How to Pay Off $10,000 in Credit Card Debt in Less Than 1 Year

0:00One thing I've realized is that your home doesn't have to be expensive to feel like it's really yours. Sometimes it's just one or two pieces that completely change a space. For us, it was the big umbrella by the pool from Wayfair. Before that, we'd only stay out there for a little while before the Florida sun sent everyone back inside. Now we've actually got some shade. The space feels finished and we spend a lot more time out there as a family. What really surprised me was the value. We found exactly what we wanted without spending nearly what I expected. And the reviews made it easy to feel confident before ordering and everything showed up quickly.

0:36You got to check out Wayfair. They've got everything in one place. And with Wayfair verified, their team has already vetted products for quality, functionality and ease of assembly. I ordered from Wayfair and honestly, you should too. Ready to upgrade your home for way less? Head to Wayfair.com right now to shop all things home and get your space ready for less. That's W-A-Y-F-A-I-R dot com. Way fair, every style, every home. If you've been listening to this show for a while, you know it's not just me anymore. It takes a great team behind the scenes to make everything happen. And if I had to hire someone tomorrow, I'd want someone who could jump right in and make an impact.

1:14That's why I'd use Indeed Sponsored Jobs. When workplace chaos hits, Indeed Sponsored Jobs helps you reach qualified candidates faster. Your job gets boosted in search results, so you're spending less time searching and more time interviewing the right people. Plus, you only pay for results, which I absolutely love. Sponsored jobs posted directly on Indeed are 95 % more likely to report a higher than non-sponsored posts. That's a huge advantage when you're trying to grow your business. Spend less time searching and more time actually interviewing candidates who check all of your boxes. Less stress, less time, more results.

1:52When you need the right person to cut through the chaos, this is the job for Indeed Sponsored Jobs. And listeners of this show will get a$75 sponsored job credit to help get your job the premium status it deserves at Indeed.com slash podcast. Just go to Indeed.com slash podcast right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to hire? This is a job for Indeed Sponsored Jobs. On this episode of the Personal Finance Podcast, how to pay off$10 ,000 of credit card debt in less than a year.

2:46what's up everybody and welcome to the personal finance podcast i'm your host andrew founder of mastermoney.co and today on the personal finance podcast we're gonna be diving into how to pay off $10 ,000 of credit card debt in less than a year. If you guys have any questions, make sure you join the Master Money newsletter by going to mastermoney.co slash newsletter. And don't forget to follow us on Apple Podcasts, Spotify, YouTube, or whatever podcast player you love listening to this podcast on. And if you want to help out the show, consider leaving a five-star rating and review on Apple Podcasts, Spotify, or your favorite podcast player.

3:23Now, today, we're going to be doing something very tactical. I'm going to actually give you a tactical episode on how to step by step go through and pay off$10 ,000 or more of credit card debt in less than a year. And so when we go through these tactics, I'm literally going to take you through exactly what I would do in your situation. Now, this is a very aggressive strategy. And this strategy is going to be something that you will need to make sure that you can actually achieve this if you're going to go after this, because we're going to go through a scenario where I think you can truly, truly benefit from this.

3:54Now, one big thing I want most people to know out there is that credit card debt is a pants on fire emergency when it comes to building wealth. If you have credit card debt and you are sitting at this point in time right now, and you're saying to yourself, I have$10 ,000 worth of credit card debt. I don't know what to do about this. The interest rates are super high. I got to figure out what I need to do next. You need to understand that this is your big priority. So we have a bunch of steps and we map these out in Master Money Academy and other places as well. But one of the biggest things we want you to do is early on, I want you to make sure and ensure that you are going to first have one month of expenses saved up in an emergency fund.

4:35And so before you do this whatsoever, you need to have one month of expenses in that emergency fund to protect yourself. So nothing derails you from being able to complete this mission, because when you are on this mission, and when you are trying to pay off this target, if an emergency pops up, I do not want it to interrupt your specific goal. So first you need to make sure, and this is the order that you have that one month emergency fund in place before we even start diving into this. Then you can start paying off this high interest debt. So pretty much there is not a credit card in existence that does not have high interest debt.

