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Annika Hudak knows how easy it is accrue a load of credit card debt, and how hard it is to pay it off. After all, she’s done both twice.
Initially, she fell into credit card debt covering everyday expenses in college to make ends meet. She had four credit cards and $20,000 in credit card debt in the span of a year. After graduation, she aggressively paid off her debt in less than a year. But she landed back in debt when her emergency fund wasn’t enough to cover the expense of a cross-country move.
The first time her credit card debt built up, the 25-year-old YouTube creator and Disney product manager from Oregon says she didn’t track her spending or pay attention to her balances each month. And she avoided making payments. When she did pay, she would sometimes pay less than the card’s minimum monthly payment — a practice which can quickly lead to high-interest debts and fees.
She avoided looking at how much she was spending and relied on her credit cards to cover living expenses to finish college. But when Hudak graduated, she finally took a detailed inventory of her total debt balance that she knew she had to pay back. When she saw how much she owed, she knew it was time to get serious about paying it off.
“When I saw the total, that’s when it really hit me because before, all [I saw was] the smaller balances spread across different cards and different accounts that I wasn’t even checking frequently,” says Hudak.
Though Hudak was able to pay down the $20,000 she owed from her time in college, the unexpected costs of a cross-country move set her back and left her with another $10,000 in new credit card debt . Now, she’s working toward becoming completely (and permanently) debt-free, and sharing her advice for anyone just starting to pay down debt:
Figure Out Your Total Debt Balance
Once she forced herself to stop turning a blind eye toward her spending and credit card accounts, Hudak says facing the debt was the hardest part. Based on her own experience, Hudak recommends that you start by looking at all of your balances to see how much you owe in total.
Identifying what got you into debt in the first place can help you pin down what lifestyle changes to make so …….