Survive This Economy: Tackling Credit Card Debt
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CHICAGO (CBS) – The Wright family is celebrating more than just the 4th of July today, they are celebrating their biggest payoff ever since CBS 2 started following their effort to “Survive This Economy” eight months ago.
CBS 2′s Dorothy Tucker explains how the suburban family is saving more than $500.
Sinora Wright has paid off a credit card, on which she once owed $1,200.
“Greatest feeling it the world,” she said of the accomplishment.
It’s a goal she achieved by paying more than the monthly minimum on the $1,200 debt.
She saved $575 in interest by sending in $200 a month for seven months to pay off the balance, rather than the monthly minimum of $41, which would have taken nearly four years to pay off the full debt.
Personal finance blogger and author Matt Bell said, “They’ve obviously made a change to start getting out of debt, which is not easy for people to do.”
Sinora said she was able to accomplish that goal by, “Saving on the little things, like our water bill, our electric bill, cutting back on eating out. … Also just being focused, and doing all those things, and setting it as a priority.”
With a pile of other credit card bills that still total more $20,000, Sinora and her husband Marcus now plan to tackle another card.
Bell suggested they tackle their Macy’s credit card bill first, because it has the lowest balance at $271, and they can wipe it out in two months if they keep paying $200 a month toward credit card debt.
Next, he said they should tackle their Bank of America card, which has a $345 balance.
“Within just a couple – two, three months, four months or so – they’ll have completely wiped out two of their debts, and that just feels good,” Bell said.
Indeed it does.
“It’s a like having a big weight on your shoulders, and it just got a little bit lighter,” Marcus said.
If the Wrights stay on track, they could have three credit cards paid off by Christmas, and be that much closer to their goal of being debt free in three years.
With today’s huge savings, the Wrights now have $3,507 in their piggy bank from all the savings they’ve achieved through the “Survive This Economy” series.