5:09And so I'm going to show you today how we're going to fix that first, the high interest for a short period of time, then we're going to pay it off quicker. Okay. Now, why do we want to do this? Number one is you need to do this for your family or for your future self. This is so important to make sure that you get credit card debt paid off, because if this gets worse or if you continue to decide to go deeper into debt, you are then deciding to reward your current self instead of your future self. We define financial discipline as someone who is willing to reward their future self instead of their current self.

5:41And so when you can reward your future self, that is when you are financially disciplined. You're putting your extra dollars towards your future. And this is changing your future for life. Do this for your kids. And if you don't have kids yet, do it for your future kids because nobody wants to be born into a family that's in credit card debt. They will struggle their entire life. Do this for the next generation. Part of the reason why we have this podcast, part of the reason why we talk about this stuff is to teach you how to build generational wealth. And if you are not willing to take the steps to get rid of debt that is crippling you every single month from being able to invest your dollars so that you can retire, then there is no reason in this entire world why you should even be trying to build wealth.

6:21Because building wealth means that you need to take action on things like this. Credit card debt is absolutely a crippling thing to your finances. And the moment you realize that, the moment the light bulb goes off, the more motivated you are going to be to pay off this debt. And I need you to understand that up front as we go through this. If you do not learn how to pay debt off, it is very hard to retire, especially with credit card debt, because credit card debt just has these high, high interest rates that can destroy you. You also want to do this for peace of mind. If you are anxious, if you are worried, if you are stressed about money, this is going to be a situation where you will sleep so much better at night when you get your credit card debt paid off, when you get this done, when you get it over with, and when you get it behind you.

7:10And then do this for your goals. I know you have money goals and your money goals may not be about money. They may be about your freedom. They may be about, I want my time back. I don't wanna sit in this cubicle anymore. I don't wanna work behind this cash register anymore. I don't wanna be bagging these groceries anymore. I don't wanna work in this office anymore. I don't wanna be doing this blue collar job anymore. Instead, I want freedom. I wanna spend time with my family. I wanna spend energy with my family. That, my friends, is what you need to focus on. What is the outcome that you want?

7:39because money is a tool that is going to allow you to get that outcome. Money is the bridge that gets you across that river. And so once you realize this, that money is just a tool, it is just a tool to get you what you want out of life. That is when everything is going to change for you. That is when all the stress is going to melt away. The anxiety is going to melt away. You're going to be motivated to learn more because you want to understand how to conquer this debt. And so I encourage every single one of you to make sure that you do this. But also do this for your confidence. It's pretty hard to be confident with money and also be in credit card debt unless you really don't understand how credit card debt works.

8:16And so getting this done is really important because otherwise this credit card debt is going to suck away your ability to be able to invest your extra dollars. And if you can't invest your extra dollars, you can't get your time back. And your most valuable asset is your time. Your time is what you need in order to enjoy this life. And so you need to make sure that you are focusing on this. And the last reason to do this is because debt is a thief. Debt is a thief in the night that is stealing away your retirement every single month. You're paying a 15, 20, 25, 30 % interest rate. You are working with compound interest and it's going backwards.

8:53It is going the wrong direction. And it is stealing your money every month, every single month. And so take control of your finances. Take that back for you, your family, your kids, your future. Your future self is going to thank you for paying off this credit card debt. And so when we go through these tactics, I want you to think about that stuff. I want you to think about your why. I want you to understand why you're doing this. I want you to know why you're doing this. Because if you don't write that down, you're going to quit halfway through. And we don't quit. As wealth builders here, we do not quit.

9:30And so this is going to be a huge, huge turning point for you. This should be the light bulb moment for you. It is time to pay off this credit card debt. It is time to get rid of it once and for all. And this is the time right now. This is the time. OK, so we're going to get started here. But first, let's talk about why credit card debt is so bad. All right. So the main reason why credit card debt is absolutely terrible is because of these interest rates. So credit cards typically hover around 20 to 25 percent interest rates, which means that if you carry a balance, your debt is growing faster than almost any other investment can ever beat, including for a lot of folks owning a business.

