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My Journey Overcoming Credit Card Debt [Advice that Works]

One readers shares his credit card debt story and great tips on how you can ditch your debt for life

For better or worse, events in our life shape our future selves. For me, a defining moment happened back in 2001. That spring, I graduated college. I was moving back to my hometown to start looking for a career in the finance world.

With high hopes and stars in my eyes, I was anticipating a flood of job offers and a starting salary close to six-figures. But that didn’t happen. Not the flood of job offers and not the six-figure salary.

The US economy was heading into a recession and few companies were hiring. One month of job searching turned into two. Then three. Then four. I started to become depressed, but I didn’t fully realize it at the time.

What I did know was that I enjoyed buying things. It lifted my mood and made me forget about the fact that I couldn’t find a job. There was only one problem with this: I didn’t have the money to pay for all of the stuff I was buying.

Getting Myself Into Credit Card Debt

As the months passed, my credit card purchases continued. Looking back, the “high” of buying things started to wear off faster and faster. This meant I was buying things more often.

I could rationalize any purchase I made too, which just shows you how out of control I was.

I was showing other classic signs of bad credit card debt too. I was avoiding getting the mail. When my credit card bill would come, I wouldn’t open it for a few days. I would build a number in my head as to the balance and then feel better when the real balance was less. Of course, I estimated high just so I would feel better.

Eventually, I came to a breaking point. Or so I thought. I knew I had to get my debt under control. I knew that finance charges were a bad thing, so I found a credit card with a 0% interest rate on balance transfers for one year. I somehow was approved.

My goal was to open this new card, transfer my balance and work on paying off the balance over the course of the year. My plan failed miserably.

What ended up happening was that I kept spending. I put my new spending on my old card that now had a zero balance.

Before I knew it, I had two credit cards with balances. They totaled around $7,000.

By this point, I was shoulder deep in the credit card debt cycle. I found another credit card with a 0% interest rate on balance transfers and again was approved. I transferred my balance from my original card onto this new card. My goal was the same as before, pay off this debt while in the promotional 0% interest rate period.

If you have been in the credit card debt cycle, you know where this is going. That’s right, I started spending on my original card again.

Fed Up And Changing Things Once And For All

Within a short period of time, my total debt now stood at $10,000. I wasn’t even thinking about trying to save money on interest charges at this point. I was just spending to get my “high”.

Then one day it hit me. My ah-ha moment. I was in a clothing store looking at a jacket. I was about to buy it when that little voice in my head spoke.

It told me I already had a couple jackets. Some I have never even worn. Why do I need this one? I’m not sure why, but I put the jacket back and headed home. On the drive, I did a lot of thinking. And crying.

I finally admitted to myself that I was depressed. The fact that I went to college and couldn’t find a job was destroying my self-worth. I knew that buying things wasn’t the solution. I had to accept the fact that jobs are tough to come by and I just needed to find something. I also needed to stop my spending as it wasn’t helping the issue, just making things worse.

Taking Control Of My Financial Future

I continued to look for work but was still failing short. So I took another approach. I took a part time job at an electronics store. It made me feel good to have a job. This is ironic since I was making $7.00 an hour and was expecting $100,000 a year just a few short months ago. But I was happy.

While I worked part time, I continued to work on myself as well as find a more permanent job. I curbed my spending and slowly started to pay off all my debt.

Eventually, I landed a full time job. It was temporary during tax season, but it was with a well known mutual fund company. I knew their name on my resume would help me land something permanent down the road.

I worked at this job during the day and kept my part time job at the electronics store, working nights and weekends. During the holidays, it was rough. I would work from 8am-5pm at my main job, then 7pm until midnight or 1am at the electronics store.

Even though it was rough, it was worth it. I kept living on as little as possible and put rest towards my credit card debt.

After 5 months, I made a nice dent in my credit card debt. The temporary job ended but I was able to find a permanent full time job a month later. Again, I was making nowhere near $100,000 a year. I was making a little more than 1/4th of that amount. But I was thrilled.

Lessons Learned from My Debt Experience

In the end, I learned a lot about myself and life in general. While I still aim for the stars in all that I do, I am much more realistic these days. I was crazy thinking I was going to be making $100,000 right out of undergraduate school.

I was also crazy thinking that stopping my spending cold turkey was going to work. It wasn’t until I got real with myself that I learned how to break the cycle. Even then, there were times I wanted to spend. I had to slow down and think through things to keep me on track.

The goal of writing this was for others to learn from my experience. Mainly that you are never going to get out of debt until you really get to the root of the problem. When I was transferring balances, I was thinking my spending was out of control. But that wasn’t the root issue. The root issue was that I was depressed.

It wasn’t fun admitting that. It wasn’t easy to overcome it either. I ended up seeing a therapist for a few years to help. But it was what needed to happen. If that didn’t happen, I would not be writing this post. I would be talking about how I am still spending out of control and transferring balances.

I urge you to take the time to get real with yourself and root cause of your financial problems. Many times, the real problem isn’t what we think it is. It is something much deeper.

If you are willing to dig down and deal with the issue head on, you will be rewarded for the hard work.

Jon Dulin was a financial services professional for over 10 years. In addition to working at world class mutual fund companies, he also managed over $500 million in client assets at a wealth planning firm. He currently blogs at MoneySmartGuides and PennyThots.

Joseph Hogue, CFAAbout Joseph Hogue

An investment analyst by profession, I run two blogs (Crowd101 and PeerFinance101) in personal finance, peer lending and crowdfunding. I've been on both sides of the table as a lender and a borrower and am excited to be a part of the peer movement. With the power of the internet, people are helping other people manage debt and raise money in ways never before possible.

A veteran and Iowa-native, I now live in Colombia with my wife and son. Like so many people, I was once trapped into the money myth and what it means to be successful. After taking control of my finances and learning how to make money in a job I love, I found a level of financial freedom that just has to be shared.

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