I just paid off my last credit card.

[IrishEyes]

I'm now completely out of debt. All student loans, medical debt or credit card debt is paid off. It has taken me awhile to accomplish this but it is a great feeling.

[TexasTowelie]

1. The worst part about doing that is that your credit score will probably fall (how ironic).

If you can tolerate that, then congratulations!

[multigraincracker]

2. Not so sure about that. I had always heard that too, but

mine is well over 800 and I've had no debt for over 30 years. Pay off my cards, both of them every month. Last car payment was in 1982 and my last two houses I've paid cash. I'm not rich, just decided a long time ago, never again. Had to dig myself out of credit card debt once and it was no fun. Did I tell you I'm also very cheap. New cloths are from yard sales. I've bought a lot of cars over the last 5 years to resell. Hate to eat out. I can make an egg muffin for less than a quarter. Drink tons of water, have at least one soda a month. Cheap living is my hobby.
Kind of like cheating in one way. I've never had kids.

[ret5hd]

20. Are you absolutely sure that...

you and I aren’t the same person???

[Vinca]

23. We paid off everything - mortgages, credit cards, the works - a few months ago and believe

it or not the credit score went from 865 to 830. I was stunned. Penalized for paying the bills.

[we can do it]

4. Not true.

[Shermann]

9. It can fall a bit due to a "lean file"

I fell from the low 800's to the high 700's due to this effect. I've heard that the credit agencies have reformed the system a bit to counter this effect, but I don't have supporting evidence.

There is a certain score you need to hit to get the best possible borrowing rates, and I believe it is in the low 700's.

In any event, you want to have this problem and congrats to the OP!

[cinematicdiversions]

11. Mine zoomed up after paying off all my debts

I still have the open lines of credit which I use for recurring bills and shopping. I simply pay them off every month.

[TexasBushwhacker]

22. That's what I do

I had to get very frugal when I was disabled. Since I've been working full time again for 2 years I paid off the one credit card I had, given my 14 year old car to my niece and bought an off lease, Certified Pre-Owned car for $12K less than it would have sold new (if I could find one - it's a hybrid). Since I had only one card and hadn't had a car payment in 10 years, my credit was down around 630 to 650 two years ago.

Since then, I financed my car and added 2 new cards. They all get paid off every month. My credit has gone up to 736!

[moonscape]

29. Using a small fraction of one's debt capability

is one key to a high score. I have high credit limits but don’t use much of it. Pay off credit cards every month. Still, those months I might have high bills because of unusual purchases, even though I pay them off and have tens of thousands of credit remaining, my score ticks down a point or two/three.

[IrishEyes]

27. Thank you. My FICO score is really high so I won't worry too much about it.

It has been fun watching my score increase each month while I was paying off my debt. It went from average to excellent.

[Grokenstein]

3. Congrats!

Any advice you might have to offer would be (cough) most welcome.

[Sherman A1]

6. Did so years ago after digging out post divorce

I was lucky to have a job at the time that went to a six day work week for several years so I had overtime each week.

My method was to pick the lowest balance and work to eliminate that one. Once dome shift to the next one and some day the balances start dropping. Do what you need to in gaming the system with zero balance transfers if necessary and alike, just get rid of the credit card debt as soon as you can. The interest charges are beyond absurd and you can never win when carrying a balance on them.

[3Hotdogs]

10. Also, congrats. Advice? Two books and some thoughts.

Last edited Sun Jul 18, 2021, 07:53 AM - Edit history (2)

Dave Ramsey's "The Total Money Makeover." Ramsey's religious and anti-socialism views may/will turn off some people. If you can ignore that, its good, sound microeconomic advice.

Dominguez/Robbin "Your Money Or Your Life." Both available on Amazon.

Both are good and will lead you to being debt free IF FOLLOWED. The temptation is to do it half-assed. Half-assed is better than not doing it at all but may take years longer to get there. Therefore, half-assed will cost you thousands of dollars more in interest.

Ramsey: "If you have to borrow for it, you can't afford it." Regarding putting off vacations, new cars, eating out in order to pay off debt. Or regarding spending to match what your friends are spending money on... "Live like nobody else, so you can live like nobody else."


Take your present credit card debt and divide that by 4. That is what you are spending on on interest per year. What could you have done with that money instead?

