How I got out of $10,000 of credit card debt before turning 30

Caroline Moss
The author in 2009 on a university trip to Italy
Caroline Moss

The fall I turned 18, I celebrated my birthday with my new college friends, and then signed up for my first credit card outside of the dining commons with a representative from Capital One. I think I even got a free T-shirt for applying.

This move — bank reps with clipboards standing next to hungover college kids and their all-you-can-eat french toast sticks — was pretty standard in 2005. The recession was still a few years away, and reps were eager to capture the youngest demographic of spenders.

Four years later, I graduated with $5,000 in credit card debt, all of which was spent on stuff I did not need. Though I never missed a payment, I only paid the $25 minimum payment on each of my cards, and I also spent nearly eight times that much every month.

Since I was so young, my interest rate was through the roof, around 25%. Too bad I didn't really know what interest rates were at the time.

I was broke and living in New York City! What, was I just not supposed to have fun?

I didn't dare tell my parents that I had messed up by digging myself into a hole of Target shopping spree debt, so I went along with my plan and moved to NYC three months after coming home from college.

My first job sent me home with about $2,000 in take home pay every month, and my rent was more than half of that. Using the credit card to keep spending was easy. I was broke and living in New York City! What, was I just not supposed to have fun?

Actually, yes! But it took me a few years to figure that out.

The most important things to do with your money before 30
The most important things to do with your money before 30

For a while, I continued to use my credit cards. I increased my monthly payments but I still was barely covering the interest.

I was in denial. I didn't know anyone my own age who was "good" with money. I figured I would wake up in a few years as a completely well-adjusted, responsible, rich adult.

When I hit $10,000 in debt at 24, I started to feel the anxiety of my poor financial choices. It was like the light bulb finally turned on. I realized that, though I had been working full-time for two years, my salary hadn't increased dramatically, and I was trying to keep up with the facade of a NYC lifestyle I was actually way too broke for.

Everything had to change. Starting with me.

Here's what I did to turn my situation around.

1. I took out a loan

Keeping track of three cards with three high interest rates was way too stressful. A friend suggested I take out a loan with a credit union with a lower APR, pay off the credit cards, and make one big monthly payment towards the loan. I did just that, and I cut up the credit cards.

2. I set up auto-pay

Auto-pay became my best friend. I set it up so that on the 18th of every month, $300 moved from my checking account to my loan (already three times the minimum payment). I never missed a payment, which helped keep my credit score high.

3. I went cold-turkey on credit cards

I had to rid myself of the temptation to just pay for something with a credit card and deal with the bill later. So I stopped using credit cards entirely. Left with my checking account, which never had more than $600-$700 in it after I paid my rent and expenses, I was limited in what I could spend.

When I hit $10,000 in debt at 24, I started to feel the anxiety of my poor financial choices.

4. I "matched" all of my frivolous expenses

This was a tip that came from a friend and it was, to this day, some of the smartest advice I've ever received. It's very difficult to live your life and have no financial margin for fun, so my friend told me that every time I spent money on a "want," like a manicure, a latte, or a cab, I had to also contribute that exact amount of money towards my loan.

If I wanted to order $30 of Chinesefood for dinner instead of eating the food I already had in thefridge or pantry, I had to budget another $30 to put towards mydebt. If I didn't have $30 to give back to the loan, then Idefinitely didn't have $30 for Chinese takeout.

"Matching" both helped me curbsome of my spending habits, and it also helped get my debtdown.

5. I made multiple payments each month

I forced myself to make multiple payments a month. If I had my monthly expenses under control, I would often log into my bank account and, with one quick click, throw another $50 or so towards the debt. No thinking! Just do it! Then it was over.

6. I minimized lifestyle changes

Even as my salary increased, I didn't allow myself the lifestyle changes I was excited for. If I had been smarter with my money when I was younger, I might have been able to enjoy promotions, raises, and bonuses way more. But instead of moving into my ownapartment when I got a sizable promotion and raise at 26, Icalculated the difference from my pre-raise and post-raise paycheckand put every last cent towards thedebt.

It was not fun. But it was necessary.

7. I never normalized the debt

I never let myself think carrying debt was "fine." Because my credit score was great, it would have been easy to let myself off the hook, continue to go back to making $300 monthly payments, and start having fun with the real money I was starting to make. But I refused. I wanted to be debt-free.

My goal was to get out of debt before turning 30. I made my final payment three months before my 29th birthday. Now I have even started using a credit card again. But I have one rule: Pay it off in full every single month. No excuses.