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My Credit Card Balance Keeps Growing Even Though I Stopped Spending. How Do I Get Out? · Becoming Financially Confident

• 0:37
  You stopped spending on the card months ago, so why is the balance still going up?
• 0:42
  And listen, you're not imagining it and you're not doing it wrong.
• 0:46
  There's a reason this happens and a way that actually works.
• 0:50
  Rates are at recent record highs.
• 0:54
  This trap has a door, though, so stay with me and let me help you get out of that today.
• 1:08
  Hello and welcome to Financially Confident Christian.
• 1:11
  I'm Ralph Estep Jr.
• 1:12
  Thank you so much for spending a little time with me today.
• 1:15
  Today we've got a great listener question of someone who's feeling the pain of a growing balance on their credit card even though they're not spending anymore.
• 1:24
  They've stopped spending, but that balance is still climbing and their minimum payments are barely moving it.
• 1:31
  And they feel trapped.
• 1:33
  And I get that because you've done all the right things, but it feels like it's still going in the wrong direction.
• 1:40
  And if you've got a question for me to answer on this show, I would love to hear it.
• 1:43
  You can go to financiallyconfidentchristian.com/question We'll put a link in the show notes.
• 1:50
  But again, that's financiallyconfidentchristian.com/question Let's get right to today's listener question.
• 1:57
  This was the subject line.
• 1:58
  It says, ralph, I stopped using my credit card and the balance and this is all caps still went up.
• 2:04
  How?
• 2:05
  Well, here's your question.
• 2:06
  Hi, Ralph.
• 2:07
  I am so frustrated I could cry.
• 2:10
  About four months ago, I cut up my main credit card and I swore I wouldn't add another dollar to it.
• 2:16
  And I've kept that promise.
• 2:18
  I haven't bought a single thing on it.
• 2:21
  And the balance is still higher today than when I stopped.
• 2:24
  Now I make the minimum payment every month, sometimes a little more when I can.
• 2:28
  And it's like the thing is fighting me.
• 2:31
  I'm around $11,000 on it and it feels like quicksand.
• 2:35
  Ralph, I don't understand how I can stop spending and still go backwards.
• 2:40
  It makes me feel like I'm never going to get out from under this.
• 2:44
  Is there something I'm missing or am I just stuck forever?
• 2:48
  Please help me understand what's happening and what to do.
• 2:51
  Thank you.
• 2:53
  Well, thank you for sending that in and thank you for bearing your truth in that message.
• 2:58
  And I've got a simple answer for you.
• 3:00
  It's not your spending, it's interest.
• 3:03
  That's just how interest works.
• 3:04
  And today we're going to see it and we're going to dismantle it and I'm going to show you A real exit plan.
• 3:11
  But let's start by understanding why it's growing.
• 3:14
  You're paying interest on the whole balance right now.
• 3:17
  I was reading some statistics the last couple days.
• 3:20
  Interest rates are well over 20%.
• 3:23
  So when your minimum payment is is less than the interest that's being accrued on that $11,000 loan, the balance is going to grow.
• 3:31
  It's not that you're doing anything wrong.
• 3:33
  It's a simple math equation.
• 3:36
  So we got to start off by naming that you're not adding to the debt.
• 3:40
  The interest rate is doing it for you.
• 3:44
  So what's the solution?
• 3:45
  First solution, you've got to pay more than the minimums.
• 3:48
  Always.
• 3:49
  Credit card companies love to put that in the minimum payment.
• 3:53
  There's because if you pay that minimum only, that debt will never go away.
• 3:59
  It's going to keep you stuck.
• 4:01
  So you've got to pay more than the minimum.
• 4:03
  That extra hits that principal.
• 4:06
  If you put a fixed extra amount, it completely flips the script.
• 4:10
  So pick a number and hold it.
• 4:13
  You can move from quicksand to solid ground.
• 4:17
  Remember this.
• 4:18
  The minimum payment is a leash.
