Credit Cards —
The Good,
The Bad,
and the Real Story
I paid off my large credit card debt in 2020. Now in 2026 my husband and I use cards strategically for points — but my birthday spending got away from us. Here is the full honest story and exactly what we are doing about it right now.
Let me be completely transparent with you today. 🤎
I talk about budgets, debt payoff, and financial freedom constantly on this blog and on YouTube. And everything I share is real — the wins, the progress, the $200,000 net worth, the student loans going down, the sinking funds growing. All of it is true and all of it is happening.
But financial freedom is not a destination where everything becomes perfect and the temptations disappear. It is a practice you keep showing up for — even after the big wins, even when life gets celebratory, even when the credit card makes it too easy to spend more than you planned.
This month my husband and I spent more on our credit cards than we should have. My birthday, celebrations, and the general energy of May meant our revolving credit cards absorbed more than our budget intended. And now we are doing what we always do — facing it, making a plan, and fixing it. 🤎
Today I am sharing the full story about credit cards — the genuine good, the very real bad, and the actual plan we are executing right now to bring our balances back down. Because if you are going to trust Paper By Moe with your financial journey you deserve the complete picture — not just the highlight reel.
How We Got Here — The Honest Story
Real talk — no filters, no spin. Just the truth about what happened and how.
From Paid Off in 2020 to Revolving Users in 2026
In 2020 I paid off a significant amount of credit card debt. That payoff was one of the most important financial milestones of my life — and it changed the way I thought about money completely. It is part of why Paper By Moe exists. That experience gave me something to share, a system that worked, and a genuine understanding of what financial stress feels like and what financial progress feels like too.
After paying off that debt my husband and I made a deliberate decision — we would keep credit cards in our lives but we would use them strategically and intentionally. We would use them for points, pay them off monthly, and never let a balance carry interest. That was the plan. And for a while it worked beautifully.
Then came May 2026. My birthday month — I turned another year wiser on May 21st. Celebrations. Dining out. Gifts. The energy of a good month where life felt abundant and the card was right there making everything easy. We put more on our cards than we planned. More than our budget allocated. And now we are sitting with a higher revolving balance than we are comfortable with — and high interest rates that do not care about our intentions.
So here we are. Facing it. Making the plan. Fixing it. That is what budgeters do. 🤎
The Good — Why We Still Use Credit Cards
Used correctly credit cards are one of the most powerful financial tools available. Here is exactly why we have not given them up.
I want to be clear about something — this blog is not a condemnation of credit cards. Credit cards are not the enemy. Unplanned credit card spending is the enemy. The card itself is a neutral tool. What matters entirely is whether you are using it or it is using you.
Here is why my husband and I choose to keep using credit cards strategically:
When we use our credit cards for bills and planned purchases we already have budgeted for and pay the balance in full every month — we are essentially getting paid to use the card. The points are real value. The cash back is real money. The fraud protection is real security.
That is the version of credit card use that builds wealth. That is the version we are aiming to maintain consistently. 🤎
The Bad — How Credit Cards Quietly Win
The credit card does not beat you dramatically. It beats you quietly, gradually, and with your full permission.
Here is the honest truth about why credit card overspending happens even to people who know better — and I mean people who have paid off credit card debt before, who budget every month, who track every dollar. Even those people. Even us.
Credit cards remove the pain of paying. Research consistently shows that people spend between 12% and 83% more when paying with a card versus cash because physically handing over money creates a real emotional response that swiping does not. The card creates distance between you and the reality of spending. And that distance is exactly what the credit card companies are counting on.
The other way credit cards quietly win is through celebration spending. Birthdays. Holidays. Anniversaries. Vacations. These are the moments where spending feels fully justified — and in many ways it is. You should celebrate your life. But the credit card makes celebrating too easy. One swipe here. One swipe there. The celebration was real. The balance at the end of the month is also very real.
The most dangerous credit card spending does not happen when you are reckless. It happens when you are happy — celebrating, treating yourself, enjoying life. The card is there, the mood is good, and the spending feels completely earned. And technically it is. The problem is the interest that comes after the celebration is over. The joy is temporary. The balance is not. 🤎
This is exactly what happened with us in May. Not reckless spending. Not financial irresponsibility. Just a celebratory month where the card absorbed more than the budget planned for — and the interest rate does not distinguish between reckless spending and birthday dinner. It charges the same either way.
"The credit card does not judge your reason for spending. It only calculates your balance and charges interest accordingly. Plan the celebration. Budget the fun. Do not let the card decide how much the party costs."
The Interest Math That Makes It Urgent
High interest rate debt is not patient. It charges you every single day whether you are thinking about it or not.
The average credit card interest rate in 2026 is between 20% and 28% APR. That means on a $3,000 balance at 24% APR you are paying approximately $60 in interest every single month just for carrying the balance. That is $60 that does not reduce your principal by a single cent. It is purely the cost of the debt existing.
That is money that goes directly to the credit card company — not toward your balance
This is why paying down high interest credit card debt takes priority over almost everything else in a budget — including contributions to non-essential sinking funds. The interest rate on a credit card is almost always higher than any return you would get from keeping money in a sinking fund. Paying off a 24% APR card is the equivalent of earning a guaranteed 24% return on that money. Nothing else in your financial life offers that return.
| Balance | APR | Monthly Interest | Annual Cost of Carrying |
|---|---|---|---|
| $1,000 | 24% | $20/month | $240/year |
| $2,000 | 24% | $40/month | $480/year |
| $3,000 | 24% | $60/month | $720/year |
| $5,000 | 24% | $100/month | $1,200/year |
Every month we carry this balance is a month we are paying interest that could be going toward our student loans, our home fund, our FIRE number, or our Outside Fund. The urgency is real. The plan is already in motion. 🤎
Our Exact Payoff Plan — Paycheck by Paycheck
This is not a vague intention. This is an actual plan with actual numbers and an actual timeline.
