She Did, Too! $28,000+ In Credit Card Debt Pays Off Within 6 Months

Summary

In this finance tutorial, Christy van from Fantastic Finances shares a strategy to quickly eliminate credit card debt. The case study involves an author with fluctuating income who consolidates her debt using a personal line of credit, reducing her monthly payments and focusing on paying off the principal. By strategically managing her cash flow and minimizing interest payments, she successfully clears nearly $330,000 in debt within six months, highlighting the power of financial planning and debt management.

Takeaways

• 😀 The video is about a financial advice channel by Christy van, focusing on managing and reducing credit card debt.
• 📚 The scenario involves an author with fluctuating income, averaging at $9,000 a month, and significant credit card debt.
• 💳 The author has four credit cards with various balances and monthly payments, totaling $1,900 in debt payments.
• 💼 The author's monthly expenses, including rent, are $2,772, leaving her with approximately $4,300 in cash flow.
• 🏦 Christy suggests using a personal line of credit to consolidate the credit card debt, which would free up cash flow and reduce interest payments.
• 🔢 The author is advised to start by consolidating two Capital One cards and part of the Chase card, totaling $9,677.
• 💰 By transferring income into the line of credit, the author satisfies the monthly payment, reducing the balance and freeing up cash flow.
• 📈 The strategy involves gradually paying down the Chase card and then focusing on the Discover card, reducing the overall debt balance each month.
• 🚀 The author is projected to eliminate almost $30,000 in debt within six months by strategically managing her finances and using a line of credit.
• 💡 The video emphasizes the importance of eliminating high-interest credit card payments and using cash flow to reduce debt more efficiently.
• 🌟 Christy encourages viewers to learn financial strategies to save on interest and invest in their future, rather than paying banks.

Q & A

What is the main topic of the video?

The main topic of the video is about managing credit card debt and using a personal line of credit to consolidate and pay off debt more efficiently.

Who is the author of the video script?

The author of the video script is Christy Van, who hosts the channel 'Fantastic Finances'.

What is the average monthly income of the author mentioned in the script?

The author's average monthly income is stated to be $9,000, though it can vary between $7,000 and $177,000.

How many credit cards does the author mention in the script?

The author mentions four credit cards in total: one Chase, one Discover, and two Capital One cards.

What is the strategy used in the script to manage the credit card debts?

The strategy involves obtaining a personal line of credit, transferring the credit card balances to it, and then using the author's income to pay down the balance and reduce interest payments.

What is the total amount of credit card debt the author initially has?

The total initial credit card debt is the sum of the Chase card at $14,437, Discover at $7,710, and two Capital One cards at $5,459 and $3,118, which amounts to approximately $30,724.

What is the approximate monthly cash flow the author has after expenses and debt payments?

After expenses and debt payments, the author has approximately $4,300 in monthly cash flow.

How much interest would be charged monthly on the line of credit with an 11% interest rate, based on the highest balance?

Based on the highest balance of $9,677, the interest charged would be approximately $89 per month, but this is an estimate as the actual interest would be calculated on the average daily balance.

What is the final balance on the Chase account after the author's strategy is implemented?

After implementing the strategy, the final balance on the Chase account is reduced to zero.

How does the author suggest using the freed-up cash flow after eliminating the credit card debts?

The author suggests using the freed-up cash flow to revolve expenses and save for future purchases or investments.

What is the author's advice for those struggling with credit card debt payments?

The author advises to stop making high-interest credit card payments and instead use a personal line of credit to consolidate and reduce the debt more strategically.

Outlines

00:00

💳 Debt Consolidation Strategy for an Author

Christy van from Fantastic Finances introduces a financial scenario involving an author with fluctuating income and significant credit card debt. The author's average monthly income is estimated at $9,000, with expenses totaling $2,772, leaving a cash flow of approximately $4,300. The author's debts include four credit cards with varying balances and monthly payments. Christy suggests using the author's good credit score to secure a personal line of credit to consolidate and pay off the credit card debts more efficiently. The strategy involves transferring balances from the credit cards to the line of credit, which has a lower interest rate and no monthly payments, thereby freeing up cash flow and accelerating debt repayment. The plan is executed by first addressing the Capital One cards and then the Chase account, with the author's income being used to satisfy monthly payments and reduce the line of credit balance. By the end of the first month, the author's debt payments are significantly reduced, and the process continues with the aim of eliminating all credit card debt within a few months.

05:01

🚀 Eliminating Debt in Six Months Through Financial Restructuring

In the second paragraph, Christy van continues to detail the debt elimination strategy, focusing on the author's journey to becoming debt-free within six months. The author manages to consolidate her debts into a single line of credit with a lower interest rate, which allows her to allocate more funds towards debt repayment each month. By strategically using her income and expenses, she is able to pay off the Capital One and Chase credit cards, followed by the Discover account. The author's disciplined approach to managing her finances, including the elimination of unnecessary monthly payments, results in a significant reduction of her overall debt. Christy emphasizes the importance of using lines of credit wisely to avoid the trap of high-interest credit card payments. She encourages viewers to learn and apply these strategies to save on interest payments and gain control over their financial future. The video concludes with an invitation to join Christy's Facebook community for further support and resources, and a reminder of the benefits of using the Fetch app for earning points from receipts.