• 4:20
  It's not a ladder to getting out of debt.
• 4:23
  But here's another idea.
• 4:24
  This is one of the things you don't hear talked about a lot.
• 4:27
  Attack the interest rate first.
• 4:30
  Fight the rate.
• 4:31
  This week you can pick up the phone and call your credit card company.
• 4:35
  Ask them to lower your interest rate.
• 4:38
  Hey, even if you have to find another card with a 0% rate for some period of time, maybe you consolidate this.
• 4:46
  But every point that you can reduce that interest rate is going to give you more movement because more of that payment is going to go to the principal.
• 4:55
  When you lower the rate, you take away the fuel.
• 4:58
  The debt runs on.
• 4:59
  Think about that.
• 5:00
  The rate is like gasoline.
• 5:02
  As that gasoline fills in, it just blows up.
• 5:07
  So another key is to throw everything you can at it.
• 5:10
  Find extra.
• 5:11
  Get a little extra work.
• 5:13
  Sell some things.
• 5:14
  Trim that budget.
• 5:15
  Aim it at that card.
• 5:17
  Look for the obvious budget leaks.
• 5:18
  We talk about these on the show all the time.
• 5:20
  Subscriptions, dining those extras.
• 5:24
  Here's another thing you consider anytime you get a windfall, like a refund on your taxes or a bonus, maybe you've got a little side business or maybe you've got some things laying around that you could sell.
• 5:35
  Put those against that loan.
• 5:38
  That push turns years into months.
• 5:41
  Add the lower rate and you can have an intensity of bill paying this down.
• 5:45
  But it's only temporary.
• 5:47
  A short season of intensity beats years of barely treading water.
• 5:51
  And that's what you're doing right now.
• 5:53
  You're making all the right decisions.
• 5:55
  You're not putting more debt on it, but you're treading water.
• 6:00
  But another thing you've got to do, and a lot of people don't think about this, it's one thing to get rid of the credit card, it's another thing to stop using it.
• 6:07
  But you got to protect yourself so it doesn't refill.
• 6:11
  I've seen this happen so many times.
• 6:13
  It's so easy to slide back.
• 6:16
  So this is where I'm going to talk to you about that starter emergency fund, even $1,000, because you're going to feel this pressure at some point.
• 6:25
  If you don't have that emergency fund to go use that credit card.
• 6:28
  And then all that work you did is just going to evaporate.
• 6:31
  But if you have that cushion, it catches those surprises.
• 6:36
  And that way you can continue to move forward.
• 6:38
  Now, one of the things that I do want to mention here, continue to pay off that credit card, don't close it, because that's going to be excellent information on your credit card, on your credit card report once you
• 6:48
  get that amount down.
• 6:50
  So keep it low, stay at zero with it, pay it off and build a cushion so that the next emergency doesn't undo the win.
• 6:59
  Now, I want to go a little deeper into something you said.
• 7:02
  You said you're so frustrated you could cry.
• 7:05
  And it feels like no matter what you do, you're never going to get out of this.
• 7:09
  I want you to hear me on this.
• 7:12
  This is not forever.
• 7:14
  And you're not stuck.
• 7:16
  That quicksand feeling that you have is real.
• 7:19
  I felt it myself.
• 7:21
  But it's not the truth.
• 7:24
  Here's what faith doesn't promise you.
• 7:26
  It's not gonna promise you that the balance is gonna drop overnight.
• 7:29
  There's no some magic pill that you can take.
• 7:32
  It doesn't promise that the rate suddenly becomes kind.
• 7:34
  You may make a phone call and they might be too bad we can't reduce the rate.
• 7:39
  And it doesn't promise the road out is short.
• 7:42
  But here's what our faith does.
• 7:44
  Promises.
• 7:45
  It promises.
• 7:46
  The God who sits captive free cares about this captivity of you as well.
• 7:51
  God cares about that feeling like you're in quicksand.
