Two Different Ways to Pay Off $25,000 in Credit Card Debt

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Image from Flickr by Wimena Kane

$25,000 in credit card debt is a very large number indeed. For an average household in America, an amount like this might seem very overwhelming. Credit card debt of this magnitude is part of what drives many people straight into bankruptcy. But what if I told you that it is very possible to pay off $25,000 in credit card debt in just a few short years. I found two people who have shared their stories within the last year of doing exactly that. Be forewarned, these stories come from very different backgrounds and situations. Nevertheless, they do share in common that they both paid off $25,000 in credit card debt in a relatively short period of time.

How Dana Paid Off $25,000 in Credit Card Debt in 2 Years

In her own words, as published on

I had always been responsible for running the household, so when I didn’t have the money for groceries, or for gas, I would just put it on my credit card. And then, occasionally, I would splurge on something and put that on the card as well. In three years, I racked up close to $63,000 in debt. It seems like a lot, but between paying for all the household utilities, food, phones and car payments—and taking care of three kids—it all adds up fast!

My husband found out about one of the credit cards (there were six), and he was very upset about the balance, obviously—he hadn’t known that I had accumulated so much debt…

Creditors had begun calling the house as well, and that’s when I finally realized I needed to gain control over our finances and turn things around…

So, I decided to get aggressive with our finances, trying to earn more while simultaneously paying off debt and learning to live with a whole lot less.

Taking Steps to Paying Down the Debt

From my work as a teacher, I bring home about $2,900 per month. I set up automatic payments: $1,500 goes to paying off the cards with the highest interest rates, and the remainder goes to utilities, groceries and gas…

Once I set my mind to paying down our debt, I tried to streamline every aspect of my life. I got rid of our second phone line and cut my gym membership—I just started walking more for exercise. I used to get manicures frequently, which I cut out altogether, and now I just get my hair cut once a year. We used to eat out as a family, which we no longer do, either.

I also started working more outside of my job as a teacher, which allows me to contribute more money to paying off my debts. I sell Mary Kay cosmetics, and I can make between $300 and $400 for a two-hour Mary Kay party. Not bad!

Additionally, I bake cakes for events and weddings… I sell little birthday cakes for about $25, and wedding cakes for $3 per slice. One time, I sold a wedding cake for $1,500! All of this extra money I put toward paying off my credit card debts more quickly.

By the end of this month, I’ll have a little over $36,000 (of the original $63,000) left to pay off.

I’m obviously really committed to paying off this debt, and working these part-time jobs does take a lot of time. But if something good happens, like I sell an expensive cake and can pay off an extra $200 on a credit card, I’ll treat myself a little. It’s always small, like ordering lunch for $6 or stopping by the Dairy Queen. Now that I’m not used to splurging all the time, even the littlest splurges seem much more special.

These were just snippets from Dana’s incredible story. To see more about her background and how she keeps her kids on board with her plan, please click through to the full story on

How Michelle Paid Off Over $25,000 in Credit Card Debt

In her own words, as published on

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.

The reasons why I like to use my credit cards:

  • 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… However, I don’t spend more money in order to get more rewards. This is a common trap that people fall into.
  • Cash Flow.  … cash flow is king. Yes, cash is good, but cash flow is great. 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… I also know to stay below the recommended 30% utilization rate.
  • 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 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.

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…

These were just snippets from Michelle’s post on her blog, Making Sense of Cents. To see more of her background and what she has learned from her professor in her banking class, click through to read the full story.

Readers: Which story was more motivational to you? Are you inspired by seeing how Dana is digging herself out of real major credit card debt? Or, are you more inspired to stay out of debt by seeing how Michelle does it?

I hope this post has been a helpful Pay Off Credit Card resource for you in your quest to eliminate that stupid credit card debt. Feel free to join in on the discussion in the comments section below or head on over to our Discussion Forum. The best way to stay up to date with recent posts on this blog is to have them delivered straight to your e-mail inbox (Subscribe Here) or Subscribe by RSS.


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