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I’ve paid off over $25,000 in credit card debt

Last Updated: September 11, 2017 BY Michelle Schroeder-Gardner - 61 Comments

Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.

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Find out how I've paid off $25,000 in credit card debt. The title is true, well kind of…

While, I’ve never had a balance on any of my credit cards, I still make charges on them and incur “debt” even though it’s paid off completely every month. So technically I have had that large amount in “credit card debt” in the past few years. I got my first credit card at 18, and I was purely using it to gain credit for a long time. It definitely helped my score, and I was able to learn how to control my spending at a young age.

Yes, I’ve paid that much in credit card debt. Probably over that amount. Just recently, after our December credit card bill came, the balance for all 3 of our cards was around $1,500. Yes that’s a lot for one month, but of course other months will be smaller.

Also, I’ve seen a couple of other bloggers do this (not recently, so I can’t remember who did it, so let me know if you remember!) and I thought it was interesting to see where others come in on the credit card debate. I’d love to link-up.

Some prefer to be mostly cash based, whereas I would be lucky if I was caught with $1.

Last night in my banking class, our professor had us raise our hands if we did NOT have credit cards. Only one person rose their hand. Do you have a credit card(s)? I’m not sure if I was more surprised that only one person didn’t have a credit card, or the fact that the majority of us did.

Then I started wondering about how much credit card debt some of these people might have. Started wondering if anyone was drowning in consumer debt and the list goes on and on. You could tell that some were ashamed to raise their hands, but others thought it was funny.

The reasons why I like to use my credit cards:

  1. Rewards.  Up until December of 2011, we always had a non-rewards Capital One card. I can’t believe how much we’ve been missing out! We got $600 altogether in cash back sign-up rewards, and enough points for around $100 in cash. Of course it won’t be this much all the time because our expenses aren’t that high, but so far it’s been nice.
    • However, I don’t spend more money in order to get more rewards. This is a common trap that people fall into.
  2. Cash Flow.  One thing that keeps getting reiterated in my classes is that cash flow is king. Yes, cash is good, but cash flow is great.  My professor last night said that he likes to use his credit cards to do this as well and then he is able to get a better 30 day rate on his actual cash (he used to be a big bank executive, and now he’s a bank consultant).
    • As an FYI, this does not mean that I don’t have enough cash to cover myself, I just like the extra 30 day cash flow. I’m not paying interest on any of this, so I’m not being negatively affected.
    • I like having the flexibility of extra cash in my account, mainly because of my obsessiveness in having a large buffer in our checking account. Our buffer is big, and I would like to maybe switch to a penny based budget, so that everything is accounted for.
    • I also know to stay below the recommended 30% utilization rate.
  3. Scared to carry cash.  I tend to be an obsessive checker. So I’m always checking to see if my keys are in my pocket or that I haven’t forgotten anything. I have 4 alarms in my bedroom because I’m scared of one not going off and it ruining my whole day. Obsessive? YES! But this is how I am with cash also. I don’t like losing money and I know I’d be obsessive with that as well.
    • I would like to get into a cash based system though. I feel like we could probably save a lot this way.
  4. I am able to control my spending.  I positively know that I will pay my credit off at the end of the month. Yes, I can admit, that at first when I had credit cards, it was a little intimidating, but I still have never carried a balance. I can control my spending and I am still fully aware with each purpose how much I have allocated to each section in my budget.
    • This is a common problem for most. They’re afraid that with credit card debt, that they won’t be able to control themselves.

However, while all of this is said, I hate that the BF uses his credit card for anything. I hate the random $2 fast food purchases because I’m terrified of going through the trouble of someone committing identify theft against us. Of course our credit card carries protection from this, and so does our debit card, but the hassle is still scary to go through.

While credit cards may work for me, they’re of course not for everyone. Some people like to use only cash so that they can hold themselves more accountable, some are afraid of not be able to stay under the recommended 30% utilization (for a good credit score), among other reasons.

 Why do/don’t you use credit cards?
 How many credit cards do you have?

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61 Comments
Filed Under: Budget, Debt, Extra Income, Life Tagged With: Budget, Credit Card, Debt, Life

About Michelle Schroeder-Gardner

Michelle is the founder of Making Sense of Cents, a blog about personal finance and traveling. She discusses how her business has evolved in her side income series. She paid off $40,000 in student loans by the age of 24 mainly due to her freelancing side hustles. Click here to learn more about starting a blog!

Comments

  1. Rafiki says

    February 29, 2012 at 5:31 am

    I don't have a credit card, it's much harder to get one where I live especially at a young age. The last time I tried they told me I have to be at least working for 2 years. Now that I am about to hit that mark, I am not sure if I still want one. They offer rewards but they also have a yearly fee. Plus I've been doing OK without them thus far. I may still apply for one if I think the fee is worth it.

    Reply
  2. Young Professional F says

    February 29, 2012 at 11:41 am

    I love my credit cards for the rewards. I get so happy every time I get cash back or gift cards! Since I can pay them off every month, I don't see the problem with using them for most purchases. 🙂

    Reply
  3. Janna Renee says

    February 29, 2012 at 5:31 pm

    I pay off my credit card every month too! Since I was 22- I accrued over 50,000 points in my Amex rewards, which means my "debt" would be well over that from 18 until now (26), but I have never had trouble paying them off, and I now have great credit!

    Reply
  4. Newlyweds on a Budge says

    March 1, 2012 at 2:57 pm

    we use credit cards a lot but i pay them off almost immediately (like that dy or the next day) because i hate seeing a balance on them but i looove the points!

    Reply
  5. Investing in Silver says

    April 2, 2012 at 2:42 am

    Although I do believe your article title to be a bit misleading (hey, you got me to click on it), I can't help but applaud your fiscal restraint. Indeed there is a lot you can get out of using credit cards and it won't cost you a penny more then using cash, so long as you pay them off at the end of every month. Back when I used credit cards, I always tried to pay them off like you, but sometimes I would forget about my bill and be hit with interest and late fees, which is why I eventually got rid of them completely.

    Reply
  6. steadycheddar says

    April 4, 2012 at 10:25 am

    Great tips on credit cards! I actually just recently stared a blog and this was one of my main posts! http://steadycheddar.wordpress.com/2012/03/23/pap… pics on your blog as well!!! Nice vacations!

    Reply
  7. SavvyFinancialLatina says

    June 12, 2012 at 7:48 am

    Just saw this! No credit card still for us. 🙁 I honestly don't even want to get one because I am afraid we will spend more money.

    Reply
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My name is Michelle and I'm the author/owner of Making Sense of Cents. Learning how to save money and make more money changed my life. It allowed me to pay off $40,000 in student loans, start my own business, and I now travel full-time.
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