How I paid off $20,000 of credit card debt in one year


Becoming debt-free takes planning and hard work—but with the right mindset, a brighter financial future is possible. 

Trying to avoid FOMO in grad school led Michael to rack up over $20,000 in credit card debt—and that’s not counting what he owed on his student loans. He realized he needed to make a change. Here’s how Michael got intentional about his finances and paid off his credit card debt in just one year.

Growing up in a middle-class African American family in the Washington, D.C. area, the money lessons I was taught were to save and to avoid spending more than I had. Good advice, but not very detailed.

I tended to follow the crowd when it came to my finances. Through college and my first job, I made money decisions based on what people told me to do. I opened a Roth IRA because coworkers encouraged me to get one, but I didn’t really know what it meant.

I wasn’t mindful with my money. Lacking a clear set of financial values not only prevented me from spending and investing intentionally—it also led me to rack up thousands of dollars in consumer debt.

The slippery slope of credit card debt

In grad school, I got a credit card known for its travel perks: incredible introductory offers, airline miles, free TSA PreCheck, airport lounge access, you name it. A lot of my friends were getting it, and I didn’t want to miss out on group trips, concerts, or other fun things. I told myself that even though there was a high annual fee, I’d get my money’s worth through all the rewards. My first mistake was not reading the fine print. I didn’t understand how unpaid balances could result in interest that adds up.

Read more: 5 common credit score mistakes you can easily avoid

Along with the vacations, I used the card to buy things like shoes (I’m a big sneakerhead) and video games. I wasn’t making a lot of money at the time, so I’d say, “I don’t have the money now, but I can put it on the credit card and pay the minimum payments later.”

A rude awakening helped me kick that mindset to the curb: In June 2020, I was over $20,000 in credit card debt.

Forging a clear path to consumer debt freedom

Each time I looked at my account balance, I felt more frustrated and hopeless.

My discomfort wasn’t only about money: I felt a deep sense of shame. I didn’t want people thinking I was a failure because of my credit card debt. But then I started seeking out success stories, including LinkedIn posts from people who’d become debt-free or paid off their student loans. I knew if they could do it, so could I.

I called it my epiphany moment—my sudden understanding that I needed to cut out extra spending, pay down my debt, and actually understand how I was investing.

My journey to becoming consumer debt-free wasn’t easy. But once I did pay off my credit card debt, I felt empowered and confident in my financial standing.

Read more: 3 steps to help you ease debt stress

Building up my financial confidence

I had to make some strategic money moves to accomplish my goals. These are some of the steps I took:

  • I developed a debt payoff plan. I used the snowball method, where you pay off your smallest debt balances first while making minimum payments on the larger ones. This way, I was able to see small wins along the way, and I built up momentum.
  • I cut my spending. No more trips or impulse buys for me. Any extra money I made went toward paying down debt and investing in my Roth IRA.
  • I saved money on rent. During the COVID-19 pandemic, I was fortunate to be able to move back home and live with my family. I know that’s not the case for everyone, but it was a blessing for me, and I don’t take it for granted. The money I saved on rent helped me make more than the minimum payments on my card.
  • I learned about personal finance. Online courses, YouTube videos, and books taught me the practical ways to pay off my credit card. They also gave me the motivation to keep up my good financial habits long after I’d reached that goal.
  • I kept other money goals in mind. At first, I was only focused on getting my credit card balance to zero. As I got closer to that goal, I realized I could put a little more money toward other goals, like investing, buying a car, or putting a down payment on a house. It’s definitely possible to save while paying down debt.
  • I invested intentionally. My Roth IRA was already set up, but it wasn’t until I had my epiphany that I understood how to use it. It’s not enough to put money in the account. I became laser-focused on picking stocks and learning about the many different investing options.

Read more: Credit card payoff calculator

4 lessons from my journey

Personal finance has become my passion. I started a podcast called “Epiphany: Honest Conversations About Personal Finance.” I interview people—mainly people of color—about their personal finance journeys and what they’ve learned along the way.

I’ve learned quite a bit from these conversations and from my own experience, including a few important lessons:

  1. Don’t forget the basics. Sticking to a budget and taking advantage of your employer’s retirement account matches are two ways to stay in control of your money.
  2. Talk with your support network to help you find new resources while erasing some of the stigma around debt.
  3. It’s OK to enjoy life while paying down debt. Doing fun things once in a while can help make your debt journey more sustainable. Life isn’t all or nothing, and you don’t always have to dedicate a whole paycheck to your debt payments.
  4. Personal finance is a personal journey. What works for someone else might not work for you. I think there’s power in making choices that work best for your particular situation.

It took me 12 months of mindful spending and saving to pay off my credit card debt. Now, when I use my card for points, I pay the full balance every month. I’m still working on my goals like investing and saving for my first house, but I’m being a lot more intentional about where my money goes.

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