10:08It's like running on a treadmill and that treadmill just keeps speeding up over and over and over again. So just imagine for a second that you're getting through life and you're going through life on a nice, easy pace, a nice, easy jog. But you find out, oh, I can go out and I can utilize this thing called a credit card. You go swipe that credit card. Well, all of a sudden, the treadmill starts to get a little faster. Now you And as time goes on, because you keep swiping that credit card, but you're not paying it off, that treadmill is going to go so fast that you're not going to be able to keep up anymore.

10:40And you're going to go flying off. And this is why so many people in this country get themselves into financial trouble is credit card debt. I cannot stand credit card debt. I despise credit card debt. It is absolutely terrible that we are not educated about this. And you may not have been educated about this. And that is something we're going to solve right now. because these interest rates are going to absolutely destroy your finances if you are not careful. And so making sure you understand that is number one. Two, minimum payments with credit card debt can lead to a lifetime of debt if you're not careful.

11:11We want to make sure we aggressively pay this down. I'm going to teach you how to do that today, but we're going to get aggressive with credit card debt. We're not going to let it continue to grow. We're not going to let it be in our life for 20 to 30 years. No, no, no, no, no. We're going to do this in a year and we're going to get it done. Three, is it steals your future. Your future every month is being robbed by this credit card debt, meaning those extra payments that you could be putting towards investment so that you could have financial freedom, those extra payments that you could be putting towards a down payment on your house or that you could be taking that vacation with.

11:42Instead, you may have decided, okay, for this vacation, I'm going to swipe the card again. Who cares? I'm already in credit card debt anyway. It's not a big deal. Oh, it's a huge deal, my friend. And so realizing that early on is going to be very, very important. Do not go deeper into debt. So if you have a credit card right now and you are thinking about this, take the scissors out and let's get to slicing. We got to get rid of that credit card first so we do not swipe it again. Also, it kills your cash flow. So it is very hard to budget when you have high debt payments. And so the reality is we are going to figure out how to do this correctly for you so that you can get this paid off quicker.

12:19Plus the stress and anxiety. This is one of the biggest reasons why we want to get rid of credit card debt is because money is there to reduce your stress and anxiety. The problem is people that go deeper in deeper into debt just rise their cortisol levels when it comes to money. They are absolutely destroying the psychology that is around money. So we teach a lot of money psychology here. The reason why we teach a lot of money psychology here is because 90 % of building wealth is what is in your noggin. It is understanding that this is all psychology. It is your behavior. It is how you act. It has nothing to do with all of your head knowledge.

12:55Instead, it's how you act. Your psychology is everything when it comes to money. And so you need to make sure that as time goes on, you are doing things that reduces your stress and anxiety around money so that you do not have the stress and anxiety. Why? Because that means if you have stress and if you have anxiety, you're going to make poor decisions around money. And we don't want that to happen. And once you're in debt, a lot of people feel like there's something called the debt trap, meaning they just are in this cycle where they're going to pay off a little bit of the debt. Then they're going to extend the debt a little bit more.

13:26And they're going to pay off a little more debt. And they're going to start swiping the card a little bit more. And so they get into this cycle that just never, ever, ever ends because of these high interest rates. And understanding how impactful that can be is really, really important. So let's get into the tactics. We're going to get into the tactics on how to pay off$10 ,000 in credit card debt in less than one year. And we're going to do that next. One thing I've learned from running multiple businesses is there's usually a gap between how you think work is getting done and how it's actually getting done.

13:58And we've had times where we thought we knew the bottleneck, only to realize later the real issue was somewhere completely different. That's exactly what today's sponsor, Scribe, helps solve. Scribe is a workflow AI platform trusted by 94 % of the Fortune 500. And Scribe Optimize turns real workflow data into decisions your AI strategy actually needs, automatically capturing how work happens across approved apps, surfacing inefficiency and opportunities with no interviews and no manual discovery, and no extra work from your team, which is the key. And the live dashboard shows where work is happening, how much time it's taking, and where the biggest opportunities are right now.

