The Mindset Shift That Got Me Out of Credit Card Debt for Good

This page contains compensated links. Read the disclosure for more info

woman with laptop carrying shopping bags

If credit card debt is causing you great stress, please read the story of how I got out of credit card debt and more importantly, broke my addiction to spending on the plastic.

How I accrued massive credit card debt

I used to think I’d be in credit card debt my entire life. I started young in my debt journey. I was 18 years old when my bank sent a pre-approved credit card in the post.

The limit was $2500 – a heck of a lot more than I had ever had in my life. At the time, I was working in a cardboard box factory and earning between $350-500 a week depending on overtime.

To a spendaholic 18-year-old with a new-found love for bars and nightclubs, it could only end badly. If you’ve ever been in credit card debt you know that it’s not really about the money.

Credit cards allow you to inflate your lifestyle to a level you can’t sustain. I took full advantage of my card and purchased lots of vodka & diet cokes and taxis home.

As you can imagine I quickly maxed it out. My parents offered to bail me out, by allowing me early access to the funds they had saved for me since I was born.

I paid that card off and tried to be better.

But I’d learned nothing. I’d spent money I couldn’t see and then eliminated my debt with money I didn’t have to work for. Not to mention being so wasteful with the money my parents had eked together while I grew up.

As my earnings increased and I moved to a new country, my bad habits crept back.

It got to the stage where I had maxed out credit cards to the value of about $10,000 and no idea how I spent the money.

Each weekend I’d go shopping and come home with a new handbag or a new pair of shoes. It never occurred to me to pay with my own cash.

I always got out the plastic, swiped and was on my merry way with my new purchase.

After a few years of running up balances on multiple credit cards and transferring between cards in order to access more cash, I finally came to my senses when I had to fill in a loan application to pay my tax bill.

It had never really occurred to me that banks wouldn’t look favourably upon credit card debt. I figured since I could manage the monthly payment, I was doing OK.

The truth is my credit card debt was stopping me from making important moves towards my financial future – my credit cards were managing me.

How I Tamed My Credit Card Debt for Good

I knew it was going to take something drastic to change my credit card habit.

I realise that for me (and a lot of people) using credit cards doesn’t feel like you are using real money. There’s only one thing that feels like real money: cash.

The feel of notes and coins in your hand really brings to life the amount you’re spending. There’s a very good reason many personal finance gurus advocate using cash.

So I had to find a way to translate in my mind that the cute little piece of plastic which let me buy cool things I couldn’t afford was actually a bunch of cash that I was literally burning each weekend.

The idea came to me when I was late in making my minimum monthly payment by internet banking and had to pay in cash at the branch.

First, I had to leave my office at lunchtime and head to the ATM at my bank to withdraw enough cash to make the payment.

I then crossed the street to the bank that issued my credit card, took my place in the line and waited. I stood in line, clutching my minimum payment in notes, waiting for the bank teller to call.

As I handed her the card and the cash, I had a strong realisation that I was giving this woman (technically, the bank she worked for) money. For nothing. The penny dropped.

After that time I vowed to always make my credit card payment in cash. Every week on payday I would deposit whatever I could afford.

Sometimes it was $20, $30, $150. 

It depended on my earnings from my job and side gigs. The amount wasn’t important.

It was the repetitive act of paying my debt in cash.

That constant reiteration finally started to make an impact, and within a few months I’d cut up my credit card.

I still had a balance to pay so I’d bring the paper statement with me each week to make my payment.

It took me a year, but I finally paid that card off and then applied the same principles to a personal loan I had.

I learned to cash budget (and got a cute wallet to manage my cash envelope style budget).

Within 4 years, I was completely free of all consumer debt, had learned to live frugally and cured my addiction to spending on plastic.

If you’re struggling with credit card debt, I urge you to hold that cash in your hand. Really feel it and think how lovely it is to physically hold the money you’ve earned. Then hand it over.

It stings, but you’ll feel it. Which is the main thing!

Note: It took a few years but I now use credit cards as a life tool.

I appreciate some people need to cut up the plastic permanently to get their life back on track, but I couldn’t forgo all the rewards that credit card users benefit from.

I needed to train myself to be a smart user of cards and I’ve finally got there. I’m constantly aware of my history, so I track each purchase, and then I’m not in for a shock when the statement arrives each month.

Like it? Pin it for later

The Mind Trick I Used to Cure My Credit Card Debt

Tips for getting out of credit card debt.

About Emma Healey

Emma is a recognised family finance and budgeting expert and founder of Mum's Money. Her advice has been featured in Stuff, NZHerald, Readers Digest, Yahoo Finance, Lifehacker, The Simple Dollar, MSN Money and more.