Keywords

💡Velocity Banking

Velocity Banking is a financial strategy that aims to maximize the use of one's income by reducing the time money is tied up in debt and increasing the cash flow available for other uses. In the video, it is the core concept Christy van with Fantastic Finances teaches, showing how to use a line of credit to manage and reduce credit card debt efficiently.

💡Credit Card Debt

Credit card debt refers to the money owed on credit cards that has not yet been paid off. In the video, the author has significant credit card debt across multiple cards, which she seeks to eliminate using the velocity banking method described by Christy.

💡Averaged Income

Averaged income is the mean income calculated over a period, which helps to smooth out fluctuations in earnings. In the script, the author's income is averaged at $9,000 per month to provide a consistent baseline for financial planning, ensuring that even during lower-earning months, the financial plan remains viable.

💡Line of Credit

A line of credit is a flexible loan that allows the borrower to draw funds up to a certain limit and pay interest only on the amount borrowed. In the video, the author is advised to get a personal line of credit to consolidate her credit card debts, which helps in managing her cash flow and reducing debt more effectively.

💡Cash Flow

Cash flow refers to the net amount of cash moving in and out of a business or individual's financial situation. In the context of the video, the author's cash flow is calculated after expenses and debt payments, which is crucial for understanding her financial health and ability to manage debt.

💡Debt Consolidation

Debt consolidation is the process of combining multiple debts into a single loan or line of credit to simplify payments and potentially reduce interest rates. The video script illustrates this by showing how the author consolidates her credit card debts into a line of credit to streamline her debt repayment.

💡Interest Rate

The interest rate is the percentage of the loan amount that a lender charges for borrowing money. In the script, the line of credit has an 11% interest rate, which influences the monthly interest charge and the overall cost of borrowing.

💡Monthly Payments

Monthly payments are the fixed amounts paid towards the debt each month. The video emphasizes the high cost of credit card monthly payments, where a significant portion goes towards interest rather than reducing the principal amount owed.

💡Income

Income in the video refers to the author's monthly earnings, which is the primary source of funds for managing her expenses, debt payments, and ultimately, for eliminating her credit card debts through the velocity banking strategy.

💡Expenses

Expenses are the costs incurred in the process of daily living or business operations. In the script, the author's expenses, including rent, are subtracted from her income to determine the available cash flow for debt repayment and other financial activities.

💡Revolve

To revolve in a financial context means to use a line of credit or credit card repeatedly, paying off the balance and then using it again. In the video, after the debts are paid off, the author is advised to use the freed-up cash flow to revolve her expenses, which can help in maintaining financial flexibility.

Highlights

Christy van from Fantastic Finances discusses a strategy for an author with credit card debt.

The author's average monthly income is estimated at $9,000, with potential fluctuations.

The author has four credit cards with varying balances and monthly payments.

Total monthly expenses, including rent, amount to $2,772.

With a good credit score, the author is eligible for a personal line of credit to consolidate debt.

A plan to transfer credit card balances to a line of credit is introduced to free up cash flow.

The first step is to consolidate two Capital One cards and part of the Chase card balance.

After transferring, the Chase card payment for the month is satisfied, freeing up $400.

The author's monthly cash flow is recalculated after debt consolidation.

Interest calculations for the line of credit are explained, considering the average daily balance.

Further payments are made to the Chase account, reducing the balance significantly.

By the third month, the Chase account is paid off, and additional funds are allocated to the Discover card.

The author's financial situation is reassessed, with no more monthly debt payments.

The final steps involve paying off the Discover card and managing the line of credit balance.

The author eliminates four credit cards and nearly $330,000 in debt within six months.

The importance of strategic financial management to save on interest payments is emphasized.

Christy encourages viewers to learn debt management strategies for long-term wealth building.

Invitation to join Christy's Facebook community for further support and giveaways.

Promotion of Fetch, an app that rewards users for snapping receipts, as a financial tool.

Christy shares her personal experience and confidence in overcoming financial challenges.

