Money Lab How I Paid Off Credit Card Debt
Jan 21, 2025
Dive into a personal story about overcoming the daunting challenge of credit card debt. The journey includes valuable repayment strategies like the debt snowball and avalanche methods. Discover the significance of responsible credit use even after achieving debt freedom. Explore insights on handling different types of debt, and gain practical tips for making smart financial choices. The discussion takes a deeper look at the 'wealth wheel' concept, aiming to enhance overall economic health.
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Matt's Early Credit Card Debt
- Matt got into credit card debt at 18 by spending recklessly on a $5,000 limit card.
- His credit score dropped to about 540 due to not paying off balances and accumulating interest.
Debt Snowball Method
- Use the debt snowball method by paying off the lowest balance card first while making minimum payments on others.
- This method offers quick psychological wins to motivate continued debt payoff.
Debt Avalanche Method
- Use the debt avalanche method by paying off the highest interest card first while making minimum payments on others.
- This method saves money overall and pays off debt faster mathematically.