My Citibank card, after I took a hole punch to it.
Yes, you heard me. We received our economic stimulus rebate on Friday and promptly paid off the evil Citibank card. Our balance is zero. Now we just have to cancel the card, which I hope to accomplish today. Since my husband is the primary card holder, he needs to cancel, and it seems like he hasn’t been home to do it for the last couple of days. The important thing is, we’re out of credit card debt forever!
Over the last year, our tenacity has paid off. It’s hard to believe, but it was this week last year that my husband lost his job the first time. We had no idea what the future would hold. We had no idea what we’d do for income. We had no idea what we’d do for health insurance.
What we did know is that we were sick of being in debt, and no roadblock, not even a job loss, was going to stand in the way of getting out of debt. We made a commitment to take on no new debt, and we stuck by it.
We cut costs by canceling things like our Blockbuster and YMCA memberships. We trimmed bills by line drying our clothing, baking from scratch, making our own cleaning products, and planning trips into town to save gas.
We increased our income by taking on odd jobs and blogging. We insured we wouldn’t use our credit cards anymore by first freezing them, and then getting brave and shredding them.
We continued to make steady payments to Citibank, even though our payments weren’t as high as we had initially planned.
Our goal was to pay of the VISA by September of this year, and we hit our goal 4 months early. It’s definitely time to celebrate!
What have we learned from this experience?
- Having a goal is important.
- If you believe in your goal, you can stick to it, even when it seems impossible.
- It’s empowering to meet a goal in the midst of adversity.
Now that we’re out of credit card debt, we need to build up a better emergency fund, and then attack our student loan debt, currently at $6969. Our new goal is to be completely out of debt by January 1, 2010.
Are you serious about getting out of debt? Do you stick to your goals in the face of adversity?
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Way to go!
I think you still have a bit more work with the hole punch – I can still read the company name on the card….shred that thing!
Mike
Congrats, Lynnae!
Congrads! Nice photo too!
Congratulations for getting the debt monkey thrown off your back.
Now Citibank has to try its darnest to get you to be their customer again. And we know their chances of success, don’t we?
Best regards
Congrats on getting rid of the CC debt! You did an awesome job getting rid of it in a tough time. I’m sure you’ll eliminate the student loans early too.
Congrats, Lynnae!!
I wish my student loans were “only” that much… I’m not even half-way done yet and I’m sitting on nearly $10k’s worth. I don’t plan on letting them stick around for too long though. :)
Congratulations!! It is also great to read that you did it amidst a major trial in your life. Thanks for being an inspiration! :)
Congratulations! How great to finish early! Good luck as you aim for new financial goals. We’ll all be cheering you on!
Hello! Yipee! I am rejoicing with you! Debt is no fun and puts us in chains. Have a great day!-Becky R in NJ
Congrats Lynnae! You’ve had a tough year but I am so impressed with how you and your husband really stuck with it.
Are you going to have a little celebration? :)
WhooHoo!!!!
A huge congrats! That’s quite the milestone.
Funny!! We just paid off OUR Citibank card with our stimulus check as well!!
Unfortunately, we are still two cards away from being free of credit cards, and even then we still have two car payments and a student loan to deal with…but we are making progress!!
My husband just started a blog about our journey to be debt free. It is http://goliathdebt.blogspot.com if you want to see it.
Way to go girl! I think the hardest part when you first starting your debt free journey is not using them when an emergency strikes.
We’re two payments away from paying off our Citibank card as well. That card has been maxed out for as long as I can remember!
Wow! Huge congrats to you guys!
Good for you! We just paid off a credit card, too. One more to go.
FABULOUS!!!! I’m so glad to hear you hit your goal early. That only speaks great things about the future.
I’m SO going to be quoting you in my new book ;)
I think that may be the most beautiful credit card picture I’ve ever seen! Congratulations on your “plastectomy!”
Way to go, Lynnae, good for you! I want to thank you again for all of the good information and inspiration. I get so much out of reading your posts, and it is truly helpful. I’ve added two new links to my arsenal of personal finance, organizing and frugality sites just today after reading your post and comments from previous ones. My husband and I don’t own even one credit card…and don’t plan to, since we think they are dangerous.
HOOOORAAAAYYY!!!!!
