Credit card debt is one of the hardest types of debt to tackle, mostly because the interest rates are so high. If you only pay the minimum, it sometimes feels like you're standing still.
At least, that's how Jon Dulin felt when he looked at his credit card debt and realized how slow his progress was.
"I had all this credit card debt, and I kept moving it around," he says. "But I never seemed to get rid of it."
Confronting $10,000 in credit card debt
"It all started after I graduated from college in 2001," says Jon. "I had a finance-related degree and thought I was set for a cushy job."
However, he didn't find a job that summer, and he found it even harder to get a job after the terror attacks in September 2001 were followed by a recession.
"I found myself walking around the mall to occupy my time, and pretty soon I was buying clothing and electronics with credit card bills," Jon says. "I told myself I'd be able to pay it all off when I got my job."
When he got close to maxing out his first credit card, Jon found a 0% APR balance transfer offer and moved his balance. He was using money from his savings to pay the minimum. However, Jon didn't just pay off the balance on the new card. He immediately began racking up new debt on the old, paid-off card.
He continued debt spending, depleting his savings, until one day he was looking at a jacket in the mall. "I wondered why I was buying a jacket when I already had so many other jackets," Jon says. "At that point, I admitted I wasn't happy with my life, I had become depressed, and I had to come to grips with my situation and start breaking the cycle."
By this time, Jon had $10,000 in credit card debt and no way of paying it off, no matter how much credit card refinancing he did. He realized he needed to get help, not just for the spending problem, but for the underlying issues.
Finding a support system
Jon lived with his parents outside of Philadelphia, so he had a place to live. But what he needed, he realized, was outside help. He sought a therapist and began treatment for his depression.
"I thought I had a spending problem, but it was more than that," he says. "Spending is often a manifestation of something else going on."
He shelved his pride and got a part-time job so he could begin tackling the credit card debt. Finally, a few months after starting the part-time job, Jon landed a full-time job in the financial industry. He didn't quit the part-time job, though.
"Keeping both jobs allowed me to put more money toward paying down the debt, and I was able to get rid of it in about a year," says Jon.
He didn't just rely on his parents and therapist for support, though. Jon also turned to his best friend, who was living in Pittsburgh at the time.
"I told him what I was trying to do, and he became my accountability partner," he says. "I updated him and he cheered me on."
Finally, Jon and his friends looked for creative ways to have fun without spending money. He did tell them about his goal to pay off his credit card debt, but he's not sure how much sway that had.
"The bar scene was getting stale anyway," says Jon, "so we were looking for other ways to enjoy ourselves."
They started taking turns cooking at each other's houses and playing board games. Even today, more than a decade later, he still gets together with his friends once a month to play board games and have fun.
Paying off credit card debt at your own pace
One of the keys to successfully paying off credit card debt, says Jon, is finding a pace you can stick with. Originally, he tried to completely cut all the fun from his budget. He wanted to put every cent toward debt reduction and get out almost immediately.
"That worked great for about two weeks, and then I realized I was becoming too unhappy again," he says. "I was trying to get out too fast. I didn't get into debt overnight, and I wasn't going to get out of debt overnight."
He slowed the pace, and allowed himself weekly, inexpensive ways to have fun. Jon's plan was to create something sustainable, while remaining in therapy to tackle his depression. "The best plan in the world won't matter if you can't stick to it," he says.
Once he was able to address his spending and some of the underlying causes, Jon was able to more effectively move forward. He remained in therapy for about two and a half years, even though he had paid off his credit card debt in about a year.
"I found a lot of value in talking to someone about life, and not just the depression," Jon says. "It's good to have someone who is unbiased about what's going on and you can tell everything to."
Tackle the cause of debt, not just the symptoms
In the end, Jon believes that, for many people, debt spending is a symptom of other problems.
"I want people to know that it's not always just a spending problem," he says. "Often, there's a deeper issue you might not want to address."
Getting rid of credit card debt permanently requires planning and discipline. Sometimes a strategy to refinance credit card debt helps. But you also need to get to the root cause of why you're in debt, Jon points out. What's going on that could be contributing to these behaviors?
In the end, Jon is grateful that he recognized that it wasn't just a spending issue. "I didn't want to admit to myself that I was depressed," he says. "It took a lot of work, and crying, and without therapy I might not have overcome the cycle."
"Find the true cause of the situation," Jon continues. "Make a plan to address the underlying issue even while you work on your plan to stop the spending and pay down the debt."