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A 5-minute conversation with my grandmother helped me get out of the post-divorce debt that plagued me for years

Submitted by Tech Insider on June 2, 2021 - 2:20pm

steph hallett with grandmother

Summary List Placement

When I got divorced seven years ago, I started my life over from scratch. I didn't own a lick of furniture, and my savings had been decimated by a house I nearly bought with my ex before pulling out of the deal at the last minute. After we split, I signed a year lease on a new apartment and was ready to start fresh and design my own happy place, but I didn't have cash on hand to do it. So I turned to my trusty credit card.

I bought what I needed: a couch, a bookcase, a desk and chair, a tiny kitchen table with two seats, towels and miscellaneous bathroom items, and my (still) beloved orange rug. I was good at shopping, so the total for all my new goodies was about $1,400. But with my housing costs now double what they were when I shared an apartment with my ex, I didn't have the means to pay off my card in full, or in half, or even a quarter at the end of the month. I started making whatever small payments I could, usually just a few dollars more than the minimum due.

As the next couple of years went by, my balance grew — along with interest adding to my balance, I had some unexpected car and medical expenses come up. No matter what I did, my balance always seemed to hover around $2,000. I couldn't get it down, and it was driving me bananas. I needed a plan.

I had a life-changing talk with my grandmother

My grandmother, who never had much money and could make a bag of frozen fries and a can of soup last a week, one day asked how things were going. "You must be so happy to be free," she said, referring to my breakup. My voice warbled: "I don't feel free!" 

I told her all about the credit card debt that was stalking me, how I couldn't seem to pay it down no matter how many extra $20 payments I made throughout the month. "Oh that's an easy problem," she said. "What you need to do is transfer your balance."

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I'd heard her talk about transferring her credit card balances in years past but didn't fully understand the process. When my uncle needed a new car or someone in the family needed school supplies or clothes, she'd throw the cost on her credit card and then move the balance to a 0% interest card and steadily pay it down. "Then your balance doesn't grow, sweetie, and you can move on," she told me.

If you, like me, have never heard of a balance-transfer credit card, it works like this: You take the balance you owe on one card (with a higher interest rate) and transfer it to your 0% card (which you have to apply and be approved for like any credit card). You may have to pay a fee to transfer your balance, typically a small percentage of whatever amount you transferred. Then, you get a specific period of time to pay off your balance at 0% before an interest rate kicks in.

It wasn't a magic bullet (like a raise or a windfall might have been) but it was a plan. I could see the end of my debt and imagine the weight lifted off my shoulders. 

Now, you might think it's absurd to hold onto $2,000 of debt for years and years. Looking back, there are certainly things I could have done differently to get that balance paid off faster, like sold my car or moved in with a roommate. But in my post-divorce life, my solo apartment and my car were my freedom — they provided a safe space no one could invade or take away from me, and the ability to go anywhere and see anyone I needed to when I longed for support, comfort, or distraction. And I needed a lot of that.

I made a plan — and saw it through

Up till that point, I'd been making payments of between $50 and $100 a month on my card, but with new expenses added, the cycle was swallowing me whole. So, armed with my grandmother's sage wisdom, I opened a 0% interest balance-transfer card and whooshed away that $2,000 balance (that I'd been paying well over 20% interest on for years). My card offered an 18-month promotional interest rate period, so if I paid off my balance in that time, I wouldn't owe another cent in interest. I looked at my budget and pared down some of my expenses (like reducing my grocery spending), and found I could make a payment of $150 a month. In just about 13 months, my balance would be gone. 

When I made my last credit card payment in 2019, I danced around my living room. I was liberated, at last, from the threads that bound me to my pre-divorce life. And it felt fabulous.

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