbolized my struggle with depression and my efforts to overcome it.

Again, I’m not always in tip-top shape but I have moved on from the days where I couldn’t shower or eat. Eradicating this debt really feels like another weight has been lifted and I can move on a little easier.

It’s important to pay off debts that are holding you back so you can move on to better places in life.


8 Replies to “I Am Credit Card Debt Free (Again)”

  1. E-funds seem to be a popular debate in the PF world, but I’m a fan of them, even for those in debt. It just seems like it helps in these situations when you need a bit of extra and don’t want to rack up more debt.

    I don’t think there is anything wrong with indulging a bit when paying off debt. Especially when you’re being practical and know how much you’ll pay in the extra interest. I probably would’ve saved an $800 tattoo for after, but that’s just me. I also don’t have the nerves to get one!

    Glad to hear you’re doing better and took the steps to get help.

    1. It was an odd situation because I actually scheduled the appointment a year in advance, at a time when I was financially & mentally healthy. Over the course of that year everything deteriorated but I had already put down a deposit and waited. I did consider cancelling (and eating the $150 deposit) but figured if I didn’t do it then, I never would. Certainly not one of my smartest decisions but nothing I regret doing.

    1. Thanks! I actually was thinking about your student loan post when I wrote this, I really can’t stop smiling when I think that I never have to make another cc payment again.

  2. I’m proud of you, lady, for writing this post and for having the courage to get help when you needed it. I don’t think it’s really possible to describe depression to someone who’s never felt that way, but the dark analogy was a good one. Yay for no CC debt! :-D

  3. Congrats. The key will be staying out of credit card debt. All too often people get rid of debt then turn around and get right back in. I can see that you know the virtues of staying away from that, and I wish you all the luck in the world in achieving that very important goal.

  4. A huge congrats to you! After meeting you earlier in the spring I can say that you deserve this so much! You are such a lovely person and I’m sorry you had such a rough time earlier in the year. Very proud to know someone living in one of, if not the most expensive places in the US (dare I say world – I’d have to fact check this). Anyway, super proud of you and so happy for you! Enjoy it!

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