Here's the promised post summarizing our credit card debt reduction progress of the last year (since June of 2008). I've also included some of the key tactics we have successfully used in this process.
Following is a graph showing our debt reduction. As you can see, we started out last June with upwards of $22,000 in credit card debt. Currently, we have about $2900 to pay off:
Here are the techniques and tactics that have most helped us up to this point:
1. Having a goal we care about. By far, this made the biggest difference. Before we solidified our sailing goals, we had little incentive to pay off our debt. We were meeting our monthly payments, and (at the time) weren't in danger of defaulting. When given the choice between using our money to pay off debt or using it to do something fun, we'd inevitably choose the latter. Our sailing dreams changed that.
2. Taking on extra work. Whatever contract offers we received in our line of work, we took them. This allowed us to designate our "extra" earnings for debt reduction.
3. Staying in touch with our credit card companies. When Trent's credit card company suddenly ramped up his interest rate, he took some time to develop an argument as to why this was unnecessary. He called customer service, explained the situation, and let them know why it would be beneficial to them to lower his rate. He was ready to transfer the balance to another card if need be. The approach worked, and they dropped the interest rate.
4. Doing some research and making cuts where we were willing to make cuts. With a little research, we found we could cut back to basic cable (which gives us access to many of the programs we like to watch) and save about $90 a month. We also researched our cell phone plan; after discovering we could get a special discount through one of our employers, we ended up saving about $16 a month there. We also cut back on going out to eat and expensive vacations (though we did decide to spend some money on a short summer getaway). We were not willing to do away with television entirely, nor were we (and by "we," I mean "I") willing to forego an occasional trip to the coffee shop.
5. Being a little obsessive. We checked our accounts on a regular basis and tracked our progress. I know many people would say it's unhealthy to obsess about money, but obsessing about debt worked well for us.
Just $2900 to go! I'm proud of how far we've come, but trust me, I'm not bragging. We have a long way to go; our student loan debt far surpasses our credit card debt. So... we've almost reached base camp, but we have quite a trek ahead of us before we get to the top of Everest.