How I Got Out of Credit Card Debt: A Q&A with Kevin Yu

Paying Off Debt / Friday, November 4th, 2011

One of the most popular posts on this blog is The Best “How I Got Out of Debt” Stories on the Web.

While there’s plenty of information available online about getting out of debt, there’s something  inspiring about a first person account of how someone has actually done it.

With that in mind, here’s a Q&A with Kevin Yu about that very thing.

Kevin is one of the co-founders of DebtEye, and the author of DebtEye’s blog.  DebtEye helps you find the best debt relief option out there, and helps consumers lower their payments to get out of debt.

He is also a certified credit counselor with the NACCC. But this is his personal debt story.

How did you get into debt?

I got my first credit card when I was in college. There were bank representatives that were giving away free t-shirts to anyone who applied for a credit card. When I got my first credit card, I was pretty excited. It started off with smaller purchases such as coffee and food. Since most college students don’t have a lot of money, the idea of “buy now and pay later” attracts the ideal candidates for credit card companies. I was pretty good at paying off the balances at first, but the small monthly payments were attractive enough for me not wanting to pay off the full balance.

How much and what kind of debt did you have? 

Within 2 years, I accumulated about $5,000 in credit card debt. I thought to myself, “I’ll get a job and just pay this off later.” Of course that kind of wishful thinking isn’t advised.

Why did you decide to pay the debt off?

Well besides the obvious reason that having debt is bad, what really struck me was that my balance was never decreasing. I knew at that point in time that I had to take action and figure out a game plan to pay this off, or else I’ll never get out of debt!

Did you focus on making more money or saving money in order to get out of debt?

This is a great question. I focused on saving money in order to get out of debt. Focusing on making more money relies on too many uncertainties in life. You never know what’s around the corner. I focused on the little things first such as making my own lunch, stopped buying coffee, and even downgraded my cable/internet plan with my cable provider.

How long did the debt payoff take you?

If I remember correctly, it took me about a year to pay off about $5,000. I called my creditor and explained to them that I could no longer afford my payments. They actually put me on a special payment arrangement plan to lower my interest rate from 24.99% to 6%.  This definitely gave me breathing room!

What would you want to sure with someone who has debt to pay off?

I could probably write an entire book about this. Having your debt spiral out of control leads you to feel hopeless and embarrassed. No one is going to magically pay off your debts for you and make them go away unless you want to file for bankruptcy. Only you can control the outcome. Make a budget, cut your expenses, live frugal, and most importantly, reach out for help!

Julie’s Note: Kevin’s debt story starts the way many do: on a college campus. Recent credit card legislation prohibits credit card companies from offering free items (like the t-shirt Kevin received) in exchange for a credit card application. But college students are still sought after as customers for credit card issuers. For instance, the mail at our house started including lots of credit card offers for my daughter right about the time she graduated high school and left for college.

Did you sign up for a credit card on your college campus? Do you find first person stories like Kevin’s interesting or helpful?

8 Replies to “How I Got Out of Credit Card Debt: A Q&A with Kevin Yu”

  1. I got my first credit card on campus because they were offering a big bag of peanut M&Ms to those who signed up. This was on a day I didn’t even have the $1.06 I needed to by breadsticks from the cafeteria. I didn’t care about the card, I just needed something to eat. (Didn’t stop me from using the card once I got it, though.)

  2. I got a credit card in college, but always paid off the balance. I had smart enough parents to caution me against the dangers of not paying it off. It was a great way to build credit for me and I don’t regret it. I can see the dangers of college students getting a credit card though.

  3. This is great information and advice! (like everything else on this site :-)) Thanks for this. I know I was scared to death when I got my first credit card in college. My mom and dad had definitely instilled the fear of debt into my 18 year old heart. I have carried that with me forever, but today’s kids don’t seem to really understand that. Is there some sort of online class or something that can help parents and kids learn how to handle money better when they are first starting off? Or more info on getting out of debt once they are there? I think parents may need as much help as their children when it comes to teaching responsibility.

    Again, thanks for this interview! It really helps.

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