Credit card rewards --- big trap. Put $100 on the card and you get points or as much as 4% back as a reward. Then it gets added to the debt and the interest is 19% for the first year, followed by, say, 23% the years you don't pay it back.


Balance transfers at 0% for the first 18 months. Not unreasonable. But the temptation is to then going back and adding new charges to the old card or the new card. If you feel you must take advantage of the balance transfer offers, cut up both the old and new cards when you get the new card.

NOTE: These are available on Amazon, used for a couple of dollars. OR listen to the Ramsey podcasts for free. Podcasts may be a better use of your time and the couple of bucks.

[Lars39]

16. Mary Hunt's Debt Proof Living

She’s not a right wing shill like Ramsey. Back in the day, she was offering different calculators (debt, paycheck) for free, while Ramsey was touting himself. Still does afaik. She worked herself out of debt without going bankrupt, unlike Ramsey, who went bankrupt at least twice iirc.

[lastlib]

19. Always pay down the debt that is costing you the most in $$.

[IrishEyes]

43. Thank you. I read a lot of books about personal finance.

I checked them out of the library since I wasn't spending any money. I watched a lot of youtube videos about saving money and budgeting. I also bookmarked some helpful personal finance websites.

The first thing I did was decide to finally take charge of my finances. I gathered all of my bills and made a spreadsheet with the amount owed, APRs and minimum balances. It was a sobering experience but I decided that I was going to pay it off. I cut expense, did extra part time work and focused on my goal. I also took two dollars worth of coins out of my wallet and put it in my piggy bank. Each week I would save a little even if it was a dollar so I would have something saved for an emergency.

[Sherman A1]

5. Congratulations

Well done 👍

[IrishEyes]

42. Thank you. It feels great.

[keithbvadu2]

7. My ex-wife did not understand why I insisted that we pay off the credit cards every month when most

My ex-wife did not understand why I insisted that we pay off the credit cards every month when most of our friends had a permanent balance due.

After the divorce, she ran up the cards and realized how much interest she was paying and not running down the balance very quickly.

She took out a bank loan and paid them mostly off.
She still had the same amount of debt to start but the lower interest rate allowed her to pay off the balance much quicker.

When she bought her trailer and land, the bank asked her for her cc balance.
She said it was about 600 or 800 dollars.
Said his jaw just about hit the floor.
He was used to hearing 3000, 5000, 8000 or more.

Now she understands.

[IrishEyes]

41. I'm glad she understands now.

There are a lot of people who never learn about personal finance.

[riversedge]

8. good for you. I still have student loans.

[IrishEyes]

40. Thank you. Fortunately, student loans were not as bad as they could be.

[Freddie]

12. I only have my mortgage left

Which I pay extra principal on every month. No credit cards, loans or car loans. If I use a credit card to get the discount (Kohl’s, Lowe’s, Target) I pay it off in full ASAP.
In 2005 DH and I had to file for bankruptcy when he had a small business that went under. (He’s now working as a manager for the company he couldn’t compete with). My credit rating is now 820+. It can be done!

[IrishEyes]

39. Thank you. It is great to come back from a troubled time.

[patricia92243]

13. Wonderful!!!!

[IrishEyes]

38. Thank you. I'm glad I did it.

[malaise]

14. Congrats

[IrishEyes]

37. Thank you.

[localroger]

15. Joining the Congrats chorus

It sure feels good, don't it? I've had to do this twice after separate catastrophic events forced me to live on the cards to the tune of a mid 5-figures debt. Paid it off both times without ever missing a payment though, and the last time was in the late 1990's. I'm not even sure what my credit score is because it's been two decades since I needed to borrow anything, except for the card I use for convenience transactions that I pay off every month. I also own my house outright since about 2003, so no rent. I do have to fix the roof and air conditioner and pay property tax though, which I gladly do. When I watch people who make quite a bit more money than me trying to make ends meet I remember the lean times and I feel bad for them. It doesn't have to be that way. But I also don't own a fancy car, my house is modest, and I never had kids.

[IrishEyes]

36. Thank you. It felt like I would never get here a few years ago.

I worked weekends, cut expenses and made sacrifices. I don't regret doing it.

