Are you going through a very hard time dealing with Credit card debt? Don’t worry! I am here to help you. As a person who has already been through these situations, I can share my life experience with you.

So here comes the part one of this journey. Yes,

Get Debt Free with me: Part One

This part (I mean Part 1), if:

  1. You are dealing with Credit card debts
  2. You earn at least something greater than or equal to the sum of your Spending + Minimum payment for each credit card

By Spending, I mean just your essential spendings, which don’t include any money spend on entertainment or eating out.

Yes, I know it sounds tough, but there is no easy way to help you. You need to be a responsible being, at least for now, to have a peaceful life later. Else your dream just stays as a dream. How do you feel imagining a life only to pay debts throughout? Its threatening! Right? Be responsible my friend!

Alright! let me teach you how to calculate your essential spendings. Take the sum total of all these:

  • Your rent (If you are renting a place to live)/ Your mortgage
  • All your Insurance (Property + car + any other)
  • Any Loan monthly payments (Student loan + car +any other)
  • Grocery (I will teach you how to minimize this in a later Article)
  • Travel Expense (gas +parking+ transit)
  • Any other bills (Hydro + Internet + phone + etc.)

These are the things I meant by essential. If you have anything more to the list, go ahead and add it (No, no, no…. strictly no entertainment or eating out).

You may be wondering if you need to avoid entertainment and eating out just from this list? No! You need to avoid it completely! Being sad? No worries, I will teach you how to reward you with these without spending another penny! But only if you follow this program correctly. No cheating here! Okay?

Now take an average minimum payment amount for each of your credit cards. Say, it is 50. Add 10 CAD to it, so 60 CAD. And if you have 5 Credit cards, then calculate as follows:

5 * 60 = 300 CAD

So, 300 CAD is your Minimum payment amount, and let your monthly spending from the amount list be 2000 CAD. Add a 100 CAD if you can afford which makes it 2100CAD.

Your total spending = 300 + 2100 = 2400 CAD (This is an example. Calculate your amount yourself!)

Is your monthly earning more than this amount? Then read forward.. (don’t worry, I have other ways to help who don’t earn enough)

I will divide this part into six steps:

First Step: Keep them away

You read it right. Keep all your Credit cards away from your eyesight. You can choose whichever place that don’t come to your notice everyday. Yes, literally hide them from you. I have heard many financial experts advising people to hide it in the freezer. This trick makes it hard to pull if off. Go for it if you dare! And you know why this is for. Right?

Yes, stop using them. Keep them away, so that you won’t be able to use them, even if you wish!

Second Step: Choose the Right Card

No, this is not about applying for one more card. Don’t do that unless you pay all the outstanding debts! it may be tempting. But never go for it. Its hell dangerous than anything else!

Okay then whats this “choose the right card”? This is the card that you are gonna pay off first. Choose the right card using these three guidelines :

  • The Card which you have the least balance to pay off
  • The Card that gives you some sort of  rewards for most purchases/spending (cash /points)
  • The Card that has the highest purchase interest

These guidelines, are written according to the priority to choose the card. So if you have a card that you have debt of 500 CAD, which may be the least amount you owe, and it matches any of the other two guidelines, choose that card.

Third Step: Use the Card

Before you follow this step, you need to pay off your chosen credit card in full. I will write another article with tips and tricks to pay off that credit card.

Once you have paid off the card, next step is to make use of it. Pull off that card from your hiding area. And if possible, call the Credit Card Company and set a spending limit to the card. The spending limit can be calculated as follows:

Spending Limit = Your maximum grocery + Your other bills (where credit card can be used) + Any other expense like rent/gas which can be covered by credit card

Use the card for any purchases that comes under this spending limit.

Warning! no overspending


Fourth Step: Move the Amount

Now, every time you get your paycheque, move the amount equalling the spending limit to a savings account or a preferred chequing account which you do not use for any other transaction.  Also add an amount anywhere from 10 CAD to 100 CAD to this amount before moving to the savings/preferred account.

Tip: if you are too lazy to do these, ask your Company HR to automate this Amount from your Salary automatically to your preferred/savings account. Most of the HR will do this for you. Nothing bad in giving it a try!

Note: This spending doesn’t include anything that cannot be done through a credit card. Don’y forgot to make those payments on time :p


Fifth Step: Pay it Off

Cover all your expenses whichever is possible with the chosen Credit card and pay it off right away from the money you have set aside in the savings/preferred account. Be sure not to overspend with your Credit card.

The amount you have in the bank savings/preferred account should be always more than what you owe to the paid off credit card.

In this way, you keep building your credit, also earn some rewards points/cash back, which can be used for the next month grocery or any entertainment purpose. without spending another penny from your hard earned money. Also you will build some savings in the account, even without your knowledge.

Be careful not to increase your budget. Don’t be tempted seeing amount in the account and go for increasing the budget. Wait till you pay off all your debts!


Sixth Step: Go for the next

Continue this spending habit. Now, select the next credit card to pay off. Warning! let it sit on the place where you have hidden it. We are not gonna use this card for any spending, but just going to pay it off.

Pay minimum amount + 20 CAD for all other cards and as much as you can for the second selected card. you don’t have to pay any minimum balance for the first credit card you already chose (the one you are using for spending). Because, you are now a good and smart girl/boy who pay that off as soon as you spend anything with it.

I know this is a little hassle, but you need to work hard to save your life. If you are too lazy to do this, here is a tip!

Set pre-authorized automatic payment from your savings/preferred account to the first Credit card (full balance amount). In this way, you don’t have to worry about tracking each expense and pay it off.

But I don’t recommend this, due to the below cons:

  • Your chance of overspending with the Credit card is too high, as you don’t see what is left to pay
  • In any case, the transaction don’t go through from the account to Credit card, you will be charged a overdraft fee from the Bank
  • Also, this will not contribute to make you a responsible being

To conclude

This will help anyone who earns more than their maximum spending each month. The only thing you need to have patience and being sincere to yourself. Start doing these steps, and you will get the feeling of rewarding yourself by paying off the hell debt. And for those who are not lucky enough to earn to use this method, my next article is gonna help you.

Feel free to comment any questions you may have, or any suggestions you may have from your own life experiences.

Have a debt free and peaceful life guys 🙂

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.