5 steps I took to pay off $8,249 in credit card debt after college

How to Pay Off Credit Card Debt After College

I racked up a miserable amount of credit card debt in college.

Don't get me wrong – I'm thankful I had access to credit cards so I never had to say no to fun or friends during college due to my financial situation. And, I have many great irreplaceable memories show for it. But, when I saw how much of my paycheck after college was going into the black hole of interest payments, I realized it was time to get serious about down my debt.

After some planning, I was able to take 5 small steps to pay off my credit card debt 3.5x faster without compromising on my lifestyle.

Here was the situation: I had $8,249 of credit card debt with an interest rate of 25.49%. And, I was making monthly payments of $240. At that rate, it was going to take me over 5 years to pay off my credit card debt.


Step 1: Transferred balance to a lower-interest card

This may sound counterintuitive, but often the best first step to paying off credit card debt is to get another credit card. When trying to pay off credit card debt, interest is your biggest enemy. According to Money.com, Americans paid a staggering $113 billion dollars in credit card debt last year. Because many new credit cards offer 0% interest on balance transfers, they can be an excellent way instantly eliminate this interest cost. There is a catch though.

I had to incur a 2.5% balance transfer fee to set up the new credit card. However, as described below, I was able to offset this cost entirely in the first month of having my new credit card.


Step 2: Set a budget that is higher than your minimum payment.

My new credit card had an interest rate of 0% for the first 18 months. And so, I committed to paying off the balance in that timeframe. This meant I had to commit to a payment that was higher than what I was paying at the time.

First things first, I needed to know how much I would have to pay every month in order to pay off my debt in 18 months.

I created and used a credit card payment tool to understand how much I had to pay each month in order to pay the debt off in the time I planned.

In my case, I needed to find a way to pay down an additional $220 a month.


Step 3: Became more proactive when planning activities

Instead of going along with the plans of friends, I started being more proactive in planning activities. Small adjustments allowed me to continue having fun while not breaking the bank.

– Night at the bar = Night at the bar with happy hour specials
– Coffee at Starbucks with friends = coffee at my place with friends
– Dinner at an expensive restaurant with friends = dinner at a fun (but cheap) restaurant with friends
– Out of town trip with expensive hotel = Staycation day with full-day low-cost activities like hiking at a state park

A little proactive planning on my part not only helped me easily save an average of $4.00 per day, but my relationships with friends improved. I went from being someone who tagged along on plans and spent more money than I had, to being someone who was always planning fun activities for our friends and saving money at the same time. Added bonus – I was helping my friends save money as well. Savings of $4.00 per day = $120 of savings per month. Over halfway there!


Step 4: Opened a new savings account and sent my payment budget there directly.

Keeping funds separate was critical to helping me make set aside the money needed to make my payments. By creating a separate account and routing part of my paycheck directly to that account, I was able to “pay my savings first”.

In a typical month, I would use all of the money I had in my checking account. Once I routed some of my checks directly to the new account, the money I needed for savings never hit my checking account. It became much easier to set aside the amount I needed for my payments. Then naturally, I found myself opting even more for activities that were within my monthly budget based on how much was left in my checking account.

Added bonus: Many savings accounts come with signup bonuses that can climb as high as $500.

In my case, I was able to find a savings account that had a $150 new account sign up bonus. This signup bonus covered two-thirds of my balance transfer fee, so my net cost to go from a 25.49% interest rate to a 0.00% interest rate was $100. Between the money I made from creating a new savings account and the interest savings, I more than offset the cost of the balance transfer fee in the first month alone.

Additional savings = $100 per month.


Step 5: Stopped using credit cards to pay for things

The last thing I did was commit to no longer using credit cards to pay for things. This was the hardest step. I wanted to make sure I didn't fall into the trap of charging up my credit cards again.

To do this, I canceled all but one of my credit cards. And, I put the remaining one in a drawer. I kept it there, to be used only in the case of emergencies. Thankfully, I never needed to use it. However, I did find that I had to say no to a few things because I didn't have the money at the time.

The most important thing for me here was a shift in mindset. I stopped buying things that I felt I “deserved” and instead only bought things that I had already “earned”. For me, this has been a lasting mindset that has helped me to value the things I purchase.


You can do this!

Wrangling your credit can seem hopeless. But with a bit of planning, a few small adjustments, and a new mindset, you can get your debt under control and paid off in much less time.

With these small steps, I was able to save $6,700 in interest charges over 18 months, without compromising my lifestyle!

If you're looking for a first step to getting your credit card debt under control, check out this credit card planning tool we created. It will help you think through the small steps you can take to getting things back under control.

Credit card payment tool


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  1. I also find that keeping funds segregated in a separate account makes it easier to get out of debt. I think the psychology of “no longer your money” is what makes it work, in my mind,

  2. WOW Happy to see your return!

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