[SWBTATTReg]

17. Congrats! It's a good feeling, isn't it? One point that I've always reminded myself, is that ...

when you don't have any debt, remind yourself of this fact, that in truth, your debt that remains is the debt that you pay yourself every month, that is, when you had a house payment of $1600 to the bank every month, and you've paid it off, in short, you are now paying yourself $1600 a month. A nice feeling to become the 'bank' eh? Start stockpiling the money aside and you'll never have to borrow money again (sometimes still borrow but very shot term, so you'll always have a credit line just in case).

You're paying yourself. A nice feeling and a nice way to look at this.

Again, congratulations! It took me years and years to finally get to this point, of having everything paid off, and believe me, it was a feeling of such awesomeness to finally get to this point. The student debt especially, I've have some friends whose student debt is unreal ($40K), and I don't know how in the world they'll ever pay it off.

[IrishEyes]

30. Thank you. I'm putting the extra money towards saving for a small house.

[Fla Dem]

18. Congratulations!!! Freedom!!!

[IrishEyes]

35. Thank you. It is a great feeling.

It took awhile to get here but I'm never going back.

[PoindexterOglethorpe]

21. Good for you.

I was able to zero out my one credit card about four years ago, and now can pay it off each month. I've never had a car loan, always paid cash for my cars.

I do have a mortgage that I'm putting extra money on each month, so it will be paid off several years earlier. Perhaps I should look into actual re-financing, but I'm a bit wary of that, for fear I'll get into something I don't fully understand.

I also pay cash for all of my day-to-day expenses, except gas for the car. Here's what I do: at the beginning of each week I go to the bank and take out a specific sum of cash. Then it gets divided into six envelopes: cat, entertainment, health & well being, clothes, Christmas, and miscellaneous. The rest stays in my wallet and is used mainly for grocery or small restaurant amounts. I used to have an envelope for gas, and decided that it was really easier to use the credit card at the pump rather than have to go inside to give cash.

If there's not money in a specific envelope I do without or take from the miscellaneous one.

I have found this to be a very easy system. I do not understand people who never have any cash on them and pay mostly with a debit card. There really are times when cash is vastly better, as when you only want a small item, say a candy bar, and the place has a minimum amount to use the card. So you wind up needlessly spending more money. Personally, I think that's pretty dumb.

And no, my system does not require carrying around vast amounts of cash and does not make me a particular target for muggers.

[DFW]

24. That is sort of how we are

We hate debt, and hate having twenty different government agencies aware of every cent we spend by leaving a plastic trail. Some EU countries, notably Sweden, have gone to all plastic life (or nearly so). Germany, Belgium, Spain, Austria and France tend to go the other way, as does non-EU Switzerland. I don't even know if I HAVE a credit score somewhere, or who I'd have to ask to find out.

[IrishEyes]

28. Thank you. The envelope system is a good one.

I don't have a car so that saves on lots of expenses. I use public transportation. I will probably buy a car when I move to a new city.

[PoindexterOglethorpe]

44. The envelope system is quite amazing.

Many years ago, when I didn't own a car and took the public bus to and from work, and was travelling a great deal (I was an airline employee and so essentially had free travel anywhere) fellow employees would look at me and ask, "How can you afford to travel so much?" Keep in mind, our pay scales were public knowledge, so we essentially all knew what each other made. I'd say, "I don't own a car.". Most of the time they'd look at me as if I were speaking Martian. But the truth of the matter was that without the expenses of a car, I had a lot more disposable income.

[yellowdogintexas]

25. we are almost to that point ourselves

I started taking my required percentage from my 401K plans plus we had the Stimulus money and that was a huge boost !!! House and cars already fully paid for.

I reached one important milestone: I managed to score a balance transfer and moved all my remaining balances to one account. makes things so much easier and no interest for 15 months.

[IrishEyes]

34. Good for you.

It is important to celebrate your victories along the way both large and small.

[Upthevibe]

26. IrishEyes.....

Awesome! The only debt I have is my student loan but I only have to pay $20 per month...It's a great feeling because it provides a special sense of freedom.

[IrishEyes]

33. It is great to have this freedom.

[Iggo]

31. Great feeling, but weird right?

[IrishEyes]

32. Very weird. I'm not used to it.

I'm so used to getting paid and then thinking immediately about how much I can put toward my debt after paying my bills. I'm saving towards buying a small house in a few years.