• 7:55
  He cares about where you are.
• 7:57
  He cares about that interest rate.
• 8:00
  It talks about in the Bible that the borrower is slave to the lender.
• 8:04
  But God's story is so much more beautiful than that.
• 8:07
  God's story about is about release.
• 8:11
  He gives you steady steps, but he doesn't abandon you in that he walks with you.
• 8:17
  And friend, feeling tired isn't meaning you're failing.
• 8:21
  So don't lose heart.
• 8:23
  Take that next faithful step.
• 8:24
  You've already taken a bunch of them.
• 8:26
  And then take the next step.
• 8:28
  And then the next step, this door opens and you're already reaching for the handle again.
• 8:34
  You're not stuck.
• 8:35
  It's just a hidden rate.
• 8:36
  It's just that interest and understanding why it's doing it is the first step.
• 8:41
  So now it's time to take that mystery and build a plan.
• 8:45
  So here's your win for today.
• 8:46
  Find the rate and then call your credit card company and ask them, can you lower my rate?
• 8:53
  Listen, all they can say is no, but they might actually reduce it because they want to keep your business.
• 8:59
  Which leads me to today's Bible verse.
• 9:01
  It comes from the book of Proverbs, chapter 22, verse 7.
• 9:04
  It says, Just as the rich ruled the poor, so the borrower is servant to the lender.
• 9:11
  And that's what you got to do today.
• 9:12
  You got to name that feeling.
• 9:14
  You're feeling like you're imprisoned.
• 9:17
  But that's not condemnation, it's just naming it.
• 9:20
  Once you name it, once you see it, then you can attack it and leave it.
• 9:26
  And remember, God wants you to be free from this as well.
• 9:30
  How about we pray together?
• 9:32
  Heavenly Father, I bring before you someone who has done the hard right thing.
• 9:37
  Lord.
• 9:38
  They've stopped spending.
• 9:39
  They've kept that promise, but they're still watching the number climb.
• 9:44
  And Lord, you see their discouragement, you see their tiredness.
• 9:48
  So Lord, I just ask that you would meet them right there in that, Lord.
• 9:52
  Show them a path out.
• 9:53
  Give them the strength to do it.
• 9:55
  Maybe you open a door on the rate.
• 9:57
  Maybe you give them an opportunity to see a better plan, Lord.
• 10:01
  Provide them what they need and give them the discipline to keep doing what they're doing.
• 10:05
  Lift the discouragement away from them, Lord, as you said, you free captives, Lord.
• 10:10
  Free this captive of those of us who are stuck in debt.
• 10:13
  And we ask this in Jesus name.
• 10:16
  Amen.
• 10:18
  Now, you came into this knowing the what, but now you know the why and you know the how out of it.
• 10:24
  So right now, beat that interest rate.
• 10:28
  The growth is the interest.
• 10:30
  It's not you.
• 10:30
  You're not doing anything wrong.
• 10:32
  So pay more than the minimum every time.
• 10:34
  Attack that rate.
• 10:35
  Throw every single thing at it for this short season.
• 10:38
  And don't forget to build that cushion so you don't refill that.
• 10:42
  And if you've got a question for this show.
• 10:44
  Maybe it's something just like this and you're like, ralph, I just need a little bit of a hand up.
• 10:48
  I would love to help you.
• 10:50
  Send me a voicemail by going to Financially confidentchristian.
• 10:55
  Listen, there is no judgment here.
• 10:57
  I want to come alongside you.
• 10:59
  I want to walk with you.
• 11:00
  I want to show you how you can break this once and for all from a place of support.
• 11:05
  Again, that's financiallyconfidentchristian.com/voicemail.
• 11:10
  Thank you so much for joining me today.
• 11:11
  Thank you for wonderful questions this week.
• 11:14
  Stay financially savvy.
• 11:15
  May God bless you.
• 11:17
  And you have a great day.
• 11:26
  Oh.
• 11:27
  We ride, We rise.