I Cut Up My Credit Cards—and Paid Off $30,000

Jill Beirne Davi

living on cashSix years ago, I decided to cut credit out of my life.

But not before they got me in a heap of trouble.

I grew up believing that a credit card was something you needed to be a responsible adult in this world, so I was thrilled when my parents opened up my first credit card for me in college. I felt like I had arrived.

Working as an entry-level assistant in the television industry, trying to make ends meet in New York City, I quickly realized that my $29,500 salary alone wasn’t going to cut it. To make up the difference, I opened up three more credit card accounts over the next three and a half years.

Credit was my security blanket. Instead of opting out in the name of financial responsibility, I could spring for the next round of drinks with my friends. Or take a trip to Costa Rica and charge it, even though my stomach churned when I saw the prices. Or avoid asking for the raise I know I deserved, because I was fine—I didn’t need more money. Credit was my crutch.

RELATED: Real Women’s Secrets to Getting Raises

I told myself it was better to use cards. I was building a credit history. And think of the rewards! With credit, I didn’t have to think about what came in and what went out. I was impulsive with my decisions. If I wanted something, I just bought it, and I carried all my cards with me all the time “just in case I needed something.” Something always came up.

This was before the financial crash of ’08. Credit flowed freely and it seemed everyone was living on borrowed money. I figured, “If the banks are letting me borrow this much, I’m sure it’s fine.” (It wasn’t.) And I rationalized that I was investing in my future by using credit to make up for my lack of cash.

My Own Personal Financial Crash

In 2007, I was two months late on one of my payments. I had never really had a system to pay—or keep track of—my bills, and this one escaped my notice for too long. As a result, my interest rate jumped and my minimum payments quadrupled overnight. Before that moment, I’d never looked at the fine print—in fact, I’d never really considered that credit was a contractual obligation.

Suddenly, I didn’t feel so free.

I plopped down on the floor with a calculator and all of my bills to total everything I owed, and the numbers shocked me into reality: I was almost $30,000 in the hole, which, at the time, was 95% of my after-tax annual income.

Quite frankly, I was pissed. How had I let it get this bad? I realized that if I was going to get out of debt, I’d have to end my addiction to plastic. This wasn’t a minor realization; it was a turning point in my financial life.

Suddenly, I was determined, resolute … and scared as hell. I was terrified that some catastrophe would strike and I’d regret that I didn’t have my cards to save me. Even so, that night, I cut up all of my cards—except for the one my parents opened for me in college.

I took that card, placed it in a Tupperware container of water and stuck it in the freezer so I couldn’t use it.


    Great story! My husband and I also cut up our credit cards about 5 years ago and have not looked back. We have paid off our credit cards ($10,000) and with my loan repayment through the Army paid down my student loans from $140000 to $30000. I feel so much more relaxed and free without the credit cards, and don’t miss them at all. I think so many people are tricked into believing that you have to have credit cards to survive, and that is simply not true. Living within your means, having a budget and saving for what you need is the best way to financial success!

    • Jill Beirne Davi

      WOO HOO! Congratulations on your success!! Isn’t debt-free living freeing? I don’t miss my cards either. :) Thank you for sharing.

    • http://www.facebook.com/tammy.miller.1276 Tammy Miller

      $140,000 that a lot for college !!!

      • Charles Chatman

        Not really. As a matter of fact, that may be a conservative figure. Typical tuition for a mid-level four-year institution is approximately $40-50,000. Mutliply that by 4 (for a 4-year degree) puts a student in the red by nearly $200,000.

        • Christina Kochan

          Your figures are definitely only typical for private institutions. Tuition at a public university is closer to $5-10k per year. My tuition was just a little over $20k for my computer engineering degree.

  • http://twitter.com/fleur_de_livres emsies

    95% of income paid off in 18 months?

  • Lindsay Decetise

    Excellent article Jill!

    • Jill Beirne Davi

      Thank you Lindsay!!! YAY! Big hug to you!!

  • dont’dragmedownwithyou

    While I give you credit for changing your ways eventually, it did infuriate me that you said, “in fact, I’d never really considered that credit was a contractual obligation” What a lie! Do you think credit card companies just give you money for free? It’s that kind of deliberate self delusion, where people claim, “I didn’t know”, so they default on their cc debt, mortgages and declare bankruptcy and drag those of us people who have always been responsible down with you that I think is disingenuous and dangerous.

  • Shelly

    you dont know how much this story means to me I’m currently in the same predicament I didnt realize how bad it was until I checked yesterday I got so fed up that I” went ham” on my credit cards and cut them all up…it was and still is the mos scariest feeling ever. now im in the process of creating a realistic budget to pay them all off and live comfortably..Thank you so much for sharing your story.

    • Megan

      I am also in this same predicament – man I thought I was the only one, good to know I am not the only one….but I need to get on track and be like you Shelly & Jill. But I have no clue how to budget…never in my life have I budgeted and I am 38 years old, probably why I have been in debt most of my life and always using credit cards…I have gotten out of debt with help of family not because I know how to budget. I am adult and need to start doing this for myself(don’t you think)….how do you suggest I learn how to budget? Please need advise……Thanks Megan

  • michwake

    Thanks for sharing your story. It fits close to what I am going through right now and it is very encouraging that there is light at the end of the tunnel.

  • OzMan

    I went without a credit card for 10 years (from the divorce until last month, when I wanted to improve my credit score before looking into buying a house). Where’s my article? ;)

    Seriously, though, congrats to the author for getting out of debt.