It’s so empowering to have set the goal, stuck with it no matter what, and still reach it early!
Way to go! I did that on my mortgage and a 30 yr one shrunk to 10 years! Amazing what a little extra each month will do!
My stimulus check and my little tax refund are going to the home equity loan I took out to make the addition on my little bitty old house. My goal is to pay off the entire $15,000 in 3 years. On my low income, it will not be easy. All but that loan I paid cash for tho, so I feel good about the loan.
Congrats again! Way to GO!!!
Congratulations! What an accomplishment. I’m working really hard to pay off some credit card debt left over from when I was younger. I can’t wait to celebrate my last payment!
If I might offer a word of advice, you might consider not actually cancelling your card. Sometimes cancelling a card, especially one with a solid payment history, can actually cause your credit score to take a hit. By all means, cut that sucker up and forget about it, but you might want to leave the account open. Obviously you have to do what is best for your family and finances, but you might want to look into things and do a bit of research before you make a final decision.
That is terrific! Congratulations on ditching that card!
Congratulations to you both Lynnae.
I love what you did with the card :)
Wow! Congrats!!!! It so nice to hear other people paying off their debt and a great suggestion at using the stimulus to pay it off.
Lynnae,
I believe it would actually help your credit to keep the card open instead of outright canceling it. One of the factors in the calculation of credit scores is the age of the account. Check out http://www.creditboards.com and go to their Forums — tons of great information from people like you and me out there.
Sameer
You might not want to turn off that account just yet.
Your credit score is partially based on the length of time you have had credit accounts and how much you have on them. So if you have a card that has no annual fee, and you have had it a long time, don’t cancel it yet, it could reduce your credit score.
I keep two credit cards in a file cabinet, inside a locked box, inside a sealed envelope. Both of them are on accounts that are 10 years old, and have no annual fee. I keep the balance at zero and my credit score reflects that I am able to maintain credit relationships over a long period of time, and keep my debt to available credit ration in good standing (30% is the max you should use on any credit card, over 40% starts to affect your credit rating).
I could say “Trust me on this, I learned the hard way, that having no credit cards, or young credit card accounts hurt my credit score, even though I had 0 balances.” But you don’t have to trust me. Feel free to search out credit report maximizing sites and you will see the same advice.
I love the holepunched credit card! That is definiteley a photo to frame and hang on the wall!
We’ve considered the credit card freezing in water trick too… Good luck on your new 2010 debt goal!
Homemaker Barbi
Way to go, Lynnae! Congratulations!
I’m celebrating with you because I sold my motorcycle this month and wiped out more than $13,000 of debt. It’s a great feeling when you see an account go all the way to zero.
That’s great. Now you can start calculating and growing your net worth. The average family net worth is about -100K.
Great to see you get rid of that Citibank card. I would definitely cancel it. What’s the point in keeping an account open when you’re never going to use it again? Sever all your ties to them and never look back. I wouldn’t even want my name in their computer system! Looking forward to see you tackle the rest of your debt. Are student loans all that you have left? Exciting, isn’t it?
Congratulations! What a great accomplishment.
Congratulations!
You’ve just stimulated YOUR economy
When you go to cancel the card you might experience the “hard sell”. We canceled a card recently and they did everything to keep us but come to our house and wash the windows 8-). It got really annoying. They kept trying to get us to stay by lowering our APR. As I explained to them, and as they would have know had they looked at the account, we have never carried a balance on that card so a lower APR means nothing to us. They however were acting like it was manna from heaven.
Congratulations! That’s a huge accomplishment!
Congrats! I hope to be out of debt by the end of 2009. Your gains will be moivation to me.
Congrats Lynnae!
We paid off our Bank of America Visa today!
Feels good doesn’t it?
Wonderful!!!!
Good for you.
Congrats! What a nice feeling. As soon as my refund arrives I will be doing the same thing! Again, congrats.
Congrats on paying it off!
You might reconsider canceling it, though. Canceling a card can impact your credit (FICO) score negatively. The score goes higher as account age, so that’s one aspect. Another is ‘available credit’, if you owe $10K, but have $50K available, you are 20% borrowed. But cancel one card, and the percent used can jump up, lowering your score.
