Just wanted to toot my own horn for once.

On November 29th of last year, I decided that I was sick and tired of paying interest to the various credit card companies and being constantly broke before my (substantial to me) paycheck was deposited every two weeks.

I happened upon Fatwallet's Finance forum having been a lurker in FW's Hot Deals for at least five years or so. I did a whole lot of reading here and various PF Blogs, as well as starting to listen to Dave Ramsey's radio show.

I decided to use a Dave's Debt Snowball, but modified for mathematical optimization, since I knew that with my debt load and the money I could throw at the problem, staying motivated would not be a problem.

Here is my original CC Debt load:

Card	 		Balance 	 Limit 	 	Util	Rate
Best Buy	 	$1,269.00 	 $1,500.00 	84.60%	26.99%
Chase		 	$3,319.16 	 $4,000.00 	82.98%	29.99%
HSBC	 		$406.00 	 $800.00 	50.75%	15.79%
SST	 		$2,070.06 	 $2,500.00 	82.80%	26.99%
Suntrust	 	$2,760.00 	 $3,500.00 	78.86%	~20% (Two different APRs Purchase/Cash Adv)
Overall	 		$9,824.22 	 $12,300.00	79.87%

I started by pulling my credit report and scores. My myFICO FICO score was 677. Nothing great, but good enough to demand better rates than 29.99%.

I started with Chase. I called and demanded a lower rate. They offered to convert my card to a Countrywide Rewards card and lower the rate to Prime + 3.99%, which meant 11.49% at the time. I also had unwittingly accrued $100 in rewards. They sent me a check and transfered my payment history to the new account. Since I had never been 30 days late on the account and this was my second oldest card I thought this was all around a good deal.

I could not get the other companies to budge on their rates, so I decided to open some 0% BT cards. I decided on a Capitol One card and a Chase Disney Rewards card. Between the two of them I got $4k in more credit and transferred $3450 to them.

I decided to make something of a budget. I would pay my bills and $1,600 to my credit cards each month, which would leave me with approximately $1000 per month to live on. Since I jumped in to this budget with almost no forethought, the first two weeks were extremely tough as I had to live on $100. Luckily it was Christmas time and I got a timely $50 gift of cash.

Since then, I have put any extra money I've been able to scrape up towards my debt. I opened a Charles Schwab High-Yield Investor Checking Account to help force me to start saving and investing once I finished paying off my credit card debt. I also decided to open a Charles Schwab Rewards Visa to force my self to become responsible in my use of credit.

As of today, this is my CC Debt Load:

Card	 		Balance 	 Limit 	 	Util 	Rate
Best Buy	 	$-   	 	$3,600.00 	0.00%	26.99%
Capital One	 	$-   	 	$2,500.00 	0.00%	0%
Charles Schwab		$2,053.97	$8,000.00 	25.67%	7.24%
Disney Rewards		$-   	 	$2,000.00 	0.00%	0%
Countrywide	 	$-   	 	$4,000.00 	0.00%	9.24%
HSBC	 		$-   	 	$800.00 	0.00%	15.79%
SST	 		$-   	 	$2,500.00 	0.00%	26.99%
Suntrust	 	$-   	 	$800.00 	0.00%	18.99%
			
Overall	 		$2,053.97	$24,200.00 	8.49%

I know that most of FWF won't like it, but I plan to close the Best Buy, Capitol One, HSBC, SST, and Suntrust cards. It will hurt my credit score but I am not planning to take out any loans any time soon.

I pay off the Schwab Visa in full each month and just got my first $50 in rewards directly deposited to my Investor Checking yesterday. The statement balance on this card is generally $1,100.

My only fears right now are a complete lack of an emergency fund. That will be my first step over the next two paychecks to start my $1000 emergency fund. Once I have that, I will split my money between investing in mutual funds with Schwab and putting money in my UFB Direct Savings account. I plan to open and fully fund a Roth IRA at Vanguard ASAP. I will open at the $3k minimum then get it up to $5k as quickly as I can. My only debt currently is a student loan with a balance of $3,300 at 2.65%.

On Jan 1st 2008, I had CC debt totalling $7,375 and a liquid net worth of approximately -$5,200. I set goals of paying off my CCS by the end of April and increasing my net worth to $10k by the end of the year. Currently my liquid net worth is approximately +$1,000, so I am more than 40% of the way there already. My myFICO FICO score has risen from 677 to 739.

I can't even imagine living like I used to. What a waste of my hard earned money! Thank you FWF for helping me learn how to get out of debt, and begin building wealth.

Congrats on sticking to your plan to attain financial freedom. I would suggest that you should build your 6 months of emergency fund before investing in mutual funds.

great job on getting rid of your debt. i agree with the poster above that you should start building some sort of EF. also you can now start to live normally again however if you can stick the way you lived when paying off the debt for few month that EF will grow quickly. good luck.

nicely done fixing your credit. feels nice to have a positive net worth, don't it?
why not stick the cards in a sock drawer instead?

NewNole2001 said:
To the people begging me not to close the cards, I would be willing to keep them open, but having to remember to use them every once in a while would be a pain for me. The Suntrust and SST cards I don't believe I can set up automatic bill payments with Schwab's Bill Pay. At the very least I want to close the SST card. It was originally a Providian card but my crappy way with my finances got it sold to SST. Everything I have heard about SST tells me they are a worthless company.

Why not just not actively close them and see what happens? I have some cards that don't see activity for years and haven't been closed. As long as you're not paying any fees, there's really no harm.

NewNole2001 said:having been a lurker in FW's Hot Deals for at least five years or so.
This makes sense. Good thing you pulled the plug, though.

Gratz

Congrats - I feel your achievment. I was in a similar boat - but with $43,500+ in debit and similar high interest rates. It took me years and years of 0% balance transfers, budgeting, and motivation to pay that off. Like you, I had no emergency fund. Well, now it's 7 or 8 years later, and I'm way past building that emergency fund - have years of expenses saved up. I live the FW lifestyle now, and I have more money saved than I ever imagined.

Congrats OP. Well thought out and organized, all the best!

Congrats OP.
I am sure this is NOT a story CNN Money would like to publish.