  • Gabriel Lewis

    DO NOT cut up your credit cards. Moderation in spending is the key. But It might be a bad idea to give up credit all together, since closing lines of credit or not using them and getting your credit line reduced or account close will hurt your credit. Not having a credit history for years can also hurt you a lot more, than having some credit card debt. Some of the people with the highest credit scores are regular credit users with revolving balances. As long as you don’t owe 40, 50+ grand on credit cards I wouldn’t worry. There are worst things than credit card debt, such as student loans. Student loans are the worst type of debt to have, and there is no bankruptcy protection for student loans. They also have some of the worst terms. There is a huge hypocrisy with a lot of people over debt. Someone with a large student loan, will look down upon someone who used their credit card to pay for something, and call them irresponsible but they don’t look in the mirror and see that they have the worse type of debt anyone can have: Student loan debt. There is also a double standard when it comes to student loans. To a lot of people student debt is “good debt”, and a credit card balance is “bad debt”. This is false. Having 100K in student debt for a degree that most likely will not get you a job that pays high enough to pay back your loan is financial suicide. Look up “student loan bubble crisis”.

    • Alice

      You are correct that moderation in spending is important. And if you have the discipline to not use your cards in excess and pay on the balance each month, then go for it. However, that wasn’t the case with the author (or for many people who land in massive debt). It can be extremely tempting to have that much “free money” at your finger tips. If you can’t use them responsibly, cut em up and close the account. There are other ways to build credit.

      • Gabriel Lewis

        Having a balance is not a bad thing, unless you’re maxing out card, after card. Paying your balance off every month will not build your credit. You might as well never even have a credit card in the first place. Regular payments will build your credit. Cutting them and closing accounts can actually damage your credit. It is best to leave them open, just use them regularly, but lightly and monitor any inactive or infrequently used cards for any possible charges, or fees, such as an annual fee, which may get on your account, without warning (this can happen if you changed addresses, or emails and forgot to update your personal info on one of your accounts). Also, not using your cards can lead to your credit limits being cut, or accounts shut down, which can impact your credit source negatively. It takes discipline, but a mature adult should be able to do this, if not, they might have a problem.

        • Andy

          Actually having too many credit cards is what got us in trouble…it is a myth that having credit card debt is good for a credit score. That is how people get in trouble. They do fine at first and then they get complacent, and miss a payment, or get sick and lose a paycheck, and bam high minimum payments. Credit cards are dangerous if you are scraping by already. Sorry dude, but I dislike credit cards, and you will NEVER convince me to think otherwise. I could care less about a credit score when I cant even buy groceries because I owe so much to the credit cards. Life happens, and circumstances out of our control can dictate our lives. Not having debt and saving my money is better than giving my money to some rich corporate jerk in a credit card company.

  • ew0054

    Thank you for this article. Like you, I thought credit cards were the responsible thing. I would pay groceries and gas mainly on 6 cards, because I thought it would build a history. Then I got deeper into a line of credit account through my bank, which I felt was “always there when I needed it.” I was using this LOC to pay off credit cards in full, but I had racked up $15k in a few months on the LOC, and the interest on it was in the hundreds per month. I have since cheaped out my life, living off Ramen noodles, and got the LOC to under $4k with a few hundred on CC’s, but I like your idea of cutting up the cards and getting away from credit altogether. After doing a sheet, I figure I can live off $200/mo for gas and food, so every pay period (2x/mo) I withdrawl $100 cash and I have to stretch it.

    • Megan

      I read this EW0054 and I think this will be so hard for me…..I have never had to go without anything in my life…..so it will be VERY HARD to go and stretch $100 for me and I don’t think I could handle ramen noodles……just because I have never had to do this……….ugggg……I want out of debt so bad!!!!!

  • Nathan Sales

    I’m going to take all my credit cards and put them in my freezer now.

  • john

    your all correct, credit cards are the worst pay them off and pay with cash its the best way to go, creditors love when you max out your cards, that is financial security for them and remember, we bailed them out so where paying not just in interest but in taxes

  • lucille

    I realized the same thing just took me longer.I worked till age 65.had charges 1 year ago of &32,000.Am now on limited income can’t work any more so last year I started digging myself out of the hole I dug. Iam happy to say that I’ve cut that debt in half already & have cut up all but 1 of my cards.What scared me was being on short end of the strick I thought omg! my kids will have to pay these off.cash or don’t buy. i”m proud I made this change.sleeping better & find that iI didn’t need “stuff” so much.

  • mtngirl

    I have started the new year paying off debt. I still owe about $28,000 between credit cards($5k), car loan($11k), and a loan for a piece of land($12k). I used to spend my overtime pay for 3 or 4 vacations a year. Now I’m using the extra money to pay off my debt. I hope I can stay dedicated. I’m sick of paying bills and I have learned my lesson!!

  • Jamie Han

    Cutting up your credit cards is step #1. The second step should just be cutting all your expenses down to nothing. I would first look at your insurance costs. They are a huge killer in this country… especially auto. I would look to bring auto insurance payments down to around $25/month (take a look at 4AutoInsuranceQuote).. I would also look to bring your gas/fuel costs down by using an app like GasBuddy (it can help you fill up for less than $20). Once you finally got your spending under control, you’ll realize that you can start paying off your debt FAST.

  • Cass

    I enjoyed your article.

  • Mr Anderson

    Do you need loan? if yes please get back to us via email(georgeanderson.loanfirm255@gmail.com)

  • Fiona Davy

    I’m just embarking on this path so thanks for the article. I am especially noting the tax return suggestion … great idea.
    Wish me luck!

  • Frank

    The beauty of being debt free is also that a tax return could in many cases pay off six months of car insurance and in many cases a year of another average monthly payment up to $100. Its a great way to start off tge new year. Six months of not having to pay car insurance makes income that much freer to use on whatever!