14:39It automatically discovers workflows across multiple tools, then highlights your biggest inefficiencies and gives AI-powered recommendations with estimated time saving. You know I love saving time. It's also built with privacy in mind. It only runs across approved business applications, user-level data is anonymous by default, and sensitive information is automatically redacted and never leaves your firewall. To see, optimize in action, head describe.how.pfp and mention PFP for a 30-day risk-free trial. That's S-C-R-I-B-E dot H-O-W slash P-F-P. If you've ever felt like your bank is working against you instead of for you, you're not alone.

15:20Between overdraft fees, monthly fees, and just trying to access your own money, it all adds up fast. That's why Chime is changing the way people think. Chime offers fee-free banking built for you, not the bank. That means no monthly fees, no overdraft fees with SpotMe, and access to thousands of fee-free ATMs, so you're not paying just to get your own money. And when you set up direct deposit, you unlock even more. You can get paid early and even access up to$500 of your paycheck before payday with MyPay. And it's just a smoother way to manage your money. They've also got real human support available 24-7.

15:57and they're rated five stars by USA Today for customer service. Honestly, my younger self would have benefited from something just like this. Chime is not just smarter banking. It is the most rewarding way to bank. Join the millions who are already banking fee-free today. Head to chime.com slash PFP. That's chime.com slash PFP. It only takes a few minutes to sign up. Chime is a fintech, not a bank. Banking services for MyPay and Chime Card provided by Chime Bank Partners. Optional products and services may have fees or charges. For more information on APY rates, my pay, spot me, and travel perks, go to chime.com slash disclosures.

16:31We've got a lot planned this summer. Trips with kids, time outside, long weekends, and just more moments together as a family. And honestly, the older I get, the more I realize how important it is to protect it all. The good news is getting life insurance doesn't have to be this huge, stressful project anymore. That's why I like PolicyGenius. PolicyGenius isn't an insurance company. They're an online marketplace that helps you compare life insurance quotes from top insurers side by side for free. And their licensed team helps you figure out the right coverage, answers your questions, handles the paperwork and helps you find the best fit for your family.

17:07It's one of those things that feels like it should take forever, but they make it surprisingly straightforward. And honestly, it turns life insurance into getting more of a summer win than a chore. And there's real peace of mind knowing that your family is protected while you're actually enjoying life together. With PolicyGenius, you can see if you can find 20-year life insurance policies starting at just$276 a year for$1 million in coverage. Head to PolicyGenius.com to compare life insurance quotes from top companies and see how much you can save. That's PolicyGenius.com. My relationship with money has changed a lot over the years.

17:42Early on, I thought building wealth was about making more money. Now, I know it's really about having clarity. When you know exactly where your money is going and whether you're on track, you make better decisions. That's one of the reasons I love Monarch. It's the personal finance app that tracks everything from your accounts and investments to your savings goals and spending. So you can see your entire financial picture in one place. One habit that's made a huge difference for me is my five-minute drill every single morning. I open Monarch, check my spending, investments, cash flow, and net worth, and I'm done in just a few minutes.

18:17It gives me confidence that nothing is slipping through the cracks. I also love the AI Weekly Recap because it'll flag spending changes, upcoming expenses, or shifts in my net worth before they become a problem. Instead of reacting after the fact, I can make adjustments early. It really feels like having a financial advisor in your pocket. Write your own money story with Monarch. Use code PFP at Monarch.com to get your first year of Monarch Core half off at just$50. That's 50 % off your first year at Monarch.com with code PFP. All right, so as we get into these tactics, I want you to understand one other thing.

18:54Is that let's say, for example, that you had a 20 % interest rate on a credit card. And when you looked at that credit card, you said, okay, well, I'm going to buy something for$100 in that credit card. And it takes you 10 years to pay off that credit card. So that original purchase that you made at that 20 % interest rate is going to overall over the course of that 10 years cost you$619 for every$100 that you do not pay down. Each$100 is going to cost you$619. That means in interest, you paid$519.70. That, my friends, is what the cost of holding on to this debt is going to be and why you have to pay it off.

