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No More Credit Card Debt: Now What?

This article was written by in Planning. 14 comments.

In about 6.5 months, I will be free of credit card debt for the first time since 1998. Much like Inigo Montoya and the “Revenge Business”, now that it’s over, I don’a know what to do with the rest of my life.

Readers of Consumerism Commentary have proven their wisdom many times over, so I’d like to take that into consideration. Please visit my YayBoo page on the subject and help me prioritize my next steps.

Or, you should be able to use the widget below:

(If you follow Consumerism Commentary through an RSS reader, you may have to visit this page directly to see the widget.)

Published or updated August 5, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Smithee formerly lived primarily on credit cards and the good will of his friends. He is a newbie to personal finance but quickly learning from his past mistakes. You can follow him on Twitter, where his user name is @SmitheeConsumer. View all articles by .

{ 14 comments… read them below or add one }

avatar Luke Landes

This is a cool widget. I placed my votes.

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avatar Slackerjo

This may seem over simplified, but when it comes to small projects around the house, I stretch these projects out over many weeks, using my disposable income (DI – literally an envelope filled with $20 bills) to cover the costs. For example when I had a condo, the downstairs bathroom needed some work. So this is how I fixed it up:

paycheque #1 DI = new mirrored medicine cabinets. I installed them myself.
Paycheque #2 = new exhaust fan (with some help from Santa’s gift card from Home Depot)
Paycheque #3, electrician to install said exhaust fan (I didn’t make very much $$$ back then so I had to break the chore up)
Paycheque #4, purchase new flooring.
Paycheque #5 & 6 installation of new flooring. I ripped up the old flooring, but paid a professional to put new flooring down)
Paycheque #7 toilet repair
Paycheque #8 paint!

I did not spend all my DI on the bathroom work, just $40, $60, $80 here and there. Back then, there was a terrible recession where I lived and I lost my job. I got another job, a very crappy job at half the salary I used to make, so my DI was $60 a week. All and all it was very simple fix up project. It took a couple of months but there was the satisfaction in the end that the whole thing was paid for in good old fashion CASH. Plus I did not have the stress of a gutted bathroom to deal with. So maybe using a bit of DI here and there for some of the smaller jobs, will free up $$$$ for the other things you have on your list.

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avatar Twiggers

Pretend you’re still paying them and start paying yourself now :) Open a new savings account and set a goal for something you’ve always wanted to do….or sock it into retirement funds :-)

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avatar KC

Assuming you already have $1k to $2k emergency fund then start on the car payment. Basically you want to pay everything off but your mortgage debt. So funnel all that credit card debt repayment to the car. When the car (and any other loans not including the mortgage) is paid for build up the emergency fund to a 3 month level. Then do the Roth. Once the Roth is maxed annually continue to save for other expenses that will eventually occur (like another car, replacing broken appliances, etc).

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avatar Luke Landes


One thing to remember is by asking a bunch of strangers, you’re going to get general advice — good advice, yes, but not something that takes into account who you are, what you do, and what’s important to you. So when it comes to spending your excess (kitchen upgrade vs. video equipment for example) it’s going to be hard to get a respose that makes the most sense for you.

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avatar CJ

If you don’t have the 3 month savings buffer and something drastic happens, You will just go right back into Credit Cards. I recommend that as your first step. After that, there are a lot of good options, but that would be my first priority.

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avatar Julie

Noticed you added the 529 option – I “boo”-ed this. :) Sure, saving for your kids’ college education is great, but it should be low on the list. The common advice I hear is: You can take out loans for school. You can’t take out loans for retirement.

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avatar Smithee

I boo-ed that one, too (someone else added it). We’re not planning on any kids.

In general, this is fascinating to watch.

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avatar Stan

Once you finish off your CC debt, I think that you should celebrate. Do something to reward yourself for accomplishing your goal to reinforce your own good habits but don’t celebrate for too long. I like the idea of a party. :) Get started immediately on your next long-term goal after that.

Good luck!

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avatar Kyle

I say fill your emergency fund first, no question. After that, I could go either way on the start Roth, max 401k, prepay mortgage boat.

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avatar Moneymonk

I have not have credit card debt for about 12 years now, I don’t miss it. Actually I don’t have a credit card only a debit card

I find myself just paying extra on my car afterward, then building an EF, from there give some to charity and have a little fun!!

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avatar KC

Yeah, kids can pay for college themselves. Choose a good public uniersity and get a job. Mom and dad can help out some, but they shouldn’t sacrifice their retirement for college. That’s how I got through school – hard work and some help from mom and dad. I got through debt free and they chipped in enough to help me be debt free, but not so much it messed up their retirement. I did this for 1 undergrad and 2 grad degrees. And they are having a nice retirement. My kids will have the same options.

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avatar Frugalchick

Definitely build your emergency fund first. I agree with CJ, a lot of things could go wrong and could land you back in the CC hole. Good luck!

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avatar Stephen

I agree with Stan in that it’s important to actually celebrate — in some small way — significant milestones, such as no longer having CC debt (congrats, by the way, a mere 6.5 months in advance). Don’t go overboard, but saving up for a bit and then having friends over for a party (or whatever) sounds like a good way to celebrate to me.

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