Transcripts

hello and welcome back to my channel I

am Christy van with fantastic finances

and on this channel I teach velocity

banking so today I'm going to go over a

scenario with an author who contacted me

and has some credit card debt that they

would really like to get rid of as

quickly as possible so due to she is an

author we kind of averaged her income

out at 9,000 a month now she can make as

low as 7,000 or as high as 177,000 but

we wanted to keep it on average so that

in the event she has a low month she may

be ahead on the previous month and it'll

all average out for her she currently

has four credit cards chase at

14437 with a $400 a month payment a

Discover at $ 77109 with a $200 payment

per month two Capital 1 cards one at $

5459 for $200 a month and then one at $

3118 for $1,100 a month now her expenses

do include her rent so the expenses are

listed up here at 27 72 and her debt

payments on these credit cards are

currently $1900 a month so adding her

expenses together taking it from the

$9,000 a month income means that she has

approximately $4,300 a month in cash

flow so her credit scores are really

good so she would be able to get at

least $10,000 in a personal line of

credit to use and transfer these cards

into it freeing up her cash flow Plus

getting her out of debt very quickly so

we're going to start with the Capital

One credit cards the $ 5459 and the 3118

totaling

8677 but we're going to add $11,000 of

this Chase account into here also

bringing her balance up to

9677 so of course that means her Chase

account is now

13437 and the credit card payment has

been made for this month due to she just

applied it as a $1,000 payment in month

one her income is going to go in and we

know that when you transfer your income

into your line of credit that satisfies

the monthly payment due that month so

she doesn't have a payment due on this

line of credit after the $9,000 is put

in her balance will be

$677 we're going to add in her expenses

now at $

2772 and her debt payments at $200 so

why did I just add $200 well we paid

$11,000 into the chase that eliminated

this $400 payment that month so we paid

off Capital One number one and cap one

number two which freed up these payments

is no longer due the only payment she

now has due is the Discover payment for

$200 adding in the expenses now brings

her up to

$3,649 we're going to add some interest

her interest rate is 11% so if you took

the high balance of the account at 9677

it would be about $89 a month but

remember on lines of credit the bank

takes the average daily balance so it's

not going to be $89 a month I'm just

doing that to leave room for air after

the interest is added in her balance

will be back up to

3738 so due to she has such good cash

flow we're going to add $6,000 more to

the Chase account meaning that her

balance now is

7437 on this account that brought her

line of credit balance back up to

$973 but in month two her income goes

again bringing that balance right back

down to

$738 so we're going to add back in her

expenses at $ 2972 now remember that's

the 2772 for her living expenses

including her rent and the $200 payment

that she owes on discover the Chase

payment was satisfied when we put the

income into the account so when you add

the interest in again off of the high

balance of 9738 that gives her

approximately a $90 interest rate charge

for this month bringing her balance to

$3,800 so with the $3800 still leaving

room for more of the Chase payment we're

going to add $6,000 more on onto the

Chase account which means that this 7437

is now

1437 bringing her balance back up to

9800 income for month three is going to

go in at $9,000 bringing her right back

down to

$800 her expenses at 2972 will come out

so will her interest at $91 off of the

high balance bringing her to a balance

of $

3863 what does that mean that means that

in month three she can pay off this

Chase account bringing it to a zero

balance and she can put $4,000 on to

discover so what did that do to the

Discover payment it satisfied it so that

$200 is no longer needed on the Discover

account so that brings her account back

up to

$9,300 and month four we're going to

take 9,000 in again bringing her balance

down to $300 adding in the expenses and

the interest again we at

$3160 now remember the expenses are down

to$ 2772 because that is her living

expenses including her rent so she no

longer has any monthly payments on debt

her balance would be 3160 we're going to

add 3109 to finish paying off this

Discover account right here so this

account is now gone too bringing her

balance up to

$626 and then what happens in month five

well month five her income that all she

can get in there is$

6269 that will pay this account

completely off and now she can use it to

revolve her expenses in and out of until

she decides there's something else that

she would like to buy So within 6 months

she has eliminated four credit cards and

almost $330,000 in debt in six months

just by rearranging her money a little

bit getting a line of credit that would

take over these credit cards giving her

a line to put everything into so that

she can just do her income in expenses

out working that balance down every

single month stopping the monthly

payments the credit card monthly pay

payments are ridiculous so if you are

stuck in making payments on credit cards

you are wasting your money so much of

your payment is going straight to

interest it could take you years maybe

decades to pay off a credit card they

set it up that way because they want you

paying the interest if you use your

credit cards correctly if you get lines

of credit and put your debt into those

lines where you have one line you're

eliminating all of the monthly payments

all of that is cash flow now going in to

work down the debt you're going to win

get strategic start putting your money

where it serves you and stop throwing it

away at these Banks and the interest

that you're paying such a waste you have

better priorities to be putting your

money towards and I hope that you will

learn the strategies so that you can

start saving the interest that you're

throwing away right now gaining wealth

for your future and helping your family

to get the things that they need thank

you so much for joining me today if you

have any question questions or comments

please leave them below I check out the

YouTube comments every day if you

haven't joined my Facebook private

Community please do so there's a link

below I sometimes have giveaways on

there giving away phone calls and stuff

and I'll be glad to have you join us if

you haven't joined fetch yet the link is

below remember fetch gives you points

for just snapping your receipts so that

has been a great asset to me just to

gain extra gift cards for just taking

pictures of my receipts strategize find

your way out of debt by just tweaking

your finances just a little bit where

there's a will there's a way and I know

that you can do it because I did it I

hope you guys have a terrific day and I

look forward to seeing you in the next

video