Here is exactly what we are doing to bring our credit card balances back down — and why we chose this specific approach over others.
We sat down and looked at every credit card balance clearly. The exact amount. The exact interest rate. The exact minimum payment. You cannot fix what you will not face and we are facing it completely. 🤎
Until these balances are back to zero we are not adding anything new to the cards. Bills that were already on autopay can stay — but no new discretionary spending goes on plastic right now. Cash and debit only for non-essentials.
We are using the Debt Avalanche method — attacking the card with the highest interest rate first. Every paycheck we are redirecting a specific dollar amount that was previously going to other budget categories toward this card. The budget shows exactly where the money is coming from and where it is going.
We made the decision to pull money directly from our non-essential sinking funds — travel, dining, and personal fun — to pay down the credit card balance immediately. Once the card is paid off we will allocate more to those sinking funds on each paycheck to build them back up. This approach gets the high interest balance gone faster and avoids paying unnecessary interest while the money just sits in a sinking fund earning far less than the card is charging us.
Our car repair fund and medical fund are not being touched — those exist to prevent real emergencies. However we are also temporarily reducing our home savings contribution. We normally put $1,000 every single paycheck into our home High Yield Savings Account in Marcus by Goldman Sachs. During this payoff period we are putting a little less toward the home fund per paycheck and directing that difference toward the credit card. Once the balance is cleared our full $1,000 home fund contribution goes right back to normal — and we will also ramp up our sinking fund allocations to rebuild what we pulled. Every reduction is temporary and every dollar has a plan to be restored.
Vague intentions do not pay off debt. We have a specific target — exact date, exact balance, exact plan. Every payday we check in. Every payment we log. The progress is visible and the accountability is built into the budget itself.
Here is what the paycheck reallocation looks like in practice — where the extra credit card payment money is coming from:
| Budget Category | What We Did | What Comes Next |
|---|---|---|
| Travel Sinking Fund | Pulled balance — used toward credit card payoff | Allocating more per paycheck to rebuild after card is paid |
| Dining / Fun Sinking Fund | Pulled balance — used toward credit card payoff | Allocating more per paycheck to rebuild after card is paid |
| Home HYSA (Marcus) | Reduced from $1,000/paycheck — temporarily contributing less | Returns to full $1,000/paycheck once card is cleared |
| Car Repair Fund | Untouched — essential protection | Stays fully funded — no change |
| Medical Fund | Untouched — essential protection | Stays fully funded — no change |
| Emergency Fund | Untouched — non-negotiable | Stays in HYSA — never used for planned debt |
This is a question I know someone is going to ask — why not just use the emergency fund to wipe the card balance and be done with it? Because a credit card balance from overspending is not an emergency. It is a consequence. Using your emergency fund to cover consequences leaves you without protection when a real emergency arrives. The emergency fund stays untouched. The credit card gets paid down through adjusted cash flow. That is the right sequence. 🤎
Our Credit Card Rules Going Forward
We are not giving up credit cards. We are building better guardrails so this does not happen again.
The goal coming out of this is not to eliminate credit cards — the points strategy genuinely works and the benefits are real when the system is working correctly. The goal is to build guardrails strong enough that a celebratory month cannot quietly undo months of financial progress.
What This Taught Us
Every financial stumble is either a setback or a lesson — and the only difference is what you do next.
Here is what I know for certain after going through this — financial progress is never linear and financial freedom is never finished. You do not reach a point where the temptations stop, where the celebrations stop costing money, or where the credit card stops being convenient. The work of being intentional with money is ongoing. Every month. Every paycheck. Every swipe.
What changes as you grow financially is not the temptations — it is your ability to recognize them faster, recover from them quicker, and build systems that make the recovery automatic rather than painful.
We recognized this overspend quickly. We have a plan already in motion. We are not going into additional debt to fix it. We are not raiding our emergency fund. We are not panicking. We pulled from our non-essential sinking funds to attack the balance immediately, we are temporarily contributing a little less to our home HYSA per paycheck, and we are allocating more back to those sinking funds once the card is cleared to rebuild them. Every move is intentional and every dollar has a plan. That is financial maturity. That is what six years of budgeting looks like in action. 🤎
"The budget is not there to make you perfect. It is there to make sure that when you are not perfect you have a plan to get back on track without losing everything you have built."
If you are in a similar situation right now — credit card balance higher than you planned, spending that got away from you this month, a celebration that cost more than the budget intended — I want you to hear this directly:
You are not bad with money. You are human. The difference between people who build financial freedom and people who do not is not that the first group never overspends. It is that the first group has a system to recover and the discipline to use it. 🤎
Build the system. Use it when you need it. Keep going.
Face Your Numbers. Make Your Plan. Keep Going.
If our credit card story resonated with you — whether you are currently carrying a balance, trying to use cards more strategically, or building the system that keeps your spending in check — the tools below are exactly what we use to stay on track.
You cannot pay off what you will not face. And you cannot face it without a plan. Start here. 🤎
Shop All Printables Watch on YouTubeThe interest rate examples and calculations in this post are simplified illustrations for educational purposes. Actual interest charges will vary based on your specific card terms, billing cycle, and payment timing. This post is for educational purposes only and does not constitute professional financial advice. Always review your specific card agreement for accurate terms.
I built Paper By Moe on real numbers and real honesty — including the months where things do not go perfectly. Financial freedom is built through consistent intentional decisions over time — not through perfection. If my real story helps you feel less alone in yours then every word was worth writing. Welcome to the community. 🤎