Joe
I bet you had fun destroying that credit card. Have you seen the documentary Maxed Out?? Its been playing on Showtime and is a must see for anyone who has struggled with credit card debt,
Wow! Congrats! It’s great to hear success stories such as this.
Congratulations on your progress. I know you must be feeling good. I’ve made more progress this year than I anticipated and am now looking forward to paying off my car and credit card by the end of this year, God willing. I breathed a big sigh of relief when I managed to set enough aside to pay off the central a/c and pay off a bunch of unexpected medical bills. I haven’t received my stimulus payment yet, but half will be going in the emergency fund and half on the car.
I’d have to concur with the folks who say to leave the credit card account open. You don’t have to have the card, just leave the account. And for the same reason–not only the age of your credit account but also for the credit/debt ratio, which is about 30-something percent of your FICO score. Even if you never take on any other debt like a mortgage, insurance companies look at your FICO and judge your insurability accordingly. Someone actually figured out that people with lower FICOs tend to cost insurance companies more money–it doesn’t seem fair, because it can’t be true for everybody, but there it is. Insurance companies care about their bottom line first and foremost.
Great job though. I only ever had one major credit card but I totally blew it.
That is so awesome and I love to read stories like yours!!! I just stumbled on this from Frugal Dad. I will definitely be checking out how you did this and other great articles I can read up on!! Congrats :-)
Big congrats!
That has to feel good, not having that debt any longer! Wish I could take the hole punch to my mortgages.
Well done! I’m so happy for you. We’ll all be suporting you on the way to zero debt in 2009! :)
Congratulations on paying off your credit cards, what a wonderful feeling it must be for you both!
Congratulations. It’s really inspiring that you were able to do this, ahead of schedule, in the midst of unemployment uncertainties.
Hi Lynnae,
I’ve been gone on vacation and just read this post! Congratulations and God Bless You!!!! You did it! I especially liked the line “It’s empowering to meet a goal in the midst of adversity” How true that is.
Blessings!
Congratulations, Lynnae!
WOOHOO!! Doesn’t it feel wonderful!? =0
Canceling your citibank card could really reduce your credit score, especially if you have had it for more than two years. 15% of your FICO credit score is based on “length of credit history.”
Once it’s canceled there is nothing you can due–your score will almost certainly go down substantially, which could result in higher interest rates on new credit accounts. It could even hugely your interest rate on other existing accounts in good standing, if your card issuer has a “universal default” policy.
Tom,
I’m honestly not too worried about my credit score. We have great credit, and we’re not planning on making any major purchases in the near future.
As far as the universal default, I believe that only applies if you’re late on a payment…which isn’t a problem, since I have no credit card debt! :)
Lynnae,
you make a good point. you also say you have “good credit”. There is no more important metric for “good credit” than the FICO credit score. In other words, if your FICO credit score is “low” then in the eyes of banks, credit card companies and lenders, you actually do *not* have good credit, reagardless if what you think.
If you haven’t ordered it recently, then you might be surprised. And please be sure to order your FICO credit scores, not any other scores. The credit bureaus are sellings lots of scores that aren’t used by financial institutions and usually vary substantially from your FICO score.
Hey, I’m stuck now in paying my citi bank bills! I need help. I would appreciate if you could send me an email.
Thanks!
For the love of God.
Citi just got a $300 billion bailout because they couldn’t mangage their business correctly.
And you’re intimidated by some $10 an hour phone rep collections clerk threatening you?
Tell Citibank to go to Hell.
I love your article on how you have managed to get yourself out of debt.It is a breath of fresh air that someone has taken massive action.Well done and all the best for the future .
Congratulations! Your action steps showcased your commitment to getting out of debt. Freezing the credit cards and shredding them? Do you know how many Americans would have a nervous break down doing that?
Credit cards were originally advertised as a convenience back in the 70s, but a lot of American’s have made them permanent “quick fix” fixtures to their ailing personal family budget.
Problem is these cards, when used incorrectly, have the ability to create more financial problems than they solve.
When we invite credit cards into our home with interest compounding at a rate of up to 30% APR, we invite a professional thief into our lives. This thief slowly disrupts our life & our focus. He robs us of our time, life energy, and our future disposable income.
Make no mistake about it, credit cards can be a virtual home invasion if we don’t mind our money.
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