In May 2018, I quit my job as a youth leadership program director without having secured another. It was an abrupt decision to leave a role I had been doing for three years with nothing else lined up, but it was necessary for my mental health. The question for me wasn't so much of if I would find another job, but when I would find one with comparable pay and benefits.
When I quit, we didn't have much of a financial safety net. My husband was in graduate school and we had a 6-month-old baby — we were already struggling to make ends meet. We weren't behind on any bills, but also not truly moving ahead in tackling the nearly $25,000 we owed in credit card debt.
Before I left my job, I was able to make the minimum payments to keep my cards active, but I hadn't made any progress toward completely paying off the balances on my five credit cards. Midway through the summer, I still hadn't secured a full-time role, and I saw my credit score dip below 600 as a result of a few missed credit card and student loan payments.
It was stressful to watch my score fall by nearly 75 points, but I also knew that there wasn't much I could do to fix it while I didn't have a steady income. Once I was able to find another job, earn more money and get consistent with on-time payments, I knew my score would rise in due time.
As fate would have it, both my husband and I found full-time work by the end of the summer. Now that we were once again a two-income family, we sat down together to make some plans. We set a financial goal to simply bring all our accounts current and decided to set up a spreadsheet in Google Sheets to help us review bills and expenses each month.
I found that organization is critical when you're struggling to make ends meet. Creating a debt repayment plan was our first step, and tracking our expenses made our goals more achievable. But you also have to be ready to adjust your goals depending on what life throws at you.
Conversations about money and debt are rarely comfortable, but my husband and I both knew we had to approach our finances in a more strategic way. We had to get honest about how much we were paying in interest on credit cards and understand how to make progress in decreasing our debt.
While we were able to bring all our accounts current in the months after we both got full-time jobs, it wasn't until the spring of 2020 that we found opportunities to set our debt reduction plan in motion.
As a couple, we strategically opened new credit cards with Discover and Citi in February 2020 in order to consolidate our debt. We took advantage of low transfer fees to transfer balances, which gave us 0% interest for 12 months. When I got my first credit cards in my 20s, I didn't understand how balance transfer cards worked, and in hindsight, it's one of the things I wish I understood better when I was establishing credit history.
Citi Double Cash® Card
Rewards
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, for a limited time, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/24
Welcome bonus
Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
Annual fee
$0
Intro APR
0% for the first 18 months on balance transfers; N/A for purchases
Regular APR
19.24% - 29.24% variable
Balance transfer fee
For balance transfers completed within 4 months of account opening, an intro balance transfer fee of 3% of each transfer ($5 minimum) applies; after that, a balance transfer fee of 5% of each transfer ($5 minimum) applies
Foreign transaction fee
3%
Credit needed
Fair/Good/Excellent
See rates and fees, terms apply.
Read our Citi Double Cash® Card review.
Pros
- 2% cash back on all eligible purchases
- Simple cash-back program that doesn't require activation or spending caps
- One of the longest intro periods for balance transfers at 18 months
Cons
- 3% fee charged on purchases made outside the U.S.
- Estimated rewards earned after 1 year: $443
- Estimated rewards earned after 5 years: $2,213
When the pandemic hit, we were lucky to keep our full-time jobs and also found that our expenses were lower. Suddenly, we had additional funds available to put toward our credit card debt. The biggest savings each month was from child care at $600 per month. Our tax refund hit at the end of March 2020, in addition to our first stimulus payment of $2,900. And the pause on federal student loan payments allowed us to save an additional $1,100 in just three months. We made a decision that spring that any extra money coming in would be redirected toward our credit card debt.
We made a plan to pay off the debt strategically, starting with the credit card that had the shortest 0% APR intro offer. We calculated how much we needed to pay each month to pay off the card before the interest rates went up. After we paid off that balance in full, we marked it as paid in our spreadsheet and moved on to the next card.
We had to start paying child care again in July 2020, but to offset that expense I took on contract work on top of my full-time job so we could keep up the debt-payoff momentum. Every month, we were putting nearly $1,500 toward our balances.
At the beginning of March 2020, our total credit card debt was at nearly $20,000. Just 14 months later, the amount shrunk to $3,500. We expect to be credit card debt free by the end of 2021.
The increases to my credit score have been slow but sure, yet I like to remind myself where I started just three years ago. Today, my score is 740, a number that will be helpful as we tackle our next goal: homeownership.