19:29Every$500 is going to cost you$3 ,095. You pay$2 ,595.87 in interest. Every$1 ,000 is going to cost you$6 ,191. Every$2 ,000 is going to cost you$12 ,383. Every$5 ,000 that you have on credit card debt is going to cost you$30 ,958 over the course of 10 years. Absolutely astonishing. And here's the big one. and the$10 ,000 we're trying to get paid off, that would cost you$61 ,917 over the course of 10 years if you do not pay it off now. My friends, this is a pants on fire emergency because you'd be paying$51 ,000 for something that costs you$10 ,000 or a collection of items that costs you$10 ,000.

20:20Now, if you're the type of person that is using credit card debt because you want to go shopping for a couple of shirts, if those shirts are worth an additional$51 ,000 to you, For some of you out there who are big shoppers, it's worth a Birkin bag to you. Is that the case? If not, let's get this thing paid off. I'm going to show you how here now. So the way that this plan is going to work, the way that we are going to do this is you need to be willing to get tactical about this. You need to be willing to dive deep, dig in your heels and be able to pay off this debt. This is strategic and this is tactical.

20:53Okay. So if you've got about$10 ,000 in credit card debt, I'm using this as a easy round example because a lot of people out there, when we talk to them, we say, how much credit card debt do you have? They'll say 7 ,000, 10 ,000, 15 ,000, 20 ,000. It's somewhere in that range typically. So we're gonna use a nice even round number with$10 ,000. You can follow these steps with no matter how much debt that you have. So I want you to understand that upfront, okay? And here's what we're gonna do. We're gonna pay this off in a year and we're gonna be done with it for good. So step one is we are gonna find a zero interest balance transfer card.

21:24We're gonna get tactical and aggressive with this. And so because we're getting aggressive with this, you need to make sure that you can pay this off in that time frame. So I want you to apply for a 0 % APR balance transfer card. OK, it needs to have at least 15 months of no interest. But the longer the time horizon that you can get with no interest, the better off you will be because that gives you cushion. If you can get 18 months, great. If you can get 24 months, great. But try to find one with the longest time horizon. Discover has them. Citi has them. Wells Fargo has some, but I wouldn't really recommend them.

21:53and so all of those different banks are going to have what are called balance transfer cards. What is a balance transfer card? Well, let's talk about that. What it means is that you take a balance from a credit card or sometimes you can combine a couple different cards and you take those balances and you roll it over to this card and it is going to have a 0 % interest rate. I don't want it to have a 2 % interest rate. I don't want it to have a 4 % interest rate. I want it to have a 0 % interest rate, okay? Now, when you roll this over with the 0 % interest rate, what we are essentially doing is saying, okay, in the next 18 to 24 months, I am going to pay this off.

22:29Otherwise, you're going to get what is called an interest bomb hitting you. If you do not pay it off by that timeframe, a big old interest bomb is going to hit you. And now you're back to square one once again. In fact, you're going to get a worse position. And so because of this, we want to make sure that we have 0 % interest on our balance. And so when we do that, that means we can pay this card off faster because we're not accruing interest every single month. We're not trying to pay off this big all interest bill. Instead, we are moving it over to this zero balance card. Okay. It is very, very important to understand that you want a 0 % interest rate.

23:03So typically when you transfer over to these cards, they're going to charge you a fee to do so. So you're actually going to add onto your balance, which sounds counterintuitive. It is not because the interest is going to cost you way more than what this balance transfer would cost. So typically it's like right around 500 bucks, somewhere in that range is what they will typically charge for you to take your value and move it over there. So this is where they make their money up front is if you do pay it off, they make 500 bucks off of you and they're happy, but you're going to be happy too, because you're gonna be paying a lot less in interest.

23:33And so looking for the best one out there is going to be the first starting point. Number two, and step two here is we're going to cut out the temptation. I don't care if you have a credit card from 1995, that's still going on. I want you to take that credit card. I want you to cut it up. I don't care how many cards you have. All of them are gone. Every single one. So you need to take out the old scissors. If you don't have scissors, head on down to your local Walmart or Dollar Tree. Pick yourself up a nice sharp pair of kitchen scissors, and we're going to chop those cards up. And we're going to throw those cards in the trash.